February 08, 2017 | Report
When consumer-facing companies look around the world for growth opportunities, they tend to think about consumption growth driven by an income-based middle class. In particular, the standard approach to maximizing potential sales has been to focus on products and services designed to meet the needs and tastes of the middle class. However, our research suggests that this approach is misguided. By looking at the drivers of global consumption growth in a new way, we have identified likely purchasers across income groups and across economies. We call these consumers Connected Spenders. They are connected because they have internet access and use the internet to research purchases and to shop. But Connected Spenders are not merely online shoppers. They are digitally savvy consumers who have enough income for discretionary purchases, are avid shoppers who punch above their income class in discretionary spending, prefer premium products, and are on the cutting edge of consuming trends. Globally, the Connected Spender population rivals that of the global middle class, but the Connected Spender cohort is growing faster than the middle class and spending more: by 2025, these consumers will account for half of global consumption. For marketers coping with a sluggish global economic environment and middle-class malaise, tapping into the Connected Spenders can help generate healthy growth. Among the report’s key findings:
Companies that seek growth from meeting consumers’ needs appreciate that there are vast variations in consumption patterns from one country to another. Likewise, consumers in any given country differ in their means, preferences and behaviors. Given the logical result that some consumers will drive spending growth more than others, marketers are particularly interested in knowing the consumers who will contribute most to their growth objectives. Identifying, understanding and meeting their needs should be fundamental to the company’s growth strategy.
For years, consumer-facing businesses have favored a simple approach to identifying the growth drivers in their markets: they prioritize on the basis of consumers’ income levels. Luxury-goods manufacturers concentrate on high-income consumers. Manufacturers of mass-market goods appeal to middle-income earners. The latte
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December 10, 2024 | Article