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This artwork was created using Nielsen data.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
TODAY’S CHANGE IS
TOMORROW’S OPPORTUNITY
REGAN LEGGETT & NICOLE CORBETT
8 February 2018
WHAT’S NEXT STARTS NOW
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OUR SPEAKERS
NICOLE CORBETT
Director
Thought Leadership, Nielsen Growth Markets
REGAN JAMES LEGGETT
Executive Director
Thought Leadership and Foresight, Nielsen
3
This artwork was created using Nielsen data.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
“The problem is that the pace of change
is so rapid, businesses can’t react like
they have in the past; they need new
models for innovation and growth.
Without these, they aren’t likely to stick
around long term ...”
singularityhub.com
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47% MORE REVENUE than other firms from 2001 - 2014
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THE CHALLENGE OF CHANGE 1
UNDERSTAND CHANGE 2
GROW FROM CHANGE 3
6
This artwork was created using Nielsen data.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
THE CHALLENGE
OF CHANGE
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THE WORLD IS CHANGING
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THE WORLD IS CHANGING
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THINK ABOUT THE FUTURE NOW
2018 2020
BASED ON WHAT’S HAPPENING TODAY,
BUT ...
WE MAKE DECISIONS
TODAY LEAD TIMES TO EXECUTE
ENVIRONMENT IS
DIFFERENT
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PLAN AHEAD
Next 6 months Next 2 years 5 years plus Last 24 months Last 12 months Present
META-ANALYSIS MEASUREMENT STRATEGY FORECASTS MACROECONOMIC FUTURE
LONG TERM
MID TERM
SHORT TERM
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WHAT’S NEXT?
12
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Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
UNDERSTAND
CHANGE
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CHANGE AFFECTS BUSINESS
N.B: These drivers of change are not exhaustive and used as examples; often these drivers of change are linked and symbiotic.
CONSUMER
VALUES
AND ATTITUDES
ENVIRONMENTAL
CHANGES
POPULATION TECH
ADOPTION
HOUSEHOLD SIZE
AND STRUCTURE
URBANIZATION
AND
CITY SIZE
ECONOMIC/INDUSTRY
DEVELOPMENT
AND GDP
INDUSTRY/BUSINESS
INVESTMENT
AND INNOVATION DISRUPTIVE CHANGES
CAN HAPPEN AT ANY TIME
TO DRAMATICALLY
AFFECT DYNAMICS AND
DRIVERS
INFRASTRUCTURE
AND ACCESS
POLICY AND LEGISLATION
DEMOGRAPHIC
CHANGES
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CHANGE DRIVERS CHANGE SIGNALS
WHAT WILL SHAPE THE CONSUMER,
RETAIL AND BUSINESS ENVIRONMENT.
CLUES AS TO HOW AND WHEN CHANGE
MAY HAPPEN.
POPULATION
INFRASTRUCTURE
& ACCESS
URBANIZATION
& CITY SIZE
HOUSEHOLD SIZE
& STRUCTURE
DEMOGRAPHIC
CHANGES
HEALTH & WELLNESS
SOCIAL RESPONSIBILITY
EQUALITY
CHANGING CONSUMER
PATTERNS
TOURISM –TECH
HIGH DENSITY
LIFESTYLES
AGING & YOUTHFUL
HEALTHCARE
EDUCATION
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CHANGE DRIVERS CHANGE SIGNALS
WHAT WILL SHAPE THE CONSUMER,
RETAIL AND BUSINESS ENVIRONMENT.
CLUES AS TO HOW AND WHEN CHANGE
MAY HAPPEN.
