The world faces rapid and unpredictable change, an age of unparalleled global migration and demographic shifts. This constant cycle of change will affect the way businesses are run: they must prepare for more varied customers and channels than ever before.
Every multi-national business needs to be ready to change with the global market to ensure long-term survival. In as little as five years, we expect to see massive shifts in key customer bases, as geography, income level, social classes and migration all reshape the ‘customer of tomorrow’. What will these new customers look like, and how will we have to interact with them?
A frontier market is typically a low/middle income country with a relatively under-developed capital market, comprising 26 markets spanning Asia, Eastern Europe, Africa, Latin America and the Middle East. Multinational businesses are paying more attention to these low-income, high-risk countries as new markets for selling goods and services, interacting with new global customer bases.
However, many consumers in these countries rely on mobile phones rather than laptops or computers to conduct business. While some communities might not have access to banking branch infrastructure, they may well have access to mobile money. As a result, it’s imperative that businesses adopt a robust mobile strategy to meet consumer demands, taking time to understand what mobile services and apps are needed as part of their overall strategy for customer experience.
Standard Chartered Bank has already introduced a secure and convenient mobile money solution in Kenya and Tanzania. In 2016, through use of its mobile wallet services (Straight2Bank Wallet) via Vodafone's M-Pesa, 23.8 million active users traded $60 billion (USD) in East African markets. Like Standard Chartered, you’ll need to connect your global workforce and customer base to facilitate effective business.
Of the 25 countries forecast (including emerging giant markets) to grow the fastest over the next five years, 19 are frontier economies. And that’s where you’ll likely find tomorrow’s consumer.
The composition of the consumer
What will tomorrow’s consumer look like? If current studies are anything to go by, they’ll be very different from today.
The projected shift in the middle class is especially interesting. Today, 3 billion people are in the global middle class, but 2 billion of them are from developing countries like Indonesia, the Philippines, and Thailand. As such, many businesses have adapted their services and products to target global consumers, who collectively hold more disposable income now than ever before.
So, what will the average consumer age be?
The ratio of children to older citizens stands at about 3:1, but it’s declining. By around 2050, there will be around twice as many older citizens than there are children. This process is moving fastest in the Asia Pacific region, with a projected 71 per cent increase in the number of people aged 65 years and above by 2030. The process is mirrored in most developed countries, thanks to advances in medical technology and access to healthcare. Smart businesses have realised this presents an opportunity rather than a challenge, as the grey pound is now worth over £320bn a year Hollywood is one such industry to adapt to changing demographics, as a projected one in three films produced each year are designed to appeal to the older moviegoer.
Another of the most significant demographic trends today is the rapid rise in global migration. Largely seeking employment, 90 per cent of the world’s 247 million migrants have moved across borders voluntarily. From 2000 to 2014, immigrants contributed 40 to 80 per cent of labour-force growth in major destination countries, constituting a new major customer base.
Ultimately, your business will depend on these considerations of change. Businesses and their customers are intrinsically linked – as one shifts, so must the other. Indeed, the consumer of tomorrow is relevant to developed, emerging and frontier markets alike. You’ll need to adapt to a truly global workforce and customer base by investing in the communications tools you'll need to reach them.