As digital transformation takes root across the consumer ecosystem, businesses must deepen their relationships with consumers to better understand their wants, needs, and aspirations. That is a key insight from the latest version of the Future Consumer framework created by the International Data Corporation (IDC).
“Technology is causing massive shifts in the way consumers live their lives, and technology companies, from hardware vendors to software developers to service and infrastructure providers, must think hard about how these shifts will impact their future offerings,” says Tom Mainelli, group vice president, devices and consumer research at IDC. “IDC believes that organizations must redefine their mission to be more relevant to the individual to drive toward that successful future. This new approach requires rethinking company operating models and cross-industry business models with an eye toward better understanding and enabling cooperation and collaboration with adjacent companies and industries.”
Toward that end, IDC has identified 10 tech trends – plus a bonus 11th! – that are driving the transformation of consumer behaviour and markets:
- New Pricing and Business Models – Subscriptions, Bundling, and Loyalty: Hardware products, in addition to media and services, are moving toward a subscription model.
- On Body Ecosystems – Phone + Wrist/Hand + Ears: Gradually, more people will use multiple devices that work as integrated ecosystems.
- Wireless & Broadband Connectivity – 5G, Wi-Fi 6, Bluetooth, WANs, and more: Digital connectivity will become more reliable, responsive, and seamless to enable more engaging and immersive experiences.
- Augmented and Virtual Reality: Vendors have struggled to develop AR and VR that consumers will embrace widely. Over the next five years, vendors will crack the code on augmented audio, improve AR for phones, smart glasses, and VR goggles.
- A Growing Range of Digital Productivity Devices: Many people start with a smartphone – and many will grow into using an integrated digital service platform across their PC, tablet, smart speaker, and virtual desktop service.
- Consumers Are Blending Work & Personal Devices, Services, and Places: The pandemic accelerated the consumerization trend, as work from home and touchless workflow drove greater use of personal technologies for work.
- Smart Connected Products – Body, Home, Transportation, IoT: IoT technology is enabling a wide range of smart, connected products that upgrade or transform many experiences, especially for well-being.
- Personal Digital/Cloud Services for Life, Security, and Privacy: Solutions will help consumers manage an unruly, messy combination of personal services and experiences by improving password management, financial monitoring, and security services.
- Digital Media, Social Media, and Advertising Are Colliding: Consumers are embracing digital streaming and the creator economy while dodging advertising, challenging business models.
- Digital Money – Wallets, Payments, Currency, and Crypto: Asian consumers are already deep into super apps for payment, while the pandemic pushed Western consumers away from currency to cards, tap-to-pay, and digital wallets, but not into super apps. Much more change is on the horizon.
- AI and ML Infrastructure Will Enable New Consumer Services: Consumers don’t use artificial intelligence and machine learning, but they do embrace compelling experiences that those technologies enable. Advances will enable experiences such as selective listening and highly personalized media.
IDC’s Future Consumer framework focuses on eight consumer segments – entertainment, housing, travel and dining, personal mobility, money, shopping, lifelong learning, and well-being. Unlike traditional consumer research, IDC employs a more holistic approach, providing clients with access to three distinct research services:
- Consumer Pulse Service – A primary research program that surveys consumers in seven countries to monitor attitudes, mindsets, spending, and brand perceptions across the eight Future Consumer segments.
- Consumer Market Model – An extensive worldwide data set that includes historical data and five-year forecasts of consumer digital activity and spending across a wide range of technologies, broken out for 8 regions and 51 countries.
- Future Consumer Agenda – Thought leadership program that articulates a broad, long-term view of the technology and society shifts that will impact consumers and the companies, organizations, and governments that serve them.
IDC recently hired Frank Gillett to lead the Future Consumer Agenda service. In addition to establishing the direction of the Future Consumer research agenda, he will collaborate with analysts from across IDC to illustrate how changes across the consumer landscape will affect consumer-facing companies, tech vendors, and other organizations and shape future business and societal outcomes.
“Digital transformation is happening across the consumer economy, which is two thirds of all global economic activity. This transformation is creating more and deeper relationships with consumers, resulting in disruption and change that ripples across markets and up supply chains,” says Frank Gillett, research vice president, Future Consumer at IDC. “To understand consumer transformation, IDC will use a holistic approach to go beyond technologies and markets. The Future Consumer services will use a shared framework focused on eight consumer activities. With this framework, we’ll tell comprehensive stories about the future consumer and how they’re using technology to transform life’s activities.”