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A.T. Kearney 11/09/2017 1 David Donnan – Senior Partner, A.T. Kearney Amazon, Alibaba and Millennials January 2018
A.T. Kearney 11/09/2017 1
David Donnan – Senior Partner, A.T. Kearney
Amazon, Alibaba and Millennials
January 2018
A.T. Kearney 11/09/2017 2
ValueValues
A.T. Kearney 11/09/2017 3Source: A.T. Kearney
Gen X
0.1B 0.9B 1.4B 1.9B 2.3B 1.5B
2017–?
1998–20161981–1997
1965–1980
1946–1964
SilentGen
BabyBoomers
Millennials
Gen Z
AlphaGen
A survey of 7,000 consumers in 7 countries . . .
1928–1945
A.T. Kearney 11/09/2017 4
The mass market as we know it thrived for years on three key assumptions
Source: A.T. Kearney
A.T. Kearney 11/09/2017 5
The “mass market” of the future will thrive on three fundamentally different principles
Source: A.T. Kearney
A.T. Kearney 11/09/2017 6
Trust
A brand is simply trust.
Steve Jobs
A.T. Kearney 11/09/2017 7
Consumers now believe their purchasing decisions have a greater impact than their vote
Which has the Greatest Impact on Society? Which has the Greatest Impact on Society?
1. Q8. In your opinion, which of the following has the greatest impact on society? Base: All Consumers. 2013 (n=1,841). 2015(n=1779) Core (N=243); IML (n=552); OML (n=490); Periphery (n=262). Millennials (n=480); Gen X (n=401) Boomers (n=898)
32% 26% 18%
28%26% 52%
40% 48%30%
Millennial Gen X Boomers
18% 22% 27% 25%
45% 42% 39% 36%
37% 36% 34% 39%
2008 2010 2013 2015
Purchase Decisions
Voting Decisions
Community Involvement
A.T. Kearney 11/09/2017 8
Authority and nutritional advice does not come from traditional sources
Shoppers who Plan, Shop and Explore Food Culture through Social Media, by Generation
Forms of Social media regularly used to share food experience, by Generation
7359
3820
53
MatureBoomerGen-XMillenialsTotal
15
21
29
43
3
9
18
36
1
8
14
26
347
12
Pinterest YouTubeFacebook Instagram
MatureBaby BoomerGen-XMillennial
Source: FM US Grocery Shopper – Trends 2016
A.T. Kearney 11/09/2017 9
Food companies and grocery retailers leverage “free-from” brands to build trust
Source: A.T. Kearney; the Gluten-Free Agency; Tesco; Trader Joe’s; Whole Foods
A.T. Kearney 11/09/2017 10
Younger generations actively look for brands that do good …% of respondents actively looking for brands/retailers that do good for the world
29
35
44
46
Gen Z Baby BoomersMillennials Gen X
Source: A.T. Kearney Global Future Consumer Study (Q26)
A.T. Kearney 11/09/2017 11
Top players are losing market share to smaller companies and startups
Food & Beverage1 Market ($B)
494.7439.6
34%
2012
63%66%
2016
37%
2015
56.0
24%51.8
2012
76% 72%
28%
Personal Care/ Beauty2 Market ($B)
Other Share Top 25 Share
1. US Markets: Food and Beverage 2. Personal Care and Beauty
3% 3%
Rest of Market Growth Rate: 6% Top 25 Growth Rate: 2%
Rest of Market Growth Rate: 8% Top 25 Growth Rate: 1%
A.T. Kearney 11/09/2017 12
Community-based retailing is growing
Farmer’smarkets
Independentbookstores
MicrobreweriesLocal restaurantsand bars
A.T. Kearney 11/09/2017 13
Influence“If you make customers unhappy in the physical world, they might each tell six friends.
If you make customers unhappy on the Internet, they can each tell 6,000.”
Jeff Bezos
A.T. Kearney 11/09/2017 14
The event that shocked the industry
A.T. Kearney 11/09/2017 15Source: A.T. Kearney Global Future Consumer Study (Q18)
162124
353642
63
China GermanyUSAIndia UK FranceJapan
% of respondents buying groceries online
Constant connectivity is lowering the barriers to online grocery
Non-APACAPAC
A.T. Kearney 11/09/2017 16
While Amazon shocked the world, Alibaba is changing it.
$2.4B
Cyber Monday
$6.6B
Black Friday
$5.0B
$25B
Predictive fulfillment analytics Machine learning Mobile order, payments Personalization Robotics and consumer
technology Frictionless scale
Single day sales transactions 2017
A.T. Kearney 11/09/2017 17
The food industry is shifting toward new influencer relationships
Source: A.T. Kearney; Laurainthekitchen.com
The paradox of communication in the Digital Age:
Laura Vitale
3.8 M visitor/month1.1M Instagram followers
A.T. Kearney 11/09/2017 18
The dynamics of consumer data access and media amplification
Sources: Food Babe; Anheuser Busch website
A.T. Kearney 11/09/2017 19
“To me, the future is
personalization”Marissa Mayer
Personalization
A.T. Kearney 11/09/2017 20
What you do Who you are
Personalization will require companies to act on the notion of “consumers as data feed”
Where you live
Emails/Texts
Travel
Shopping History
Browsing History
Social Media Presence
Demographics
Relationships
Diet/Fitness
Finances
Social Influence
Sleep Patterns
Productivity
Goals
Source: A.T. Kearney
A.T. Kearney 11/09/2017 21
Consumers are willing to provide data for “value-add” personalization% of respondents willing to share data if they get something in return
333435364041
45
GermanyFranceJapanIndiaUKUSAChina
Source: A.T. Kearney Global Future Consumer Study (Q18) Non-APACAPAC
A.T. Kearney 11/09/2017 22
More consumers than ever are tracking caloric intake and diet through apps
Source: A.T. Kearney; Livestrong; Myfitnesspal; Fatsecret; Lose it!
>30M users
>165M users
>45M users
A.T. Kearney 11/09/2017 23
■ Explores by grazing and snacking
■ Actively seeks information
■ Trust their friends more than ads
■ Want healthy, . . .
■ But also indulgent
■ Unsure of Big Ag/ Big Food
The new food consumer
23
A.T. Kearney 11/09/2017 24
ProductWith Purpose
A.T. Kearney 11/09/2017 25
StoresWith Stories
A.T. Kearney 11/09/2017 26
David Donnan – Senior Partner, A.T. Kearney
Amazon, Alibaba and Millennials
January 2018
A.T. Kearney 11/09/2017 27
A.T. Kearney is a leading global management consulting firm with offices in 40 countries.
Since 1926, we have been trusted advisors to the world's foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com.
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