HOUSEHOLD SIZE
& STRUCTURE
SMALLER PACK SIZES
MORE CONVENIENCE
LESS “FAMILY” SPENDING
MORE LEISURE &
ENTERTAINMENTS
LESS TIME IN-HOME
ON THE GO
CHANGING
RELATIONSHIPS
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UNDERSTAND SIGNALS OF CHANGE
PERIPHERAL SOURCE
Weak signal
ALTERNATIVE
SOURCE
MAINSTREAM SOURCE
Strong signal
TIME
IMPACT
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TRACK SIGNALS OF CHANGE
Sugar tax
Event RETAIL CHANGES
White paper on
sugar & obesity
Early signal
Medical board
support
Emerging signal
Consumer health survey
Alternative source signal
Health reforms
Strong signal
1995 2000 2005 2010 2015 2020 2025
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LIVE POLL
DO YOU FEEL YOUR COMPANY HAS A FORMAL OR INFORMAL
PROCESS IN PLACE TO IDENTIFY CHANGE HAPPENING OUTSIDE OF
YOUR MARKET OR INDUSTRY??
• Yes
• No
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LIVE POLL
What tools or processes are you/your senior management leveraging to
prepare your organization for the future?
• Follow trend setters/future forums on social media
• Reading industry magazines
• Attending industry events on “the future of...”
• Risk strategy in place
• Leveraging third party companies to scenario test
• Have specific tools and process already in place
• None, more focused on the here and now
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WHAT’S NEXT ASIA PACIFIC
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POPULATION TO GROW RAPIDLY
Source: United Nations (Taiwan not broken out)
Larger workforce
and more
consumers
Drives economic
growth &
workforce
productivity
2015 2025
+7.2%
3,717.24
million
3986.57
million
FORECAST TO GROW (Ranked % change)
Lao, Philippines, Cambodia
HK, Malaysia, South Korea
Australia, Bangladesh, Nepal
India, Indonesia, NZ, Vietnam
Myanmar, Macao, Singapore
China, Thailand
FORECAST TO DECLINE
Japan
CASE STUDY > DRIVER > POPULATION
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URBANISATION
Source: United Nations – Urban breakdown percentages applied to total population
Cities of 10m+
growing by 33%.
BUT
67% of population will
still live in cities <300k
& rural in 2025
Based on: Australia, Bangladesh,
Cambodia, China, Macao, HK,
India, Indonesia, Japan
Lao, Malaysia,
Myanmar, Nepal,
NZ, Philippines, Singapore,
S. Korea, Thailand, Vietnam Excludes Taiwan
ASIA PACIFIC 20
15
165.6M 262.7M 342.8M 166.3M 102.9M 713.3M
3,717
M 4% 7% 9% 4% 3% 19%
208.3M 349.2M 440.4M 206.4M 125.0M 794M
Cities of
10 million
or more
Cities of
5 to 10
million
1 to 5
million
500,000 to
1 million
300,000 to
500,000
Fewer than
300,000
3,986
M 20
25
+86.5M +42.7M +97.6M +40.1M +22.2M +80.7M
11% 5% 3% 20% 9% 5%
53%
47%
1,963M
1,863M
-100.6M
Rural
CASE STUDY > DRIVER > URBANISATION
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HIGH DENSITY +
• Changing consumption patterns
• Increasing access to infrastructure
- • Congestion, centralized consumption
- Potential health, safety and
pollution issues
• Smaller pack sizes
• More demand for convenience, delivery,
on-the-go solutions
• E-commerce and delivery options used to
bridge gaps in consumer needs from
existing retail environment
LOW DENSITY + • Growing consumption demand
- • More limited infrastructure
• Large “stock up” pack sizes
• Maturing category evolution
• Focus on “golden stores”
• Technology leapfrogging traditional retail
evolution.
URBAN SEGMENTATION = DIFFERENT NEEDS
SOCIETAL IMPLICATIONS POTENTIAL INDUSTRY RESPONSES
CASE STUDY > DRIVER > URBANISATION
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CASE STUDY > SIGNAL > CHANGING DEMOGRAPHICS
URBANISATION CREATES NEED FOR CONVENIENCE
“While the online food delivery market
has seen rapid expansion with room
for growth as it accounts for a small
portion of the total catering industry.
