What Trends Will Influence Production And Consumption Over The Next Decade?
So there are a couple of trends I’ve noticed that I think will shape businesses that succeed and scale over the next decade because they will essentially be the drivers of production and consumption, the two pillars on which business rests.
If you divide consumers by age into ten year bands, starting from when they begin to consciously make their own buy decisions (sometime in their mid-teens) based on available spending data, you get an interesting view of spending power and attitudes. I’ve summarized this below
The two most important groups businesses must plan for if they will be successful over the next decade therefore are the current 15–24 group who will enter the highest spending part of their lives as well as the current 25–34 group who will enter the highest earning as well as second highest spending phase of their lives. I’m going to call this current 15–34 age-group the crucial generation for the purposes of this piece. So what have I observed about these groups and then the general trends as well?
On The Whole They Will Be Poorer
As far back as 2011 HERE, in 2015 HERE and as recently as 2016 HERE, multiple studies have shown that for the first time in a very long time, children will be poorer than their parents when their parents were at their age. This means most of the emerging 15–24 year olds will be poorer in relative terms when they get to the 25–34 group than those who are just leaving and the trend will be the same across the age groups. What this means is that they will have less purchasing power and hence businesses that serve them must be ready for a very price sensitive group. Finding technologies that will provide them superb service, while keeping business costs low, will be crucial to the success of any business.
They Will Prefer Services As Opposed To Products
Following from the above, because their purchasing power is lower, this crucial generation will want to predict their spending better (and there will be many tools that will make budgeting and financial planning easier) and they will not want to buy and stock like the current generations do. They will prefer to pay for commodities to be provided to them as a service when they need it, rather than buy and stock them. So for example, rather than buy groceries and store for the month which will tie their money down and also place the burden of managing and reordering the groceries on them, they will rather subscribe to a grocery supply service where someone else will worry about resupplying them and monitoring their grocery stock. They will be a use rather than own set of customers and businesses must be ready to transit to this model if they want to meet this crowd.
Their Service Standards Will Be Higher — And The Will Be More Vocal About It
In Nigeria for example, many of the older guys are quite tolerant of bank failures. They remember the days when they had to travel long distances, queue for hours and wait for days to get banking services that they now get instantly at any time from the comfort of their homes. Not so our crucial 15–34 group. They already tolerate failures less than the older folk and their tolerance levels will only get lower and lower. Businesses must take note of this and be ready to meet stringent service delivery standards, all to a price sensitive generation.
They Want Single Experiences And Multiple Options
Today, the high spending and high earning crowd wants multiple options but are willing to have multiple user experiences to access these options. But for this crucial generation that will determine the future, they will continue to want these multiple options but will demand a single user experience to access it. It will be left for the business to manage the platform such that the decision on options is not visible to the users of their services. Simply put, they don’t want to know where you are buying what you are supplying to them from. They don’t want to track their shipment. Just deliver it.
Ease and Intuitive Interaction Is Their Watchword
Technology is a novelty of some sorts in varying degrees to the current high earning and high spending generation. But for the crucial generation, they were either born or matured into an era when most of the tech is already ubiquitous. They won’t have the patience to download your extensive user manuals to learn how to use your services and platforms. Following from the point above, it will be the job of the business owners to design their platforms and interactions with their services to require as little new learning as possible and to be as intuitive as possible. So rather than clicking and selecting dropdowns, this generation will want to send one message the way they do to everyone else and expect your platform to figure it out.
On The Production Side
Here’s a final note on the trends, which doesn’t feed from the crucial generation’s behavior as consumers but rather as producers. The world is going through the process that computing went through earlier — the size of production units are becoming much smaller while the sophistication that they produce is getting much greater. To achieve greater complexity or larger production numbers, rather than build bigger production units (factories, industrial parks and co), the world is moving in the direction of the existing small but powerful production units interlinking and collaborating, a sort of pooling of distributed production resources. This trend enables them to produce faster, produce more customized for their markets and reduces cost of entry to production. I think this trend will accelerate in the years to come, increasing the general productivity of the critical generation while keeping their costs down.
So there you have it — the trends I’ve observed. As usual, agree, disagree or add in the comments. I look forward to your thoughts.