Middle class income is no longer enough to define the consumers that drive the global economy. As technology revolutionizes shopping, it’s creating a new consumer demographic—one that’s plugged in, ready to spend and at the forefront of consumer trends. Connected Spenders span all income levels and are defined by two characteristics: They have internet access and they are willing to spend their discretionary income. What’s more, new research from The Demand Institute projects that they will account for 46% (or $260 trillion) of global consumer spending over the next decade.
This group is also growing. The Demand Institute forecasts that the number of Connected Spenders worldwide will more than double from 1.4 billion in 2015 to 3 billion in 2025. Fueled primarily by growing access to the digital economy and all that comes with it, emerging markets like Indonesia, Pakistan and Nigeria will see the greatest increases in the number of Connected Spenders. Meanwhile, Connected Spenders in developed markets like the U.S., Japan and Germany will contribute the most to sales growth, spending 10x the amount of their counterparts in emerging markets. For companies coping with a sluggish global economic environment and middle-class malaise, tapping into the Connected Spenders can help generate healthy growth.
So how should brands and retailers engage with this digital savvy consumer base? First, reach them online with personalized digital advertising and holistic omnichannel strategies. And win them over by crafting innovation around their specific preferences; Connected Spenders are eager to try new products, and are willing to pay a premium for higher quality. In the video below, Louise Keely, EVP and global retail practice leader, breaks down how this group’s spending behavior will impact the global economy. For additional insights, read the article in Harvard Business Review or watch the recording of Nielsen’s Connected Spenders webinar.