After Covid19 - 4 scenarios of consumption and commerce
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Consumption & Commerce
What will the world look like ?

 

At the heart of the crisis, Echangeur BNP Paribas Personal Finance, with the contribution of the Observatoire Cetelem, invites you to discover applied Consumer and Commercial trajectories for the coming years. When the Echangeur has already announced for several years a break in the transformation of our models in 2020 and projected scenarios for the next decade, the covid-19 crisis could let us consider a redistribution of the cards.

After a few weeks of retreat on the effects of the crisis, we note that if consumption and trade are violently affected, these scenarios are confirmed. They come out of it impacted but also comforted, even exacerbated!

Noting that this projection has its place at the heart of the reflections and debates started on the impacts of the crisis but also on our future, we have decided to deliver them to you. We are convinced that they can shed light on the questions and testify to the acceleration of key levers for the transformation of consumption and commerce.

Above find the full replay of the press conference of April 22, 2020 by the experts of Echangeur.

A future destined for disruption and acceleration

2020 marks the advent of the 6th wave of structural change for the models. Riding upon decades, if not centuries, of technological innovation, the next wave will be driven by artificial intelligence enhanced by 5G and increasingly sophisticated tracking solutions.

Schlumpeter courbes

 

The crisis is amplifying the effects.

The transition period that we’re going through benefits, above all, stakeholders in the new economy, those who are weaving a new form of intermediation between commerce and the private individual.

As a result, the valuations of GAFAM companies have been boosted by several tens of billions of dollars. Amazon typifies this, reaching its greatest ever stock market valuation in the middle of the Covid crisis.

One of the first beneficiaries will be the health sector, and more generally care.

Even before the Covid-19 crisis, for stakeholders in the new economy, the sector already represented a major source of leverage for providing assistance and making lives easier.

 

A polarization of the futur exacerbated

By opening up the field of vision, thanks to macro framing indicators (demography, economy, technology, etc.) and applied fields (financial ease, customer experience, environmental awareness, etc.), it has been possible to model our future and give it body around 2 axes (Trade / Consumption) and 4 key scenarios.

4 scenarios for the future of consumption

 

 

Polarisation axes exacerbated by the crisis:

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Brands and business are enriching their presence among consumers with increasingly personalised value propositions. These contribute to strengthening the conversation established between a brand and their customer. Mobilised to take part in the war effort, listening to employees affected, and seeking closeness to customers, brands have every reason to reinforce their territory during the crisis.

Fleche verte clair pictoThe growth of the ecosystems heralded by Echangeur over the last 10 years will mark a turning point in the history of retail players. Increasingly, these firms will forge alliances to meet our requirements within powerful ecosystems open to all. Whether it’s on a local level or fighting more globally against Covid-19, platforms are organising themselves and accelerating the growth of their networks during the crisis.

Fleche verte clair pictoConsumers appreciate support from brands and businesses capable of going beyond their needs and helping them live simpler lives. The crisis is accelerating digitalisation in favour of a more suitable customer experience.  Brands must become part of their environment. Both on a global scale and in France, only 8% expect brands to stop advertising during the crisis (Kantar)

Fleche verte clair pictoTorn between their whims and their values, consumers will be more mindful of their consumption choices and, more generally, of the impact of their actions. Individuals will take greater responsibility out of concern for society as a whole. Questioned in October 2019 by L’Observatoire Cetelem, two out of three Europeans believed that they already took initiatives that favoured responsible consumption. Citizen mobilisation is accelerating with the upsurge in solidarity generated by the crisis.

 

 

 

4 scenarios to look ahead to

4 scenarios, 4 forms of progress, 4 timeframes.

Let’s not confuse fever and disease, the period we are going through reveals a much deeper crisis in our system. It encourages action on several levels of time.

 

Stars SystemeStars Systems

offers an immediate response when progress there is linear and without interruption. This scenario adds value to major brands and increasingly digital consumption. This trajectory is striking because the crisis will get rid of the most fragile and will not call into question the system with regard to its long-term impact…

With lockdown,

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The weakening and disappearance of actors accelerates the gaps.
An actor like Gap had to borrow 500 million dollars, in France La Halle opens a safeguard procedure. The Covid-19 will precipitate the fall of certain distributors for the benefit of trade leaders.

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Brands are all the more responsible.
From Boots to Walgreens, retailers are at the heart of the disease screening strategy. Dominant before the crisis, they will be even more after, proclaiming themselves war heroes.

