TECHNOLOGY AS A MEGATREND DRIVER

January 2018
INTRODUCTION
ARTIFICIAL INTELLIGENCE
AUGMENTED REALITY/VIRTUAL REALITY
INTERNET OF THINGS
TECHNOLOGY AND MEGATRENDS
CONCLUSION
INTRODUCTION

Scope

 This report examines the role of technology in generating and shaping the Disclaimer
eight most influential megatrends impacting consumer markets and disrupting Much of the information in this
briefing is of a statistical nature and,
industries over the long term. In particular, the report focuses on the power of while every attempt has been made
technologies such as artificial intelligence, augmented reality/virtual reality and to ensure accuracy and reliability,
Euromonitor International cannot be
the Internet of Things in driving this change. held responsible for omissions or
errors.
Figures in tables and analyses are
calculated from unrounded data and
may not sum. Analyses found in the
briefings may not totally reflect the
companies’ opinions, reader
discretion is advised.

Technology continues to play

a critical role in the evolution of
society, with such advances set
to continue to reshape the world
as we know it. Technology also
plays a powerful role in driving
the most influential megatrends
impacting consumer markets.
These megatrends include
healthy living, ethical living,
connected consumers,
shopping reinvented, middle
class retreat, premiumisation,
experience more, and shifting
market frontiers.

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 3

INTRODUCTION

Megatrend framework

 Euromonitor International’s team of economic,

consumer, and industry trend experts have
identified 20 megatrends shaping consumer
markets. The research team has further predicted
the eight most influential megatrends to watch for
2017. These megatrends, sharing common drivers,
have the power to transform and disrupt entire
categories.
 Our launch of a megatrends framework, and
subsequent megatrend report series, provide
thought leadership on the trends with the strongest
influence on the world of tomorrow. In a rapidly
changing global environment, megatrend analysis is
critical for companies seeking to drive sustainable
growth and remain relevant as competition
increases, and new ideas disrupt entire industries.
 A megatrends framework enables us to better
identify new emerging trends, while also monitoring
the more established long-term megatrends
shaping the world. With our access to tens of
millions of data points, we are uniquely positioned
to provide a holistic approach to megatrends
analysis.

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 4

INTRODUCTION

Key findings on technology as a megatrend driver

Technology continues to play a critical role in the evolution of society, including the
upheaval of consumer-facing industries. In particular, the internet has been one of the
Technology uptake modern era’s most transformative innovations, and underpins up-and-coming
technologies such as artificial intelligence, augmented reality/virtual reality and the
Internet of Things.
While AI technologies were commercially available by the 1980s, it was not until the
turn of this century that the cognitive capabilities that comprise the emerging machine
Artificial
intelligence trend truly took off. Now the confluence of three powerful drivers, including
intelligence
exponential data growth, more sophisticated distributed networks and smarter
algorithms, have propelled artificial intelligence to the centre stage.
Augmented From a consumer perspective, gaming has been the main avenue for exploration for
reality/virtual augmented reality and virtual reality, but commerce brands are starting to experiment
reality with how these technologies could be leveraged to enhance the consumer journey.
The rise of the Internet of Things (IoT) will lead to more internet-enabled things
becoming digitalized, giving way to more use cases derived from this ubiquitous
Internet of Things connectivity. Thus far, many of the IoT applications have been used to automate a
process or remove friction from another. In time, IoT could be leveraged to improve
fulfilment or automate certain purchases.
The technological advances examined in this report have the potential to drive
Technology as a
tremendous opportunities with the transformative force of technology generating and
megatrend driver
shaping the eight megatrends impacting consumer markets.

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 5

INTRODUCTION

Technology continues to play a critical role in evolution of society

 Technology continues to play a

critical role in the evolution of Artificial intelligence
society, including the upheaval
of consumer-facing industries. Augmented/virtual reality
 For example, artificial
intelligence opens the door to Autonomous cars
merchants and brands creating
more personalised user Biometrics
experiences. Augmented and
virtual realities offer new lenses
through which to view the world. Blockchain
The Internet of Things provides
an opportunity for everything in Cloud technology
the surrounding environment to
communicate without human Mobile
intervention. Other profound
technologies are listed in the Robotics
chart on the right.
 While each of these 3D printing
technologies is disruptive in its
own right, the internet has been
one of the modern era’s most
5G networks
transformative innovations.

