The Future of the Consumer Industry

The rapid pace of change in the consumer industry is unavoidable. A backdrop of unprecedented complexities, including climate change, shifting demographics, inequality, and geopolitical and economic instability are all reshaping the consumer landscape.

For consumer businesses, the economic realities of the last few years have made conducting ‘business as usual’ challenging, but at the same time, businesses now face increasing pressure to think further ahead – adapting for the future, with strategies that brought past success unlikely to guarantee future prosperity.

By understanding and responding to key forces, consumer industry leaders can position themselves for success. This requires a nuanced understanding of evolving consumer preferences, technological advancements, sustainability concerns, and shifting economic policies.

Determine your own future

Agility and adaptability will be crucial in shaping the future of your business. Businesses must analyse these forces, identifying both emerging/existential risks and disruptive growth opportunities. This will require a reassessment of traditional markets, business models, and operational mechanics. Ultimately, success hinges on making informed decisions and charting a course through this complex landscape.

Six forces of change

Through a series of conversations held over two years with more than a thousand consumer industry executives, analysts, academics, and commentators, along with input captured and monitored monthly in Deloitte's ConsumerSignals, Deloitte has identified six forces that will play a fundamental role in shaping the future of the consumer industry.

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The changing consumer

The near future will bring about changing consumer preferences as consumer demographics become vastly more diverse.

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An evolving society and culture

Breaking free from traditional social and cultural anchors, consumers are redefining what their priorities are and how they choose to spend their time and money.

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Exponential Tech

Business digitalisation and advancements in material and bioscience will likely lead to the development and deployment of new technologies and the emergence of new markets so rapid that the progress of the previous decade will likely pale in comparison.

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Radical consumer industry upheaval

Consumer buying patterns will shift, and new categories of goods and services will increasingly vie for wallet share. Businesses that struggle with speed and agility may face unprecedented challenges.

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Extreme climate change

The role of consumerism will be pivotal in combatting climate change. Companies that adopt a sustainable consumption model will be better positioned for achieving expected results.

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Shifting economics, policy, and power

Facing economic and policy uncertainty, companies will likely need to reorient their management approach.

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Convergence

These trends don’t exist in a vacuum; the collective movement and acceleration of these forces will create a new competitive landscape where opportunities will emerge and innovation will drive the industry forward. To understand the implications of these forces on the consumer industry, we can look at emerging signals and trends across markets, business models, and operational mechanics as a guide to what the future might look like and what capabilities you will require to thrive as a business.

Markets

What is sold, who it’s sold to, which goods and services are valued, and how the industry creates value.

Demand driven markets: The market has shifted from supply-driven to demand-driven, meaning businesses must cater to previously underserved markets
Digital and physical hybrid: The growth of digital goods and services outsize and displace spending on traditional physical categories
Responsibility as a requisite: Ecological damage continues to accelerate, and the impact on the economy and the individual becomes more visible. In the near future, consumer industry trust, privacy, equity, and advocacy will also become essential to the changing value proposition

Models

How businesses organise and configure, how materials and capabilities are sourced, and what new models create value.

Industries converge: Continued acceleration and collision of infotech and biotech create a massive market opportunity
Seismic supply shift: Geopolitical, economic, and market forces are converging to require a significant reshaping of supply chains
Radical industry reconfiguration: The growth of capability-as-a-service in the market is driving significant reconfiguration of the industry

Mechanics

How businesses execute work, employ labour, build ecosystems, and make strategic and operational decisions.

The age of algorithms and automation: Data and automation, are driving highly efficient businesses that can sense and respond to granular shifts in consumer demand
Workforce extremes: The scarcity of technology-driven skills and redundancy of workers replaced by automation are creating a difficult transition for the workforce
New centres of financial gravity: Traditional sources of growth and margin continue to collapse under the weight of increasing options and commoditisation

The Future of the Consumer Industry