Megatrends represent long-term, fundamental shifts in consumer behaviour. They define what is happening in consumer markets and have significant global impact on companies across industries. And megatrend analysis helps you stay ahead of changing priorities.
To analyse megatrends effectively, you need the full picture. That starts with clearly understanding the underlying forces (or drivers) that form the backdrop to consumer behaviour.
These are the five socioeconomic drivers shaping consumer megatrends.
Shifting economic power
The global economy has witnessed a paradigm shift. Rapid economic growth in developing markets is creating new opportunities for investors who are keen to diversify and target a growing young, mid-income, tech-savvy consumer base.
67% GDP per capita growth of developing markets by 2040
There are still challenges to overcome, such as widespread inequality and political instability. But advanced digital literacy and infrastructure in emerging countries can help your business leverage new audiences and realise commercial opportunities.
As the global population surpasses 8 billion in 2023, demographic fluctuations reshape lifestyle choices and purchasing decisions. The ageing population is one of the most important shifts in recent years. Senior consumers are an influential and attractive cohort for most businesses, rising in numbers, affluence and digital ability.
32% growth of urban households by 2040
Urbanisation is another key change and is set to pick up pace from pandemic lows through 2040. Plus, migration, which will help bring different skills, ideas and backgrounds together to drive multiculturalism and improve diversity.
Environmental shifts and pressures
Carbon emissions, waste and the use of natural resources are under scrutiny. Governments, businesses and consumers all have a role to play to preserve the planet for future generations.
Consequently, consumers want to make more responsible choices, driving demand for green products and forcing companies to invest in these solutions.
64% of consumers are worried about climate change, up from 55% in 2015
However, amid economic uncertainty, your business should focus on developing cost-effective sustainable products or creating enough benefits to justify the higher price tag.
Technology continues to advance at a rapid rate. Digital is interwoven with our lives, which ultimately reshapes our behaviours and expectations of products and services as well as the companies behind them.
87% of households will have access to the internet by 2040
The internet has been one of the most transformative technologies of the modern era and underpins other technological advancements, such as artificial intelligence, AR/VR and IoT. Digital investment is no longer optional for any business, but a necessity to stay relevant and competitive.
Our views and beliefs are constantly evolving with the world around us. New advancements, disruption or policies tend to shape our attitudes, motivations and priorities.
55% of consumers felt like they could make a difference in the world, up from 45% in 2015
As it stands today, the cost of living, political turmoil and economic uncertainty triggered cautious consumerism. Shoppers support companies that correspond with their values and boycott brands that don’t share their beliefs. The importance of trust, authenticity and uniqueness grows as every consumer’s voice matters.
- Emerging and developing markets could provide greater business opportunities as the financial status of these consumers improves.
- Understanding and reaching different demographics and consumer groups are necessary for your business growth plans.
- Environmental pressures affect buying behaviours, which means you need to adapt your communication, product portfolios and pricing strategies.
- As internet access and reliance on technology expands, digital investments become more critical for your innovation strategy and operational effectiveness.
- Conscious spending is supplemented by cautious consumerism, so you’ll want to adjust your offer to reflect both tangible and emotional value.
Now that you’re familiar with the drivers, time to get into the megatrends. Read up on 10 megatrends that are impacting the business landscape for the next two decades in our new report.
Editor’s note: This article was originally published in August 2022 and has been updated.