The popularity of mobile payment has
boosted online food delivery, with over
60% of Chinese paying for food via
smartphone.”
Jiang Junxian Director of the China Cuisine Association
“Growth for food delivery came from
smaller cities - faster expansion in
orders compared with major cities.”
Yang Wenjie Meituan Waimai,
208.5 MILLION PEOPLE Ordered food online in China in 2016, up 85%
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Cindy Shin Consumer Insight Leader
Nielsen Growth Markets
Consumers in bigger cities are increasingly time poor and face greater
complexity, be it challenges from congestion, work hours, health concerns or
even growing choice.
As technology capability grows to understand our behaviours, needs and
preferences; it will guide our decisions and consumption.
People in smaller or rural areas have very different lifestyles and that will
continue moving forward.
Understanding the evolving but differing lifestyles of consumers will help
brands and retailers solve consumer needs “in-flight”. For example - getting off
a train; a meal option is suggested or healthier options are offered while
shopping.
This ability to anticipate needs on the go by offering solutions through
technology will be vital. Yet issues surrounding privacy and acceptance of
technology is still unknown.“
NIELSEN VIEWPOINT
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AGE GROUPS - MILLIONS
Source: United Nations World Population Prospects 2017
138M increase
in people aged over
65+ years in 2025
Australia, Bangladesh,
Cambodia, China, Macao, HK,
India, Indonesia, Japan, Lao,
Malaysia,
Myanmar, Nepal,
NZ, Philippines, Singapore, S.
Korea, Taiwan, Thailand,
Vietnam
ASIA PACIFIC
20
15
291.3.7
M
881.1M 920.8M 800.2M 569.6M 304.3M 3,767M
292.7M 853.4M 875.9M 858.6M 717.3M 442.2M
0-14
years
15-19
years
(Gen-Z)
20-34
years
(Gen-Y)
35-49
years
(Gen-X)
50-64
years
(Baby
Boomers)
65+ years
(Silver
Gen)
4,040M
Share of
Population
20
25
-27.7M +1.44M -44.8M +58.4M +147.7M +137.9M
8% 23% 24% 21% 15% 8%
22% 21% 18% 11% 21% 7%
CASE STUDY > DRIVER > CHANGING DEMOGRAPHICS
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AGING
POPULATION • Negative economic growth, less
investment
• Smaller working population
• Shrinking industries reliant on labour e.g.
nursing, construction
• Labour reform including family friendly
policies & retirement age
• Technology and robotics replacing labour
shortages
• Health food and supplements for aging people
• Delivery services and in-home care for aged
segment
• Aged-friendly packaging – larger letters – icons
and labelling systems
• Aged-friendly retail layouts
YOUNG
POPULATION • Higher economic growth, more investment
• Number of workforce outweighs number of
dependents
• Focus on education
• More spending power
• Infant & children focused retail outlets and
product ranges
• Youth programming and media
• Marketing toward young families
DEMOGRAPHIC CHANGE BRINGS OPPORTUNITY
AND CHALLENGES
SOCIETAL IMPLICATION POTENTIAL INDUSTRY RESPONSES
E.g. JAPAN
E.g. PHILIPPINES
CASE STUDY > DRIVER > CHANIGNG DEMOGRAPHICS
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CASE STUDY > SIGNAL > CHANGING DEMOGRAPHICS
AGING DEMOGRAPHIC CREATES HEALTH CHALLENGES
“Insulin resistance is the major cause
of ageing and death in the developed
and most of the developing world” Mark Hyman, US physician & researcher
"The engagement with, and response
of the beverage industry, to lower the
sugar level in sugar-sweetened drinks
is commendable” Dr. Goh Su-yen, head of Endocrinology at Singapore Hospital
Industry Response
Pledging any drinks with more than
12% sugar will be removed from
shelves by 2020
228 million with diabetics in
Asia by 2030 Effects increase as people age
Source http://www.dnaindia.com/health/report-60-per-cent-of-world-s-diabetes-will-come-from-asia-us-expert-2464242
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CASE STUDY > SIGNAL > CHANGING DEMOGRAPHICS
RETAILERS RESPONDING TO AGING DEMOGRAPHIC
“For those in their 70s
and 80s, as future
uncertainties fade after
they free themselves of
the burden of nursing
their parents, they will
have more free time and
feel comfortable
financially.”
