How will rapidly evolving societies change the way consumers and brands engage?

Diversity as a competitive advantage

In this future world, Canada will continue to be one of the most desired destinations for immigrants. The rapid development of cities like Toronto and Vancouver, including the need for more skilled labour, will turn immigration into a driver of economic growth. Because of this movement, borderless societies characterized by greater social, ethnic and economic diversity will lead to the creation of new cultural values and influencers.

By embracing new cultures, local communities will benefit from differing ways of thinking that will drive new paths of economic growth and innovation.

During the Vancouver hack, one group of participants highlighted that populations from around the world will likely continue to see Toronto, Vancouver and Montréal as highly desirable places to live. One participant from a large apparel retailer highlighted that this trend may be resulting in more competition from international brands that are choosing Toronto and Vancouver as pilot markets to launch their operations in North America.

As an example, the Greater Vancouver Area is home to more than 900,000 immigrants, accounting for about 40% of the total population, with most coming from Asia.¹ With such a multicultural consumer mix, numerous international brands are selecting this region as their first destination to launch their operations in North America. Especially in the case of brands from Asia-Pacific, Vancouver offers an excellent testing ground.²

As these Canadian cities take their place in the world, these cities will become leaders in diversity, inclusiveness and accessibility. At the same time, future consumers will expect that brands participate in shaping a healthy economic equilibrium that sustains the wellbeing of all citizens.

Brands that align with these beliefs and values by reinventing their business models to support inclusiveness will be more likely to gain access to Canadians’ wallets.

Inclusion of the silver economy

In this future world, as baby boomers begin to retire, the quest for the “silver economy” will lead to new business models and innovations. As life expectancy rises, there will be a growing demand for goods and services that cater to an older demographic.

Enabled by technology, innovations will empower seniors through access to new products and services. As a result, companies will strive to attract this more productive senior workforce by accommodating working standards and practices to their needs.

During the hack, a public sector organization highlighted that the population of retirees and people above the age of 60 is rapidly growing in Vancouver and throughout Canada. As a result, the demand for new products and services, both from the public and private sectors, is rising. The organization is part of a whole new industry dedicated to the wellbeing of this specific segment of the population that is expanding in Canada.

For example, the number of people aged 65 or older comprises 20% of the BC population, and by 2031 that number will rise to 1 in 4.³ This rising trend is consistent with other major cities throughout Canada and raises opportunities to redesign communities that consider and facilitate accessibility and affordability of health care and other services like housing, recreation and transportation to these growing segments of the population.

Driven by this trend, practices such as inclusive design and catering to the needs of the silver economy will be important brand differentiators. Brands that make products and services accessible, targeting the lifestyle and health needs of older consumers, will gain expedited access to new markets.

Better questions:

• Should innovation be a function or a mindset?
• Are legacy systems or legacy mindsets your digital transformation nightmare?

Purpose will be sold as the commodity of the future

In this future world, consumers will experience buying and shopping as very different activities. As routine tasks become alleviated through automation, consumers will shift how they spend their time. These shifts will see individuals and businesses organizing around purpose, where customers will invest time in shopping for products and services from brands that align with the ways they want to express who they are.

During the hack, a major Canadian retail brand highlighted that their organization had shifted focus from just selling clothing products to creating a lifestyle experience that customers feel associated with beyond just buying the products. The company has launched stores that offer healthy lifestyle experiences, including fitness facilities, fresh meals and personalized training. As a result, the brand attracts a particular demographic that aligns with this lifestyle and is loyal to the brand.

As an example, the retail scene in Vancouver remains a highly competitive battleground, with two contrasting approaches to attract customers. On one side, large international brands like Amazon’s on-line e-commerce platform continue to emphasize access and convenience. On the opposite side, boutique brands remain competitive and relevant by emphasizing values such as made-in-Canada or by catering to customers who seek specific shopping entertainment and social experiences.⁴ In a recent survey conducted by the Business Development Bank of Canada (BDC), 97% of respondents indicated that they would try to buy local to support the local economy.⁵

Rather than catering to all consumer segments, brands that want to differentiate their products and services will need to focus on customers for whom their brand matters. By adapting their business models to how these customers want to enjoy their products and services, brands will attract shoppers.

