1. Energizing Global GrowthUnderstanding the Changing Consumer

2. ContentsForeword03Preface04Executive summary 05About the research 08The age of complexity 09Great expectations 13Understanding the changing consumer 19New consumer realities 27Lessons from industry growth leaders 31Conclusion35References371

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4. ForewordAs the global economy continues impact of their purchases more oftenon its slow path to recovery, there than they did three years ago. Suchis a prevailing sense of hopeand consumer trends have the ability toexpectationthat businesses can grow affect not only business-to-consumerprofitably in the coming years. From companies, but also business-to-my experience with clients across the business ventures and the publicworld, I have learned that businesses sector. Every organization must watchand investors are tentative yet confident for signals of consumer change thatthat a corner has been turned. can influence business growth and the recovering global economy.Yet while growth is high on the agenda,it is especially hard to achieve in Businesses must stay one step aheada tough economic environment. In of the consumer to succeed in such aEurope, particularly, the outlook is world. Many companies will admit theychallenging. It is still possible to find are currently one step behind.pockets of growth, howeverthe Balticcountries, for example, are all expected While there is no foolproof strategyto grow at or above 2 percent in 2013. that will help restore growth in Mark SpelmanBut for the most part, businesses economies where it has been hard Managing Directorwill not be able to ride the wave of to come by, a couple of imperatives Accentureoverall market growth. Instead, they are clear. Businesses should discernwill have to redouble their efforts to emerging consumer trends, and thengrow in mature or slowing markets. invest selectively to stimulate growth in consumer spending. Governments haveIn regions or industries where the overall a role to play, too. They should activelysize of the market is staticor may create the infrastructure and the policyeven be shrinkingthe ability to capture environment needed to foster businessmarket share becomes paramount. The activity in this new era.companies best able to do this are thosethat excel in their understanding of This is a time of great potentialconsumers, a differentiator that applies for businesses and the customersequally well in growing markets. they servea time when better understanding of the consumer couldThis truth is relevant as we embark energize global growth.on what appears to be a new era ofconsumptionone that is evermoreinfluenced by rapid advances intechnology, huge quantities ofinformation about individuals and theirpreferences, and increasing concernabout the impact of consumption. Whathas amazed me is the pace of change Mark Spelmanshown by consumers, particularlyin emerging economies. Nine in 10emerging-market consumers havewatched television on a phone, tabletor computer, and nearly two-thirdsare considering the environmental3

5. PrefaceConsumers are changing the world. Or more frequently co-operative: they seekrather, changes in consumer behavior community, and they expect companiesare changing the world. Those changes to operate on behalf of communities.are driving massive growth across They are also conscientious, and theyindustries. And they hold the promiseif expect businesses to actively protectbusinesses recognize and capitalize on the environment and to promotethe opportunitiesof lifting the entire social causes.global economy in the process. Why does this matter so critically toWhat kind of changes in behavior all business leaders today? Becauseare we talking about? Lets consider it points to the truth that companiesa few examples: it is the professor cannot be content to focus on thein Stockholm checking her e-mail where and the who of selling.before bed only to find an invitation They are unable just to say emergingto attend a conference in London, and markets and people over the ageimmediately going online to buy airline of 55. Instead, they must give newtickets from a travel site. It is the young attention to the how and the why oftech worker who gets his first job in consumption. The networked consumer Paul F. NunesSilicon Valley, sells his beat-up old car, is the new how, and the independent Managing Director of Researchand signs up for a car-sharing service and co-operative consumer is the why. Accenture Institute for High Performancefor those times when he needs personalwheels. And it is the mother in So If stock markets are correct, thenPaulo, who always looks for the label companies must grow rapidly to meetindicating that sustainable forestry analyst expectations. Just the non-methods were used to produce the financial companies in the S&P Globalpaper products she needs for her family. 1200 have to find an additional US$5 trillion in revenue each year. To meetThese examples all point to new types these expectations, business leadersof behavior that we identified through must recognize key elements ofextensive research over the past year. changing consumer behavior and thenWe found that the vast majority of undertake the necessary organizationalconsumers today are networked. They shifts to capture the growth that thoseare almost always onnever far changes are generating.from an Internet connection that willput them in contact with companies; Business leaders are confident in theirsometimes to buy, sometimes to offer ability to lead their companies toadvice, sometimes to praise or to profitable growth in the next few years.criticize. They are also quick to use the Policy makers and government leaderstools of social media to connect with should also be encouraged. We hopeeveryonefamily, friends, colleagues and this report helps them energize globaleven companies from which they buy. growth through their understanding of the changing consumer.Furthermore, consumers are increasinglyindependent. They may want productsthat have been customized to meettheir specific desires. They often preferrenting to buying, or second-handluxury to first-hand average. And yetindependent in no way means selfishon the contrary. Consumers today are Paul F. Nunes 4

6. Executive summaryThe global economy hangs Investors today are, once again, Instead, companies must look elsewhere,in the balance. Economists expecting robust business growth. at consumers themselves and how We see this in our analysis of the changes in behavior are creatingcontinue to predict relatively S&P Global 1200, where enterprise important opportunities. In the past,low growth in the developed valuations indicate high expectations. companies could grow simply byworld over the next five years. In fact, companies in that index will focusing on the where and who ofMeanwhile, the largest emerging need to find an additional US$5 trillion consumptionplaces such as emergingmarkets have not been able to in revenue growth each year simply to markets and growing customer meet the analyst expectations behind segments such as the elderly. Today,maintain the astounding growth their current share prices.i two additional elements are critical:rates of the previous decade. the how of consumption, and the But while US$5 trillion may be a big why. Both areas have undergone rapidYet shareholders appear to number, business leaders show a change in recent yearsso rapid thatsee things differently. High surprising de