The changing consumer: An ever-more elusive target

Consumers are evolving, both geographically and demographically. Companies today must chase a faster-moving target — one that is both more diverse and more demanding than ever — and fight off increased competition. CEOs are well aware of this. More than half (52%) said they are concerned about shifts in consumer spending and behaviour, while 46% are worried about new market entrants.

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When it comes to consumer markets, one size most definitely does not fit all. Even among economic subsectors (e.g., “BRICs,” emerging markets, developed markets) there are significant differences in growth speed, competition and market dynamics. Each market presents its own challenges and opportunities which must be navigated.

The risks you face

  • Today’s increasingly interconnected economic landscape heightens supply chain complexity, and your risk exposure. 
  • Approaching consumers in emerging markets in a non-differentiated way increases your risk of market entry failure.
  • Competitive new entrants and low barriers to entry increase the risk of loss of market share.
  • Consumers demand and share much more information about corporate activities than before: reputational risk is high for businesses that don’t align with consumer values.
  • Beyond the actual performance of your product or service, reputational risk can ensnare you from a wide range of sources — including your supply chain partners, your operational and financial practices, your tax strategies, or a lack of support for the local community.
  • A failure to keep pace with evolving consumer expectations can jeopardise a necessary transformation.

Resilience practices

  • Enhance your use of big data and big modelling to better understand the changing needs of consumer segments.
  • Shift your business model from being product/service-centric to client-centric. Engage with consumers across multiple channels to increase customer loyalty and nurture trust.
  • Make supply chains flexible enough to deliver to different segments in different ways and different geographies.
  • Remove unnecessary complexity from your value chain.
  • Tailor market entry and consumer targeting strategies for emerging markets. Know the political, economical, social, technological, legal, fraud, corruption and cultural risks for each market before going in. Otherwise, focus on growth in known markets.
  • Earn and protect your licence to operate in far-reaching markets by investing in the local communities there.
  • Embed assurance into your contracts. Exercise control and work to build trust between stakeholders.

Ask yourself…

  • Are we aware of — and responding to — issues raised about our company in social networks?
  • Can we monitor the impact of our activities on various stakeholders to help guide our consumer strategies?
  • Do our consumers trust us? If so, are we leveraging that trust to create competitive advantage? If not, why not?
  • Are we willing to be more transparent in communicating our business activities and results with all stakeholders?
  • Once established in a faraway market, are we staying focussed on local economic and consumer trends?
  • Is our supply chain geared towards helping us fulfil our most important value propositions?
  • Has our supply chain become so complex that we’re losing oversight of our risks with supply chain partners?
  • Do we have enough redundancies built in to our supply chain to match shifting consumer demand?
  • Do we deeply understand the diverse perspectives and priorities of our customers? Do we know what they think of us, across different cultures and societies?

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Risk resilient or risk resistant to the trends that will transform?

Fit for the future. But are you truly resilient?

Are you winning — and keeping — your many consumers’ trust?
When it comes to consumer markets, one size most definitely does not fit all. Every market presents its own challenges and opportunities, which must be navigated carefully. What’s more, consumers today demand and share much more information about corporate activities than before — and reputational risk is higher than ever.

Read more