Andrew Curry writes:
It’s that time of year when people are starting to look ahead to the business environment for next year. From the perspective of The Futures Company, we believe that two elements will dominate in Europe and the United States – and in some ways they represent different sides of the same coin.
The first is that consumers are ‘looking down’, fearful that as recession continues and social protection is weakened by austerity-seeking finance departments, that they are only a slip away from ending in the gutter. The fact that some consumers are increasing their debts to cover basic living costs underlines how fragile their world is. The dominant chord in this landscape is a deep anxiety. Companies will have to respond by changing packaging and positioning. As Jan Zijderveld, the head of Unilever’s European businesses said in a recent interview:
“Poverty is returning to Europe. If a consumer in Spain only spends €17 when they go shopping, then I’m not going to be able to sell them washing powder for half of their budget.”
But businesses can do a lot more than just change their pack sizes. We have been talking to clients about the ’5Ps’ of the post-recession landscape: Protection; Practical; Permission; Purpose; and Pride.
If that is the economic landscape, the political landscape is at least as edgy. Our Global MONITOR research identifies a new large group of the ‘globally enraged’, who believe that businesses and governments are, in effect, out to screw them. Globally, this group is around 28% of the population, but it is higher in Europe, peaking at above 50% in Italy. How do you spot them? Easy. The profile of the ‘Enraged’ group is almost identical to the population as a whole.
It can be taken as read, of course, that businesses will be operating in low-growth markets, which means that they have to be smarter about innovation. There are opportunities there, as we describe in our recent Unlocking New Sources of Growth report. But the risks are greater. Consumers have only one question for businesses in the current landscape: ‘whose side are you on?’ And beware the business that gets the answer to that question wrong.
The image at the top of the post is from Wikimedia Commons, and is used with thanks. The caption reads, “Not enough bread for so much chorizo [pork]” – meaning corruption.