Economies and Consumers in 2017: The Year in Review
As 2017 comes to an end we look back at some of our key insights over the year. 2017 saw the global economy strengthen and Brazil emerge from its deep recession. Consumers in emerging markets continued to drive spending growth, with the average emerging market consumer now spending US$2,569 over the year. China continued to avoid a hard landing and in fact is likely to end the year with stronger economic growth than India, and the eurozone is expected to end 2017 with its strongest rate of growth since 2007. On the downside, Brexit continued to weigh on business confidence in the UK and weak productivity growth in many markets remains a concern. Geopolitical instability also poses a risk to the outlook. Consumers move into 2018 continuing to question their values, priorities and purchasing decisions; deepening their engagement in the brands and issues that matter to them. Shifting consumer attitudes and behaviours will continue to cause disruption for business, with mobile technology and internet accessibility playing a key role in shaping these changes
Here are some of the year’s highlights:
- The year began with our seminal publication “Top 10 Consumer Trends for 2017”. This report highlighted the most important emerging trends impacting consumer goods markets across the world from the “Allure of Authenticity” to “Identity in Flux” to “Wellness as a Status Symbol”. The 2017 consumer is harder to characterise, seeking safety in a volatile world yet wanting to shop faster and to secure the swiftest convenience;
- In January, Donald Trump took office as the President of the United States. His unorthodox economic policies have given rise to concern and we introduced our Trump Adverse Policies and Trump Trade War Scenarios to our macro model to reflect this. Despite a strengthening economy in 2017, with the outlook characterised by strong private sector demand growth, constrained by low productivity growth, Trump’s unpredictability indicates that policy risks remain;
- Alternative business models gained traction in 2017 and our report, Engage, Repeat and Return: The Subscription Economy, explored one of these models. The rise of subscription services is an important development as it shifts the balance of power in consumer markets enabling manufacturers to reach out directly to consumers;
- The world is more connected than ever and in July we identified the Top 5 Digital Consumer Trends in 2017. With a broadening of connected devices from phones to wearables to smart appliances and new places to pay, Artificial Intelligence and Virtual Reality have the potential to create a new commerce reality for consumers;
- In September, we launched our megatrend series. In 2017 we are focusing on the eight megatrends our industry, economic and consumer trends experts have identified as being of the most importance to consumer goods businesses across sectors:
We introduced our methodology and our megatrends in a white paper “Megatrend Analysis: Putting the Consumer at the Heart of Business” and accompanying webinar “Megatrend Analysis and its Impact on Innovation” Our belief is that megatrend analysis allows companies to build a long-term strategy that is proactive, rather than reactive, making sense of where they stand today, but also ensuring they have a plan to remain relevant moving forward and for this reason we will continue to publish eight megatrend reports each quarter, which will continue to be available to all our Passport clients;
- In the same month we launched our Brexit Scenarios Tool and quarterly report series. Brexit continues to dominate the UK political and economic outlook. With negotiations progressing only slowly we are still assigning an 35-45% probability of a No-Deal Brexit, an outcome that would have serious implications for the UK economy;
- 2017 marks the third annual year of data collection for our Global Consumer Trends Survey and also, with Canada being added, its expansion to 21 countries. In the final quarter of the year, our Survey team have been looking beyond standard demographics and have created distinct, personality-driven consumer types at both the global and country levels. These consumer types incorporate many of the diverse attitudes and habits that separate one person from another, even distinguishing among those in the same demographic group. Our popular Consumer Types reports draw on this analysis.
- In October, we published our second annual Digital Consumer Index which, leveraging more than 2,500 data points from Passport, assists companies with identifying which geographic markets are the most digitally attractive and offer the best prospects for future deployment of digital initiatives. In 2017, Australia topped the rankings due to its mobile-first mindset.
We now prepare to enter 2018 with our expert analysts identifying the key trends for the year ahead across economic and consumer topics. Our macro-economic team discussed the economic outlook in the webinar “The Global Economy in 2018: Challenges and Opportunities Forecast” on 14th December 2017.