Coca Cola Executive: Five consumer trends your business can’t ignore
“Over the next decade, success or failure for consumer goods companies and retailers will be measured by the speed and thoroughness with which we're able to adapt to change at all levels - global, national, local and personal.”
- By: Marie O'Connor
- Published: 20-05-2014
Those are the words of Muhtar Kent, Chairman and Chief Executive of Coca-Cola, taken from his article, “The five mega-trends shaping tomorrow's customers” published on the BBC’s news site. In his article, he references five consumer mega-trends identified in the Consumer Goods Forum's report on the "Future Value Chain”, which he holds to be invaluable for companies seeking to thrive over the coming years.
Today’s market, he explains, is not completely unlike that he experienced when he first joined Coca-Cola in the late 1970’s. Just as the US market recovered then through adaptation and innovation, he believes that many companies and nations struggling today can do the same. To succeed over the coming decade, Kent describes the following five mega-trends as being vital to the developments of any business or marketing strategy.
AN AGING POPULATION
Over the last two decades, the global birth rate has been in steady decline, while people are increasingly living longer. By 2047, the number of people over age 60 will exceed that of people under 15. Coupled with the fact that mature consumers tend to have more disposable income, this trend will present opportunities to certain industries and businesses that have the foresight to cater to this segment’s needs. Kent mentions home delivery as being one such service. Marketing efforts will also have to accommodate this shift in demographics, selecting their messaging and media appropriately.
The fact that over half of the world’s population now reside in cities and that more than 70% will do so by 2050, presents substantial supply chain and logistics hurdles for the retail and consumer goods industries. It will therefore be of benefit for businesses to evolve their infrastructures in close collaboration with the cities they service and with other businesses.
RISE OF THE MIDDLE CLASS
Along with the shift in age and population density, the world is also undergoing an economic shift. By 2022, another billion people will join the global middle class and by 2030 it is estimated that over 90% of the middle class will reside in emerging markets such as India and China. Today that number is at 50%.
This emergence of new wealth presents great possibility for retailers and manufacturers, although there will assuredly be inherent challenges as well. Among these will be the increasing stress put on limited resources . Some commodities will face rising cost pressures. Businesses will need to consider how they will be affected and how to navigate these changes while determining how to best sell their goods and brand themselves to these growing markets
THE CONSUMER IN CONTROL
Not only do an array of new consumer technologies mean that there are more ways to connect and interact with customers than ever before, it also means that consumers have come to expect more and expect it faster. Come 2020, it’s anticipated that over 30% of all consumer purchases will be made online, many of these from mobile phones.
How should companies best adapt? Kent suggests that focusing on advanced real-time insights will help better serve this constantly evolving, fragmented market. He continues:
“One key will be to pick the right ways to interact with online consumers, manage these conversations appropriately, and make the best use of digital consumer data. Moreover, successful companies will need to enhance transparency and become more collaborative in their interactions with shoppers.”
New technologies open up doors for companies to interact with their customers in novel and exciting ways while improving their shopping experience. Walking through these doors will become more and more crucial to a business’s long-term health.
EMPHASIS ON SUSTAINABILITY
Consumer awareness of environmental issues is greater than ever before and so is the importance of sustainable business practices to their purchasing decisions. Not only are eco-friendly company practices good for brand image, but as resources become more scarce and more costly, it is also just “smart business”.
To put things in perspective, by 2030, the world's population will reach 8.3 billion, which translates into a 50% greater demand for food and energy and 30% for fresh water. The more efficient companies can be at all stages of the process, the better for them and the planet. Kent provides examples of initiatives launched by Coca-Cola, which include plant-based bottles and close to 400 water partnership projects across 94 countries.
Regardless of what your company does or what role you play in it, these five consumer trends will dramatically shift the business landscape over the coming years. Versing yourself well in their potential implications and solutions will be of benefit to the decisions you make and the impact you have on your company’s health. In Kent’s words:
“With continuous innovation, companies that serve tomorrow's consumers will need to build more sustainable businesses; collaborate toward better optimised supply chains; and drive brand value and sales through greater engagement with increasingly sophisticated and tech-savvy consumers.”
Those who don’t keep up will be left behind.