A major challenge in today’s fast-paced environment is keeping up with change.
We asked business professionals how their company plans to grow over the next five years in our Voice of the Industry: Lifestyles and Innovation Survey 2023. Two of the top responses: improve existing portfolios to increase share and develop completely new solutions to disrupt.
To achieve such goals, you need to fully understand what’s changing and why. That requires insight into the drivers behind evolving consumer behaviour and megatrends that are shaping long-term demand. Then, you’ll be able to refine innovation strategies and better anticipate customer needs, leading to incremental and disruptive opportunities. Let’s take a closer look at each.
What’s a Driver?
Put simply, a driver is an underlying force spurring change. There are five drivers, all socioeconomic, which work in tandem to generate and shape consumer megatrends.
- Changing Values
- Environmental Shifts and Pressures
- Population Change
- Shifting Economic Power
- Technological Advances
What’s a Megatrend?
A megatrend is a long-term shift in consumer behaviour. It isn’t a short-term fad. A megatrend has wide impact across a range of B2C industries. These are 10 megatrends that you should pay attention to over the next several years.
- Digital Living
- Diversity and Inclusion
- Experience More
- Pursuit of Value
- Shopper Reinvented
- Sustainable Living
What’s the Renovation, Innovation, Disruption framework?
Our framework outlines how businesses can execute change to varying degrees. Companies that disrupt recognise the long-term socioeconomic forces (drivers) while also understanding and harnessing megatrends. This enables strong consumer engagement, market reconceptualisation, fearless leadership and effective decision making.
A clear outline for innovation
Understanding drivers and analysing megatrends are the first steps. You’ll be better positioned to identify what’s going on and why. Then, you can combine those insights with this framework to set your growth plans.
There isn’t a one-size-fits-all approach to innovation. You might see a renovative opportunity like reformulations or rebranding. Or there could be a clear opportunity to create an entirely new product category. Regardless, in both instances, you’ll need to validate consumer needs (megatrends), know the forces shaping them (drivers) and how you can respond (framework).
Here are a few resources that you’ll find useful around drivers, megatrends and disruption:
- Megatrend Drivers: The Forces Underpinning Changes in Consumer Behaviour
- Transform Your Innovation Strategy with Megatrends
- Examining the Renovation, Innovation, Disruption Framework
Editor’s note: This article was published in November 2019 and has been updated.