Digital uses take a new level.Fleche verte clair picto
French food e-commerce (drive and delivery) has increased by 50% since March. Boomers are discovering the joys of online shopping. 68% have placed their first order.

 

Made LocallyMade Locally

is becoming the natural short-term trend because the scenario supports progress on a human scale. By legitimising local actions, it satisfies numerous aspirations (traceability, the environment, supporting local employment, independence etc.). It is already supported by territorial activism with the closure of borders and the necessary autonomy of nations.

With lockdown,

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Local shops earn points.
The large hypermarkets already in difficulty before the crisis have lost 24% of their activity since March. Kantar says local trade has seen traffic increase by 11% since March

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Territorial activism is intensifying.
In France, La Poste is opening the doors of its Ma Ville Mon Shopping platform to 1,200 merchants from 160 municipalities. In Quebec, the Blue Basket is supported by the government for local and responsible consumption.

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Local communities are gaining autonomy.
Autonomy becomes possible thanks to the cooperative short circuit model as in South Korea with Hansalim which feeds more than 2 million people.

 

 

Life ControlLife Control

is speeding up the pace in the medium term by proposing legitimate progress for everyone. Liable to combine its actions with States, this scenario has already clearly advanced through the actions of BATX in China, and is becoming an option in view of the growing influence of GAFA companies in the West.

 

With lockdown,

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Tracking becomes commonplace and becomes legitimate.
A large part of the population seems ready to sacrifice part of their private life in the name of the common good. According to an Odoxa study, 62% of French people say they are ready to download and use a tracking application.

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Connected objects multiply at the heart of our privacy.
The massive collection of health data from individuals in real time by new connected objects (watches, voice assistants, etc.) which represent more than 26 billion will enable the anticipation, detection, prescription and monitoring of infectious diseases.

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Ambient intelligence deploys its influence.
Amazon has created its own Amazon Care health entity, to establish the most intimate dialogue with the consumer and this, without going back.

 

 

Earth in progressEarth In Progress

is a long-term view. It calls into question the very idea of past progress and of growth at all costs. It is at the heart of the public debate at a time when the other scenarios bring about a sense of urgency without any real solutions. It could become the project for tackling a structural crisis for which salvation relies on collective action in touch with the sustainability of all lives on the planet.

With lockdown,

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The models are all the more questioned.
According to Coface, the number of defaulting companies will increase by 25% in 2020. The injunctions faced by governments, businesses, and even households, will be contradictory as long as the old models persist.

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The logic of a collective project is at the heart of public debate.
In Germany, McDonald’s employees come to reinforce those of Aldi. Initiatives involving consumers, producers and distributors on the same project open the way for long-term thinking in favor of a sustainable and united society.

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Priority review has never been more necessary.
A major Mc Kinsey study carried out in Asia shows that the environmental and social dimension will be among the key expectations of customers. Loyalty will be based on brands capable of refocusing on the essentials.

 

 

The 7 levers of our future

At the start of this new decade, a new generation of individuals and exchanges is emerging. Another world is preparing itself with its codes, organisations, technologies and also its values.

1.Brands and businesses will have to become the seals of approval of another form of consumption which is less transactional, less based on boundless consumerism.

2.The advent of the platform economy will encourage people to globalise the value proposition. Health will become it’s spearhead, if not a Trojan horse.

3.The interference of the private world with the public world will only be inevitable. This raises the question of governance faced with the power that some players have.

4.The autonomy, or even the independence of territories, will raise the question of a redistribution of responsibilities and a new global equilibrium.

5.Technological innovation will become just as suspect as it is salutary when digital technology proves indispensable and presents opportunities.

6.Consumption will be readjusted because it will become more conscious. The direct and indirect impacts of our marginal comfort will be much more present.

7.Everyone will have to take responsibility. It will re-pose the question of the direction of progress at a time when the sustainability of our society will never have been of such concern.

 

Cécile Gauffriau
Director of Echangeur BNP Paribas Personal Finance

cgauffriau@echangeur.fr

 

 

Download here the press release.
Press contact : Rumeur Publique 

Arthur Vandenkerckhove : arthur@rumeurpublique.fr | +33 6 24 35 21 38
Ophélie De Benedittis : ophelie.debenedittis@rumeurpublique.fr | +33 7 71 44 02 28

 

The 4 scenarios and post-crisis analysis were revealed during a press video conference organized on April 22, 2020 in France, here are some articles published in the press after the conference: