Switch on growth and the future of consumption
By J. Walker Smith, chief knowledge officer, Brand & Marketing at Kantar Consulting
Live large – Carry little means a future in which, increasingly, ownership is disconnected from consumption. Consumers no longer take it for granted that ownership is part and parcel of consumption. Consumers want to continue to live large with big ambitions and aspirations, but they want to carry little while doing so.
This shift in mindset is not just a phenomenon of developed economies. Obviously, developing markets and the emerging middle-class are still in an accumulation phase of development. But consumers in these markets are going through this phase in a global context that is entirely different from the past. Expectations have changed in emerging and developed markets alike. In the Kantar Consulting Global MONITOR, nine in ten consumers worldwide put a higher priority on experiences than on material possessions. Things like convenience, control, time-efficiency, stress free, healthy and purpose-driven all figure into the new value equation.
Capacity
The marketplace is in the midst of an historic pivot. The hallmark of the past was a shared presumption of no limits. Limitless accumulation was both the end-point and the engine. No limits meant there was no need for economising or holding back. It was assumed that ingenuity and technology would unfailingly create greater abundance. This assumption was proven right time and again as economies of scale and demand propelled discovery and invention. But now, capacity is closing in. Economic, resource and cognitive limits are rechanneling the marketplace from a past of unlimited consumption to a future of mindful consumption.
Brand strategies that put product over purpose are more and more handicapped by capacity constraints. Returns on this kind of R&D have been in steady decline for decades. A team of Stanford researchers looked at all categories in the U.S. economy since 1930 and found that on average, research productivity has declined 10% per year. It takes more investment than ever to generate one good idea. Merely to stay even, R&D investment must now double every 13 years.
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