Mark Spelman, Managing Director at Accenture, on how a better grasp of what makes customers tick will help to spur economic growth.
As the global economy recovers slowly, there is a sense of hope from businesses that a corner has been turned. But optimistic shareholder expectations appear to be out of kilter with the weak projections for global economic growth. If stock markets are correct, then companies must grow rapidly to meet analyst expectations in the next few years. To reach that growth target, the non-financial companies in the S&P Global 1200, alone, must find an additional US$ 5 trillion in revenue each year, according to Accenture’s analysis. In regions or industries where the overall size of the market is static – or may even be shrinking – the ability to capture market share will become paramount.
Until now it has not been certain where businesses can expect to find that growth. We know that many companies can no longer simply ride the wave of overall or even slowing emerging market expansion. But new evidence points to the extraordinary transformation in consumer behaviour as a critical, but overlooked, source of growth. Capitalizing on new consumer behaviour offers great prospect for re-energizing the global economy and generating profitable business growth today.
How is the consumer changing? In a global survey we have just published, we identify 10 significant changes. For example, consumers have become increasingly connected. A big majority – 73% – say they have increasingly been using the Internet to research and buy products and services in the past three years. Additionally, their use of social media is disrupting patterns of loyalty, creating new forms of commercial communities and recreating the purchasing process. Just over half of consumers globally tell us they increasingly consider the environmental impact of the product or manufacturer before purchasing. That percentage rises to just under two-thirds when we look at those surveyed in emerging markets.
All this suggests that companies can no longer focus on the “where” and the “who” of selling. They are unable to simply target “emerging markets” or certain demographic groups. Instead, they must pay new attention to the “how” and the “why” of consumption. The always-on, networked consumer is the new “how”, and the independent, cooperative and socially conscientious consumer is the “why”.
In response, it is imperative that companies invest in capabilities that help them better understand and act on these changes. That includes embracing advanced analytic tools that interpret rapidly changing data and assist in identifying select opportunities. Businesses should also consider adopting more agile business models and partnerships to improve their strategic and operational responsiveness. These steps can help them, for example, to deliver more tailored services and to shift from traditional products to the more experiential offerings that consumers expect today.
An Accenture study of 20 business sectors shows that embracing the changes in consumer behaviour can increase the growth of these sectors by US$ 2.4 trillion by 2016. Experience suggests that businesses will have to move with speed and agility to meet the demands of the new consumer, particularly at a time when markets remain volatile and shareholders have high expectations for revenue growth.
Mark Spelman is Managing Director at Accenture.
Image: A recruiting coordinator working at Twitter’s headquarters in San Francisco. REUTERS/Noah Berger
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