-Shinya Sano,
Chief research manager Platinum Society Center
100 retail outlets Targeted at senior consumers
https://www.japantimes.co.jp/news/2018/01/03/business/retail-giant-aeon-evolves-engage-japans-aging-customer-base/#.Wmk2pajXbIU
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SHRINKING HOUSEHOLD SIZES + INCREASING WAGES IMPACTS LIFESTYLES AND SPENDING
Source: EIU
CASE STUDY > DRIVER > HOUSEHOLD SIZE + STRUCTURE
0%
30%
60%
-8% -4% 0%
AVE. WAGE
% CHANGE
HH % CHANGE
INDONESIA
Increase in single + nontraditional households
(with more income and less dependents) =
CHANGING SPENDING PATTERNS
Focus on smaller pack types and
convenience
Create strategies to capture valued
single segment
Explore premium and luxury
opportunities -
CHINA
JAPAN
VIETNAM
INDIA
TAIWAN
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CASE STUDY > SIGNAL > CHANGING DEMOGRAPHICS
INCREASED CAPABILITY = INCREASED SPENDNG
Rising middle-class households
from emerging markets ≈ 45% of
$1.5 trillion spent on cross-border
tourism by 2025
“Growing awareness of major fashion
brands and the rise in disposable
incomes driving growth of luxury in
Asia. But lack of distribution channels
and outlets in the emerging economies
will restrict market growth.”
Transparency Market Research report
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Vishal Bali Managing Director
Nielsen China
Two triggers are sparking a trend known as “consumption
upgrade”. Rising disposable income means that consumers
are more confident in spending their money on a number of
categories – especially food, cosmetics and clothing.
Following this, middle- to upper-class consumers are now
increasing their demand for goods that are not available
domestically. Online platforms, where international high-end
and niche brands are easily accessed, are rising in
popularity, while cross-border shopping sites are leading the
consumption upgrade movement.
NIELSEN VIEWPOINT
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25%
36%
48%
63%
77%
142%
Asia Pacific
China
Philippines
Indonesia
Thailand
India
INFRASTRUCTURE INFLUENCES BUSINESS AND CONSUMPTION
Source: EIU
CASE STUDY > DRIVER > INFRASTRUCTURE
INTERNET PENETRATION (Ranked on % change 2020 vs 2015 Per 100 People)
• Enables social connection, commerce, education
• Encourages investment
• Creates new efficiencies and ease of doing
business
• Integrates “unbanked” into global market
Go direct to new regions and households
Use e-commerce services
Think about consumer experience outside
physical retail
Take advantage of new products and reduced
supply chain costs
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INFRASTRUCTURE STIMULATES CONSUMPTION
Source: Firstpost.com -- http://www.firstpost.com/business/digital-revolution-indias-1-trillion-tech-future-depends-on-the-next-500-million-people-online-4229133.html
CASE STUDY > SIGNAL > INFRASTRUCTURE
"The internet went from a form of
communication to one of the main
mediums over which business is
conducted today. India’s digital
economy is expected to be 1 trillion
dollars in the next three to five years”
-Ravi Shankar Prasad.
Minister of IT and Electronics, Government of India
462m internet users
in India 82% accessing web via mobile
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CASE STUDY > SIGNAL > CHANGING CONSUMER PATTERNS
"Google makes money on advertising.
Anything that expands the total audience
fits the model, including giving away
things like Internet access."
