Change as they say is the only constant. Nowhere is the velocity of change more evident than in the consumer industry. Over the last 20  years, the consumer industry has seen dramatic transformation.

Yet today, the industry stands on the precipice of an even more momentous paradigm shift and faces a once-in-a-century economic, social, and technological transition.

The findings from this article are stemmed from an 18-month report from the Deloitte Office for the future. The report analysed consumers from across the globe.

The target group for the report were cross-industry, cross-functional, highly diverse and multigenerational. The goal was to be broad, inclusive and through, with the assumption that the more perspectives and inputs, the better foundation for a fuller understanding of the forces shaping the future.

Below are six forces that will play a fundamental role in shaping the consumer industry over the next decade:

1. The changing consumer
2. An evolving society and culture
3. Exponential xTech
4. Radical industry upheaval
5. Extreme climate change
6. Shifting economics, policy, and power

These six forces will drive and determine those who will thrive versus those who may struggle. Consumer industry executives need to recognize how these six forces will fundamentally change their customers, industry, economy, society, and environment and how to boldly lead their companies through this profound paradigm shift.

Charting a successful course will take vision and courage: the vision to see what others do not, and the courage to journey forth when others turn back.

Force 1: The changing consumer

Globally, the consumer base is undergoing unprecedented change, moving from homogeny to an inclusive, multifaceted, and diverse populace. The spending priorities and patterns of older consumers are vastly different from those of the traditional consumer, presenting risk but also opportunity.

Consumers of the next decade can be seen rapidly emerging, and they will be vastly different from the consumers of the past. They represent the rise of much more granular segments, subsegments, and micro segments and will demand consumer organizations become much more targeted in offerings aimed at satisfying their unique needs, wants, desires, and priorities.

Consequently, most organisations, built as they were for mass production, mass distribution, and mass marketing, will need to evolve operations to address this fundamental shift.

Force 2: An evolving society and culture

Humans, by definition, are social creatures with behaviors that are driven, influenced, and reinforced by shifts in the surrounding culture and society.

People are seeking novel approaches to community building. The idea of “community” is no longer constrained by geography. Today, people are breaking free of geographic boundaries and using technology to find like-minded people, building communities, acceptance, and social bonds. At the same time, many new methods of forming communities are amplifying extremism.

Consumer companies need to recognize that consumers are breaking free from traditional anchors. New anchors are emerging that are definitive of who people are, what their priorities are, and how consumers choose to spend their time and money. Navigating to position against these new pillars of society will be incumbent on the winners of tomorrow.

Force 3: Exponential xTech

During the past decade, digital technologies drove momentous change across our society and economy. In the consumer industry, the development and deployment of a new set of technologies will be so compressed that it will make the progress of the previous decade pale in comparison.

Several technologies will change how products and services are designed and delivered. Sensors and connected devices and machines will detect, record, and respond to changes in the environment, sharing data and providing updates to connected digital twins. The use of Artificial Intelligence and Machine Learning will drive both automated and predictive and prescriptive insights, which will be securely recorded and protected by zero trust models and blockchain architecture.

Force 4: Radical industry upheaval

The consumer industry has undergone enormous transformation over the past decade, driven by two primary forces: Globalization and Technology.

Globalisation has had a deflationary effect on many consumer goods categories, while simultaneously opening new markets. Similarly, technology has proved disruptive in driving efficiency and access, reducing the cost of consumer goods, digitizing physical processes and capabilities, creating new economies of scale, creating new business models, and tearing down barriers to market entry driving both consolidation and fragmentation.

Thanks to technology, the consumer industry— once protected by high barriers of capital investments needed for property, plant, and equipment, is now easier to enter for even the smallest of competitors.

In pursuit of growth, traditional organizations have been forced to invest in new brands, channels, formats, and service models to compete with expanded choice in the market.

The next decade will see the dynamics shaping the industry increase in pace, and organizations struggling with the need for speed and agility will face challenges of an order never seen before.

Force 5: Extreme climate change

The growing visibility of climate change and its economic impact, together with increasing climate-driven regulations, will put pressure on the consumer industry to act. Given its size and reach, the industry and each individual company have a meaningful role to play in this economic transition to a safe, stable, and healthy environment and sustainable existence. While many executives often skeptically ask, “Are consumers willing to pay for sustainability?” that’s the wrong question. Consumers are already paying. The cost of externalities is currently being borne by all of us.

Companies that act as first-movers to make new markets, and who develop and build a circular economy-based future—moving from a linear and wasteful production to a new and transformative sustainable consumption model—will be better positioned for the future.

Force 6: Shifting economics, policy and power

For the consumer industry, there are broader, external forces that affect the economics, structure, and direction of the industry.

Today’s consumers find themselves in an inflationary environment with tightened monetary policy. Corporations operating on the global stage are faced with complexity regulations, political uncertainty and the threat of political retribution based on perceived, or real, economic alignment.

Management during times of uncertainty requires a much more flexible, scenario-based, probabilistic approach to management and investment decisions. All the while, expectations of corporations are rapidly expanding from a focus on shareholders to a broader focus on all stakeholders. Companies need to re-orient their management approach to a changing economic and political environment.

Conclusion

In a world filled with exponential change, unprecedented disruption, and increasing uncertainty, it is imperative for us to collectively activate our agency and shape a better future. We all play a role—as consumers, executives, and citizens. Simply put, consumers, companies, governments, communities, and society must buy into better. Buying into better will require us to make aspirational choices at the intersection of prosperity and purpose and think differently about value.

It is important that executives:

1. Recognize the six forces that are shaping our future

• Understand the implications of the forces across three key dimensions:
• Markets — what is being sold, who it is being sold to, and what products or services create value
• Models — how businesses organize and configure, how materials and capabilities are sourced, and the emergence of new business models for value creation
• Mechanics —how businesses execute along the value chain, employ labor, partner and build ecosystems, and make strategic and operational decisions

• Continually monitor, assess, and scenario plan against the changing landscape

The future of the consumer industry requires that we all chart this path of buying into better.