Why Households Specific Insights Matter for Business Strategy
Households are changing rapidly in terms of size, location and demographics. By 2030, the global household outlook will be much different than today and starkly different compared to 10 years ago, as technology, urbanisation and economics reshape the behavioral patterns of inhabitants and create new channels of access to consumers.
The way consumers interact with their home ecosystem is changing, driven by new product designs, evolving family types and demographic trends. Segments ranging from appliances to healthcare and e-commerce are impacted by such shifts. Understanding these diverse and complex changes in households is vital for brands and governments, helping minimise potential challenges and maximise new opportunities.
Companies, institutions and governments use household data to identify the decision-making processes and consumption tastes of different household groups within a country or region. Household data also enables businesses to assess digital readiness for formulating market technology and Internet strategies. Companies can compare countries in terms of their dwelling types, homeownership rates, mortgage demand and property price growth as well. All of these form a vital part of tactical analysis for businesses in segments such as fast moving consumer goods (FMCG), marketing, construction, private equity, finance, durables, education and many more. This article highlights some of the key trends within household data and common ways businesses use this information in their strategy.
Shifting household types in lucrative BRIC economies
Brazil, Russia, India and China (the BRIC) are experiencing changes in household patterns, driven by altering culture and lifestyles in these countries. The largest household group, couple-with-children households is declining, while the proportion of single-person, couple-without-children and single-parent households is on the rise. This impacts consumer spending patterns, boosting discretionary spending and drives the demand for housing options in the BRIC. Businesses can apply these patterns to develop demographic-specific marketing campaigns and product design strategies and plan long-term market movements offering early-mover advantages in new segments.
Source: Euromonitor International from national statistics
The smart home is becoming a reality
Data on technology preferences and accessibility within households enables businesses to tailor products and services to best suit consumers. Take the smart home; it has been on the verge of a breakthrough for years, yet the lack of a winning standard, confusion over product choice and limited consumer tech-savviness derailed its mainstream appeal. Nonetheless, 2017 is set to be an important year for this market, as manufacturers are finally catching on to what consumers want in their home and how much they are willing to pay for it. Rising Internet usage, smartphone penetration and domestic appliance sales globally will also increase smart home technology, while the general rise in IT literacy in emerging markets will enhance accessibility. Several major digital brands entering the market will strengthen visibility and awareness of smart-home offerings.
Rising middle classes and smaller, sustainable homes
Learning more about the size and shift of households is helpful in determining consumer spending. The largest and fastest-growing markets for household goods and services tend to have a large middle class with rising incomes. Other drivers of consumer spending on household goods and services include smaller household sizes in hyper-urban areas and capital cities, the rise of single-person households in developed markets and the greater availability of consumer credit in emerging economies. Consumer credit availability enables many lower-middle-income households to access funds to finance the purchase of white goods. Sustainability has also become an important theme for households, with energy-efficient and cost-conscious tech helping to drive greener homes.
Source: Euromonitor International Global Consumer Trends Survey 2016
The household is the central hub of consumption in today’s globalised and hyperconnected economy. Household stability, size and segmentation have a direct impact on consumption of goods and demand of services. In population-growing economies like Cameroon and China, household dynamics can be completely in contrast to more developed nations with stagnant birth rates. Factors like these can dictate its healthcare, infrastructure development and academic policies. For more information about how household specific research and insights help your business strategy, download our free briefing.