Meeting and Exceeding the Expectations of Today’s, and Tomorrow’s, Connected Consumer
Michael Forhez is Global Managing Director, Consumer Markets, at Oracle Industry Strategy Group and a co-chair of the CGT/RIS Executive Council.
The connected consumer, the impact of 5G technology and Covid-19, all global in scale and impact, are probably the three major “Known Knows” and “Known Unknowns” we face today.
The ‘Known Knowns’ — Today’s Consumer
As of July 2020, there were 4.57 billion global internet users — about 59% of the world population — with an 8.2% annual growth rate forecasted. The average amount of time per day spent using the internet by each internet user ranges upwards of 6 hours 42 minutes. We have approximately 5.15 billion people identified as unique mobile phone users across world.
However, the average number of connections per unique mobile user is 1.54B, with smartphones accounting for 74%. On average, 1 million-plus smartphones enter into service every day, an annualized growth rate of 8%. A July 2020 global study of Internet users, aged 16 to 64, indicated that in the past month:
81% searched online for a product or service
90% visited an online retail site or store
67% used a mobile phone or tablet
74% purchased a product online
52% purchased a product online via a mobile phone
The “Known Unknowns” — Tomorrow’s Consumer
General-Purpose Technology (GPT): think steam, electricity (telephony and TV), internal combustion engines, computers and the internet. These are the technologies and sub-sets that fundamentally impact how we live, expand our lives (physically and emotionally) build cities, improve agriculture, enable sophisticated supply chains and in general, sense and interact with the world around us.
GPTs are pervasive, improve over time and spawn innovation (invent and produce new products or processes) — yet, while foundational, they are fundamentally disruptive. It’s about to be a bumpy ride. Things will be different! Over the next 2-5 years, leadership and managers need to assess the likelihood that 5G Technology will become the next big GPT.
To be a GPT, 5G requires mega-data. As of July the average person reportedly created 2.5 quintillion bytes per day. Making use of this means making sense of it. Data, analytics and insights have fast become the fuel that drives the successful enterprise engine, with artificial intelligence its capability arch-stone. Consequently, we’ll need to integrate and understand first party, anonymous social party, and IoT data streams for strategic operation and planning.
Covid-19 essentially represents a once-in-a-century super accelerator that has uniquely disrupted both demand and supply models simultaneously. Consumers have already begun to make adjustments in their daily lives and long term planning by reducing short-term and mid-term spending, particularly in nonessential categories — with lasting and significant impact.
During the pandemic, e-commerce penetration as a percentage of U.S. sales went from approximately 15% in 2019 to over 25% by April 2020.
Consumers across demographic groups are shifting to online channels. The longer Covid-19 lasts, the higher the potential that online and omnichannel purchasing will become the next normal.
This shift in spending further clouds the future, and purpose, of continued investment in brick-and-mortar locations.
However, store closures and sharp declines in discretionary consumer spend, which has already had impact on all nonessential retail, might provide future opportunities for incremental sales — think home furnishings and DIY projects.
Some Covid-19 driven trends to watch:
Loyalty Shifts as customers experiment with and experience “switching”
Shift to online and digital
Local, Safe and Healthy becomes a consumer requisite
Shifting to value for money strategies as consumers reassess their needs and priorities
"Known Knowns" & "Known Unknowns" — the Requisites
We are now entering a leadership and management true moment-of-truth — a test, if you will, with everything on the table. Make no mistake: A momentous market shift over the next 24-60 months is afoot. There is now an enigma of uneven consumer sentiment and behavior to solve.
The future might depend on three organizational skillsets: improved product/services and demand forecasting; resilience and reimagining for all organizational skill requirements; and enhanced, agile market and marketing strategies and tactics.
To accomplish the above three things, we’ll need a reset. Think in terms of the 5 W’s: What business are we in? What business should we be in? When should we change? What should we change? What is our expected ROI?
Positing “Known Knowns” and “Known Unknowns” will have every organization thinking on how to honor the past, while operating in the present. It will unlock an ability to plan for the future — a different future that’s not so distant, but at our very doorsteps.
Michael Forhez is Global Managing Director, Consumer Markets, at Oracle Industry Strategy Group and a co-chair of the CGT/RIS Executive Council. For details on getting involved with the Council, contact VP/group publisher Albert Guffanti: [email protected].