The Big Value Shift: How ripple effects are impacting every business
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The document discusses how major trends, influenced by changes in consumer behavior during the COVID-19 pandemic, are reshaping value chains and business ecosystems. Three key trends identified are the rise of home-centric consumption, shifts in travel dynamics, and a focus on sustainable consumption, all indicating significant economic impacts. Businesses must adapt to these shifts to capture new value opportunities and ensure relevance in a changing marketplace.
The Big Value Shift: How ripple effects are impacting every business
- 1. Thebig valueshift 01 How ripple effects are impacting every business Macroeconomic insight series Accenture Strategy
- 2. Newpatternsof consumerbehavior could endure long beyond the COVID-19 pandemic. The ripple effects will reshape value chains and their ecosystems. Accenture Strategy has quantified the broad impact of three major trends: Trend01 The decade of the home is here Trend02 Travel gets (re)grounded Trend03 Savvy, sustainable consumption is sustained More than US$3 trillion is at a stake. The long-term shifts in consumer behaviors are reshaping interconnected value chains and fundamentally restructuring the economy. Businesses that best anticipate the impacts will reap the benefits. 2The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.
- 3. Trend01 The decade of the home is here The longer-term implications of consumers avoiding public spaces, leading to the rise of the home, are far reaching. For example, commercial real estate and property demand in city centers will change as more people work from home. This shift in consumer and worker demand will ultimately impact the banking sector. Businesses must be acutely aware of the extended ripple effects to future outlooks. While some behavioral shifts will be temporary, partly due to government restrictions in many countries, others— such as people working from home more or an acceleration toward eCommerce—may become permanently entrenched. 3The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.
- 4. Therippleeffects US$2+ trillion in annual value could migrate from public spaces to home-focused industries 4The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.
- 5. Trend02 Travel gets (re)grounded We anticipate travel volumes picking up once an approved vaccine is widely available and travel restrictions are eased. However, it is now also likely that we will see moderate drops in longer-term demand, such as for business travel due to a shift to online meetings. Workers will still have vacation days and cash to spend on leisure. Value is likely to migrate to sectors like domestic tourism, digital entertainment, and outdoor recreation. However, it is now also likely that we will see moderate drops in longer-term demand for business travel, for example, due to a shift to online meetings. 5The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.
- 6. Therippleeffects US$318 billion of annual value could migrate from air travel to other types of leisure-oriented ecosystems 6The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.
- 7. Trend03 Savvy, sustainable consumption is sustained. Consumers are spending less, and budget brands are becoming more popular. Yet, business leaders should expect responsible consumption to persist as a long-term trend. For many consumer-facing companies, changing shopping preferences create risks as they shrink addressable market sizes. Companies should keep sustainability and purpose central as they make any shifts, as this will help position them well for market share gain and long-term growth. 7The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.
- 8. Therippleeffects US$687 billion in annual value could be lost as a result of changes in shopping preferences. 8The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.
- 9. 9 Preparetoshift To prepare for the Big Value Shift, companies should assess where there will be new pockets of value in the economy. The following questions can be used to help identify and capture this value: 1Are we truly consumer obsessed? While businesses today may collect vast amounts of data, what’s crucial is to translate this data into insight-driven decisions. This requires strong analytics capabilities— from data collection, to aggregation, to insight generation―allowing businesses to conduct “dynamic demand sensing” and shift operations in real time. 2Are we rethinking our value structure? The pandemic has the potential to fragment demand and profit pools, causing many industries to restructure significantly. By following the data, businesses can anticipate and get ahead of looming changes to their industry value structures. The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.
- 10. 10 3 Is our business model still relevant? Companies need to ensure their business models stay relevant and cost effective. eCommerce and direct-to-consumer models are accelerating in importance. These business model shifts will create new challenges, such as providing last-mile delivery at a cost-effective rate while keeping environmental implications in mind. 4 Is our operating model modular and flexible? Companies need agile operating models to respond swiftly to market changes and adapt to new ways of working. This means having the flexibility to turn data- generated insights into organizational change and built-in modularity coupled with adaptiveness to scale up and down as consumer demand changes. 5 Do we have the right capabilities? As value is redistributed, certain capabilities―such as digital―will become more essential and others less so. To create long-term strategic success, companies must be able to identify and access necessary capabilities. Ultimately, leveraging the wider ecosystem expands a company’s ability to align to shifts in consumer behaviors. The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.
- 11. Readourfullreport: 11 Thebig valueshift The big value shiftMacroeconomic insightseries Volume 01 Copyright © 2020 Accenture. All rights reserved.