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 6

INTRODUCTION

Internet connectivity underpins many of today’s tech advances

 Connectivity is the new normal. The number of internet users has more than doubled over the last decade,
giving way to a truly mass participation technology. As of 2018, almost half of the global population uses
the internet, with Euromonitor International projecting that three-quarters will have access by 2030.
 In general, developed nations lead internet access, with many establishing this connectivity two decades
ago through fixed-broadband connections in the home. Digital connectivity in emerging markets has been
largely driven by mobile, due in large part to the less costly networks and the falling cost of devices.
 The smartphone and on-the-go access it provided truly democratised internet access. In particular, mobile
internet enabled consumers of all types to plug in regardless of their status or location. While smartphones
ushered in greater convenience for developed market consumers, the mobile phone became a lifeline for
emerging market consumers, enabling governments and companies to deliver new services.
 This more widespread internet access serves as the backbone for many other technological advances.
Consumer Access to the Internet Globally 2018-2030
100

80

60

40

20

0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Percentage of Population Using The Internet Percentage of Population Covered by at least an LTE/WiMAX Mobile Network

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 7

INTRODUCTION

Half of connected consumers would be lost without internet access

3.6bn
GLOBAL INTERNET USERS AS
OF 2018, WHICH EQUATES TO
HALF OF THE POPULATION

53%
CONNECTED CONSUMERS
REPORT THEY WOULD BE
LOST WITHOUT THE
INTERNET

31%
CONNECTED CONSUMERS
PREFER ONLINE
COMMUNICATION RATHER
THAN OTHER MEANS

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 8

INTRODUCTION
ARTIFICIAL INTELLIGENCE
AUGMENTED REALITY/VIRTUAL REALITY
INTERNET OF THINGS
TECHNOLOGY AND MEGATRENDS
CONCLUSION
ARTIFICIAL INTELLIGENCE

Artificial intelligence

 Artificial intelligence (AI), which refers to technologies

capable of performing tasks normally requiring
human intelligence, goes back centuries. The idea of
cognitive computing gained steam in the 1940s when
Alan Turing suggested that a machine could simulate
any conceivable act of mathematical deduction.
 While AI technologies were commercially available
by the 1980s, it was not until the turn of this century
that the cognitive capabilities that comprise the
emerging machine intelligence trend truly took off. In
2011 IBM Watson famously beat Jeopardy
champions, and personal assistants such as Siri,
Google Now and Cortana became mainstream. In
2015, Elon Musk and others announced a USD1
billion initiative to develop a friendly artificial
intelligence.
 Now the confluence of three powerful drivers,
including exponential data growth, more
sophisticated distributed networks and smarter
algorithms, have propelled artificial intelligence to the
centre stage for end-user applications. The graphic
(right) explores three key aspects, and how savvy
consumer brands are beginning to leverage AI for
commerce applications.
Machine learning
• About: Teaches itself with minimal
programming
• Example: Marketers can use it to
determine the best time to send
emails to customers
Deep learning
• About: Used extensively for vision-
based classification
• Example: Brands could find their
product or logo in every photo online
Natural language processing
• About: Interpret what people are
saying in words or text
• Example: Companies could automate
the customer service experience of
the future

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ARTIFICIAL INTELLIGENCE

Impacts of artificial intelligence

Empower store associates Enable more powerful search Improve recommendations

Autonomous robots have the Leveraging machine learning, Using AI, brands can more
ability to greet customers and software can automatically tag, intelligently comb through data to
aid employees with inventory organise and visually search offer personalised
management content recommendations

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 11

ARTIFICIAL INTELLIGENCE

Case study: Twiggle helps search engines mimic human speech

With USD1.2 trillion in goods purchased globally online in 2016,

improving the search function in order to increase conversions is potentially very lucrative.

 Twiggle assists search engines in
understanding context and recognising terms
such as “dress shirt” as a clothing category. By
mimicking how humans converse, Twiggle says
it can return more accurate search results and
lift conversions by 18%.
 The Israeli start-up was founded in 2013 by ex-
Google employees, under the notion that most firms
cannot afford the investment needed to build a
Google search engine. Investors include South
African internet conglomerate Naspers, and Chinese
internet retail giant Alibaba.

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 12

INTRODUCTION
ARTIFICIAL INTELLIGENCE
AUGMENTED REALITY/VIRTUAL REALITY
INTERNET OF THINGS
TECHNOLOGY AND MEGATRENDS
CONCLUSION
AUGMENTED REALITY/VIRTUAL REALITY

Augmented reality/virtual reality

 Augmented reality (AR) and Forecast Global Volume Sales of VR/AR Headsets
virtual reality (VR) technologies 2016-2021
offer an escape from everyday life. 40
Although still in the early stages of 35

Units sold (millions)

adoption, their novelty and the 30
25
fantasies they enable have
20
encouraged people to get off their
15
sofas in search of new 10
adventures, or simply given users 5
a new perspective. 0
2016 2017 2018 2019 2020 2021
 From a consumer perspective,
gaming has been the main avenue Forecast Volume Share of AR/VR Headsets by Region
for exploration, but commerce 2016-2021
brands are starting to experiment. 100%

For example, these technologies 80%

have the ability to drive foot traffic
60%
to create new brand experiences
or establish a virtual store. Many 40%

in commerce, from beauty brands 20%

to home furnishings retailers to
0%
travel agents, are experimenting 2016 2017 2018 2019 2020 2021
with how they could be leveraged North America Western Europe Asia Pacific Eastern Europe
along the consumer journey. Middle East and Africa Latin America Australasia

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AUGMENTED REALITY/VIRTUAL REALITY

Impacts of augmented reality/virtual reality

Entertainment Product Discovery Immersive Experiences

Developers can create games
that leverage VR to transport
gamers into a digital world or use
AR to layer the digital world over
the physical world.
Brands and retailers can leverage
augmented reality to enable
consumers to visualise products
such as beauty or home
furnishings in a real-life setting.
Retailers or travel operators can
use VR headsets to immerse
consumers in a virtual world in
order to shop for products or
travel destinations.

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AUGMENTED REALITY/VIRTUAL REALITY

Case study: Expedia immerses would-be travellers into locales

Expedia, a leading travel intermediary with a 9% share globally, has been investing in technology
to attract younger travellers.

 Euromonitor International’s Global Consumer
Trends Survey found that 78% of connected
millennials have researched travel in the last year –
the most of any generation. In comparison, 67% of
connected baby boomers have reported doing so.
 Expedia has leveraged VR to mimic trips and is
working on an experience to allow users to view
prospective hotel rooms. Expedia, which invested
more than USD1 billion in its technology in 2016, is
also looking at incorporating voice into the booking
experience.

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 16

INTRODUCTION
ARTIFICIAL INTELLIGENCE
AUGMENTED REALITY/VIRTUAL REALITY
INTERNET OF THINGS
TECHNOLOGY AND MEGATRENDS
CONCLUSION
INTERNET OF THINGS

Internet of Things

 This shift towards more internet-enabled products Device Ownership and Usage 2016/2017
has been dubbed the Internet of Things (IoT). In
Smartphone
simple words, this refers to a virtual network that
connects things, people and devices. In a futurist Laptop computer

world, everything in the surrounding environment Digital flatscreen TV

could communicate without human intervention. Desktop computer

 There are three components needed to create this Tablet

ecosystem: sensors, connectivity and networks. Gaming console

Sensors are the world’s digital nervous system. Portable music player
These inputs are digitised and interconnected in Feature phone
either personal or public arenas through the power Portable speakers
of internet connectivity. From there, these inputs Portable gaming system
can be combined into bidirectional systems that
Wearable fitness tracking device
integrate data, people and processes for improved
E-reader
decision-making. In simple terms, the IoT is the
"Smart" home appliance
intelligent interaction between humans and things to
exchange knowledge for a new value creation. Smartwatch
Analog TV
 Of all the devices consumers use to connect to the
internet, smartphones are the most common. Nearly Do not own or have access

