Getting and keeping customers
Demographic and technological changes are causing massive economic shifts, both between and within countries – and thus equally momentous swings in consumption.
The world is getting wealthier: the number of middle-class consumers is projected to rise dramatically over the next 15 years, especially in Asia. That’s creating all sorts of new opportunities, particularly for companies in the sectors on which richer consumers typically spend their money.
But the customer base is fragmenting. The gap between the rich and poor is widening; urbanisation is exacerbating the rural-urban divide; and the structure of the household is evolving as the nuclear family gives way to a much wider variety of family types.
The competition is simultaneously increasing as emerging-market companies fight for the same consumers that mature-market companies are targeting. Technology has also lowered the barriers to entry in many industries, and some of the most disruptive new players could come from completely unexpected quarters.
What does this mean for your business?
The most successful businesses are tackling these challenges in several ways. They’re pursuing new market opportunities in new territories. They’re also creating customised products and services for clearly defined demographic segments – and some of them recognise that chasing wealth isn’t the only route to growth.
Collectively, the billions of people at the base of the pyramid possess immense buying power, so focusing on underserved populations can be as profitable as it’s socially desirable. But serving these new consumers entails adopting fundamentally different manufacturing, marketing and selling techniques.
Some companies are also tapping into the shared economy. Technology has provided the tools with which to measure – and monetise – spare capacity accurately and easily. And in a connected world, customers don’t have to own a product or service to enjoy it.