Purpose-driven communities create new customer niches

With technological advancements being delivered at unprecedented speeds, consumers are becoming ever more connected, and in turn more engaged and politically aware, particularly the younger generations.⁶ These technological advancements are exacerbating the polarization of purpose, and price-driven shopping as brands do not always align with both factors.

During the Vancouver hack, one group of participants explored how new micro-communities have been emerging in Canada, bringing together groups of people who identify with specific causes. One example is the prominence of green- or sustainability-oriented consumers who have started taking action to support the environment by building self-sustaining neighbourhoods and adjusting their consumption patterns.

This growing trend of micro-communities will attract individuals with a shared purpose to exchange knowledge and experiences, and to define new identities and values. They will also create new interfaces for businesses to service a new subset of customers by focusing on the specific needs of these niches.

Brands will have to respond to this changing market by understanding how to deliver on purpose and by transforming their business models and value proposition to fit into the ecosystem of newly formed micro-communities.

Better questions:

• Where do you start if you want to change the world?
• Why do uncertain times need certainty of purpose?

Loyalty earned though trust and sustainability

In this future world, growing global influencer groups will be empowered to challenge the limitations imposed by the rigidity of established socio-economic structures. The role of institutions will change as they adopt policies and practices that improve trust with consumers.

As governments search for alternative paths to enable economic prosperity, the changing dynamics between institutions, businesses and consumers around the world will create opportunities to collaborate. As a result, new groups and communities united by common causes and goals will have a stronger influence on changes in consumption behaviours.

During the hack, one public sector organization highlighted that Canada has benefited from government policy choices that have created one of the most sustainable regions in the world. This reputation is largely influenced by an active community of environmental advocates and strong collaborations between regional governments and key stakeholders from both the public and private sectors.

Not surprisingly, three Canadian cities — Montréal, Toronto and Vancouver — are among the highest ranked cities for life satisfaction for millennials in 2018.⁷ Among these consumers, there is a growing trend for considering “green” factors when making purchasing decisions, and increased alignment of buying behaviours to brands’ social or environmental practices.⁸

Brands that become transparent and genuine about their environmental stewardship among young consumers will grow their market share and attain loyal customers, earned through trust.⁹

Radical transparency

Today, customers expect to know more about the products they consume — the authenticity, quality, sustainability and the life-after-use, including recyclability and the environmental impacts of disposal. Companies try to engage consumers by making bold statements and promises, and yet the extent to which these promises are delivered can be hard, or impossible, to determine by their customers.

Expectations for transparency into a product’s life cycle continue to rise, and major brands compete to meet consumer demand for ethical, sustainable and socially responsible products. For example, Canada is home to a wealth of lifestyle brands that have a clear purpose at the heart of their business. They know their customers align closely with their brand’s purpose, and this focus is evident through marketing, product design, service experiences and relevant community engagement.

During the Vancouver hack, one adventure apparel retailer shared their experiences with pilot programs to recondition used products, standing behind the quality and effectiveness of their gear beyond use by a single customer and reducing the environmental impact of potential disposal.

This effort echoes a broad trend, including global giants like Adidas, Lego and others, in stating ambitious targets for reducing their environmental impacts. Brands are competing on environmental credentials, creating new products, services and marketing to showcase their efforts and to meet rising customer demand for better corporate environmental stewardship.

As environmental concerns continue to make headlines, brands will increasingly feel the pressure to back up their environmental ambitions with credible evidence to retain customer trust, advocacy and wallet share. Introducing radical transparency will require a radical shift throughout the product lifecycle from raw materials to use, re-use, recycling or sustainable disposal.

Tracing a product’s life cycle will require greater collaboration from design and manufacture to distribution and sale, a shift to include customer participation beyond the sale, all enabled through new forms of data collection, sharing and usage. This change requires innovative data-sharing agreements, more interoperable supply-chain technologies and social contracts.

Better questions:

• What could a smarter supply chain deliver?
• In a circular economy, what role does your customer play in the supply chain?