How to Incorporate Megatrend Analysis into Your Business
Megatrends are an undeniable and unstoppable force. They are defined as a long-term shift in behaviour or attitude with global impact across multiple industries. At this very moment, they are shaping the consumer and B2B industries we operate in every day and – more importantly – will continue to do so well into the future. This long-term analysis view is extremely critical for any company that desires to shift innovation strategies from short-term, reactionary moves to disruptive solutions that better predict the needs of tomorrow’s consumer to upend competitors, categories and entire industries. Any business leader that hopes to remain successful for years to come should be incorporating megatrend analysis into their business strategy. But why are so many still not doing it?
For starters, beginning at square one is a difficult and time-consuming process. Even after megatrend analysis has been successfully completed, a key challenge remains: activating the insights. Many companies still struggle with turning megatrend analysis into tactical business decisions. Finally, incorporating megatrend analysis into strategy is not a one-time event. It is an ongoing process that must be maintained over time. Changing how we fundamentally operate is difficult, especially when shareholders want immediate returns. However, those same shareholders want to be reassured that their investment will continue to see big gains over time. In today’s lean environment, making the right innovation investments is more critical than ever.
So, how do we do it? There are five key steps to begin incorporating megatrend analysis into your business:
1. Build a megatrend framework to guide innovation
Evaluate the megatrends around you to identify which will have the strongest impact on your business. Shortlist where to focus based on both immediate and potential impact to your industry, category, product and brand.
Establish these megatrends as the pillars against which you will evaluate all innovation projects / ideas. If a project does not work to deliver against at least one of the megatrends shaping your future consumer, challenge the investment.
To learn which 8 megatrends Euromonitor International has highlighted will have the most impact to 2030, download our white paper ‘Megatrend Analysis: Putting the Consumer at the Heart of Business’.
2. Develop tangible understanding that incites action
Break down megatrends to develop tactical insights on who the trends attract and how they apply to your business. Map recent successful product / service launches back to the major megatrends they serve to find inspiration and spark ideas.
The key to disruptive success is to look beyond your immediate industry and category. Look to ancillary and related industries to identify patterns of new product development that may not yet exist today, but could come or apply to your world. For example, trends in food and beverage often impact trends in beauty and personal care.
3. Quantify impact and prioritize investment
Identify key categories, products or consumer cohorts that can serve as a proxy for quantification. Approximate size, growth and projected impact of trends on your industry or category at the megatrend or trend level to rank and prioritise a wide set of consumer needs and identify those that will drive true value gains.
Use quantification as a filter to narrow investment opportunities and predict returns on innovation investment.
4. Evaluate your portfolio and pipeline to ensure success
Map your current portfolio and innovation pipeline against the megatrend-driven needs of tomorrow for your consumers. Identify gaps vs. key drivers of value gains to prioritise current projects and identify whitespace innovation opportunities.
Develop a balanced innovation portfolio that focuses on filling immediate gaps with current brands / product lines while balancing long-term investment strategies for further out opportunities.
5. Repeat the process annually
Reevaluate the core megatrends in your framework. These should not change annually, but are worth a double check. Steps 2-4 should undergo a more robust process as megatrend interpretations evolve year to year and new product / service ideas may result.
Beyond process, build a culture and language around megatrends and the strategic long-term objectives they set for your business. Disseminate learnings beyond senior leadership, innovation and research and development so that all stakeholders understand and support the why behind initiatives.
Euromonitor International is an expert in megatrend analysis. We help companies apply megatrend analysis directly to their business through the Consulting Innovation Practice Area. Euromonitor International’s capabilities include: megatrend mapping and analysis, megatrend/trend sizing and forecasting, tipping point analysis, scenario planning and interactive workshops. We work across 100 markets and 30 industries to help customers draw inspiration from numerous creative perspectives. Our quantitative database of thousands of products and players can help guide your innovation process from strategic opportunity identification to size of prize analysis.
To learn more about best practices and strategies for applying megatrend analysis to your business watch our webinar ‘Megatrend Analysis and its Impact on Innovation’. To find out more about how we can help you with your long-term innovation strategy, please get in touch to request a free consultation.