-ROGER KAY principal analyst at Endpoint Technologies Associates
TECH GIANTS CAN HELP EXPAND INFRASTRUCTURE
~1 BILLION Indians aren’t online
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NIELSEN VIEWPOINT
PRASHANT SINGH Digital Retail Leader
Nielsen India
E-commerce platforms and sales will grow very
rapidly in Asia over the next 5 years but it will not be
uniform across countries or even within one country.
The need for convenience for time poor big city
urbanites will be the driver for e-com and delivery,
pick up options whereas for people outside of these
main centers we will see the lack of specialty
products such as fashion, premium products and
beauty coupled with great price deals drive growth
as we saw in rural China.
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MANY OTHER DRIVERS OF CHANGE
POLICY & LEGISLATION ENVIRONMENTAL CHANGES INDUSTRY/BUSINESS
INVESTMENT & INNOVATION
SUGAR TAX
SUSTAINABILITY LEGISLATION
FOOD SCARCITY DRONE DELIVERY/ STAFFLESS STORES
SIGNALS OF POTENTIAL CHANGE
DRIVER OF CHANGE
38
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GROWTH FROM
CHANGE
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ASK WHAT’S NEXT ...
What consumer behaviors and attitudes
can we expect?
Where will consumer demand be in
the future?
What thoughts and ideas do consumers
have about this? What do they want to
see in the future?.
What does sales growth look like in the
future?
What drives successful innovation?
How are the current environment and
change factors influencing consumption?
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AND GET THERE FIRST WITH ...
• Macroeconomic Analysis
• Scenario Development
• Thought Leadership
• Big Data
• Advanced Analytics & Forecasting
• Market Indexing
• Superconsumers
• Early Adopters
• Innovation Testing
• Factors Of Success
• Category/Consumer Analysis
• Customer Experience
• Qualitative Testing & Insights
• Crowd Sourcing
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KNOW WHERE DEMAND WILL BE IN THE FUTURE With Big Data and Regional/City Market Forecasting
NAVIGATING THE FUTURE
ASEAN CITYSCAPE
“ECONOMIC PROSPERITY AND
CONSUMER SPENDING WILL NO
LONGER BE CONFINED TO THE
REGION’S PRIMARY CITIES.”
2015 2017
Market and category evolution analysis ....
Combined with big data to understand
externalities on regional and city
consumer value ...
Has disproved myths about consumption
in ASEAN ...
And this provides a roadmap of
when/where consumption will take off
for future investment.
42
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“Superconsumers are the canary in the coal
mine and the tip of the spear when
it comes to either anticipating or better yet
creating disruptive innovation.”
EDDIE YOON
Author of “Superconsumers”
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KNOW WHAT BEHAVIORS AND ATTITUDES TO EXPECT
2.5% 2.6% 3%
4.4%
5.7%
7.8%
12.2%
0
2
4
6
8
10
12
14
2003 2005 2007 2009 2011 2013 2015
Craft National Volume Share
7%
8%
15%
10% (2006)
15% (2011)
6 Year Early
indicator
CRAFT BEER
Sh
are
of V
olu
me
Inception Early Adopters Early Massification
Example Deliverable: 6-9 Year Head Start on Early Beer Trends
Source: National Brewers Association, Craft Brewing Business, TCG Analysis
With Super Consumers
44
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“THE FUTURE IS ALREADY HERE.
IT’S JUST NOT
EVENLY DISTRIBUTED.”
WILLIAM GIBSON
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ASK YOURSELF ...
TO UNDERSTAND CHANGE TO GROW FROM CHANGE
• What timeframes—short-, mid- or
long-term, do I think about when
planning my strategy?
• Do I know what drivers of change
will have most impact on my
business, both locally and globally, in
the next 5-10 years?
• How can I integrate my
understanding of drivers and
signals into work every day?
• How am I going to use my
understanding of change to ensure
success in the future?
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TURN CHANGE INTO GROWTH
Create a forward-thinking strategy to grow your
business. 3
Use future-focused tools test the information
you’ve gathered. 2
Understand change—
when and how it happens. 1
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Q & A
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WHAT’S NEXT?
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