The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Businesses are inundated with information on consumer trends but being able to decipher it all, extract what is most important and conceptualise the future to make confident investment decisions can be a minefield. To help, Euromonitor can leverage extensive knowledge of consumer spend across categories and geographies, alongside our deep understanding of socio-demographic indicators, to develop a model which allows us to apply a quantifiable lens and understand how megatrends will unfold over time.
Megatrends are complex concepts which aim to simplify the nuances of how consumers think, behave and prioritise their spending. They evolve over time, impacting categories and geographies differently, hence are a good predictor for where to place innovation efforts. Yet a common pitfall is that companies make strategic decisions based on past experiences, looking at these trends against historic industry performance.
So how can we effectively identify what and where the real future opportunities are? To answer this effectively, we set out to evaluate the propensity of consumers to spend towards products and services that appeal to a certain trend or behaviour. Rather than being led by conceptual discussions alone, there is a need to quantify the trend to discover where consumers will be spending. Considering the dialogue alone could derail businesses from where the future focus really should be.
The model provides an insightful read of the products and services consumers are spending on across geographies. Shopping Reinvented, defined as the shift in consumer purchasing behaviour to anytime, anywhere models, is by far a leading determinant of where consumers are willing to put their money. And whilst Wellness and Sustainable Living are at the forefront of investment priorities for brands, the consumer spendings across these remain limited in comparison to other areas.
Globally, the shift to consumers buying products and services through new channels and in new ways (Shopping Reinvented) is expected to continue to show the strongest growth potential. With much of this leaning towards digital solutions, we see similar strong growth in consumer spending within the Digital Living space, which is how consumers live, interact and shop through digital solutions.
And one of the most powerful outputs is the ability to evaluate the trends per market. For example, if we look at China, the growing middle class presents a huge opportunity for business as it continues to expand and enjoy rising incomes. And this is all fostered by Digital Living and an inclination to seek alternative shopping methods. Sustainable Living, Wellness and Experience remain more nascent in this market.
And if a product portfolio is particularly aligned with a specific trend, we can use the data to evaluate which markets present the strongest opportunities. For example, Denmark leads in terms of consumer spending within the Sustainable Living megatrend and is expected to see ongoing strong growth, but it is Australia and France that show the most interesting opportunities.
Euromonitor’s megatrends framework enables companies to identify focus areas that influence business and innovation in the long term. These certainly provide a strong direction but there are still many questions to be answered:
• Which megatrends should I focus on and why?
• How do these differ in impact and priority across geographies?
• Which trends are more nascent, and which are maturing?
These are challenging questions to answer without a quantified approach to evaluate the megatrends and identify spending patterns and growth expectations. Leveraging our extensive in-house data and expertise, we took the following steps to achieve this across our eight focus megatrends:
• Carefully selected data proxies from Euromonitor’s breadth of global industry data to evaluate the propensity for consumers to spend across each of the megatrends.
• By aggregating these proxies, we develop a quantitative assessment which allows us to compare the trends across key markets.
• Then, to see future progression, we identified a set of key drivers (social, economic, environment, technology) for each of the megatrends to understand how each one performed historically and is expected to grow in the future.
• All selections and assumptions behind the proxies and drivers were thoroughly validated in consultations with our in-house Industry Heads and Trend Leads.
The final output of this analysis is an unprecedented quantified view of which trends will determine consumer spend across geographies in the future.
This model can inform investment and innovation efforts across markets by allowing the evaluation, rating and ranking of megatrends to answer critical business questions. We are often asked; can megatrends be quantified? And though no perfect science exists to achieve this, Euromonitor has effectively leveraged the breadth of its data across countries, categories and socioeconomic indicators to develop an effective tool that can shape your future portfolio.
Learn more in our webinar: Quantifying Megatrends: Expanding your Portfolio in the Right Spaces