90% of connected consumers globally reported 0 50 100

owning one, a slight increase from a year earlier. % online global respondents
Portable speakers, smart watches and smart home
appliances have shown some of the greatest gains. 2016 2017

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 18

INTERNET OF THINGS

Impacts of the Internet of Things

Auto replenishment Goods “as a service”

Fulfilment logistics
Given that many durable goods Manufacturers could adopt
Sensor-based technology enables
require continuous service-oriented business
companies to track orders from the
replenishment, there is an models by offering remote
moment an order is placed and
opportunity to automate the monitoring, performance
through the supply chain until the
ordering process by leveraging analytics and predictive
moment it reaches the consumer’s
the IoT to track consumption maintenance as an on-going
doorstep.
and automate the order. service to end-users.

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 19

INTERNET OF THINGS

Case study: Samsung is one of many making homes smarter

Australia, South Korea and the US had the highest percentage of connected washing machines,
dryers and fridges sold in 2016.

 As the home of Samsung Electronics, South
Koreans are among the earliest adopters of the
brand’s latest products, with many of these
products, such as its devices, wearables and
appliances, entering the market commerce-
enabled.
 Samsung’s Family Hub Refrigerator allows
consumers to update calendars, leave notes, and
even order groceries through partnerships with
players such as Emart Co Ltd and Homeplus Co
Ltd in South Korea, and FreshDirect and ShopRite
in the US.

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 20

INTRODUCTION
ARTIFICIAL INTELLIGENCE
AUGMENTED REALITY/VIRTUAL REALITY
INTERNET OF THINGS
TECHNOLOGY AND MEGATRENDS
CONCLUSION
TECHNOLOGY AND MEGATRENDS

Technology generates and shapes the eight megatrends

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 22

TECHNOLOGY AND MEGATRENDS
How technology generates and shapes the megatrends
Connected Consumers
• Digital connectivity underpins the very existence
of these consumers, altering all aspects of life
including how these consumers live, work, shop
and play.
Ethical Living
• The internet is providing businesses with a
powerful platform to promote their ethical
initiatives, giving smaller-scale ethical projects
greater visibility, as well as projecting the voice
of ethical consumers.
Experience More
• Technology acts as an enabler by enhancing
the overall experience, whether through big
data capture to improve targeting, or through
technology being overlaid with reality to
augment the experience.
Healthy Living
• Technology better enables consumers to
monitor one’s health, and this increased
digitisation accelerates the behavioural
transformation towards preventative health.
© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER
Middle Class Retreat
• Technology empowers these consumers by
giving them greater access to information and
choice.
Premiumisation
• Premiumisation is about priorities. Technology is
not only giving consumers more options from
which to prioritise, but it is also creating more
pressure to optimise those choices.
Shifting Market Frontiers
• Technology is boosting emerging markets and
opening up unconventional ones such as the
Arctic.
Shopping Reinvented
• Technology is interwoven into almost every step
of the new consumer shopping journey. The
smartphone, in particular, keeps the shopper
tethered to merchants and brand alike.
PASSPORT 23
INTRODUCTION
ARTIFICIAL INTELLIGENCE
AUGMENTED REALITY/VIRTUAL REALITY
INTERNET OF THINGS
TECHNOLOGY AND MEGATRENDS
CONCLUSION
CONCLUSION

Technology change: what you need to know

The internet has been one of the most transformative technologies of the modern era
and now underpins other technological advancements such as artificial intelligence,
augmented reality/virtual reality, and the Internet of Things.

The smartphone and its on-the-go access democratised the internet, connecting many
emerging market consumers for the first time, and offering greater convenience to
those already online.

Technology has created massive upheavals in consumer expectations, lowered the

barriers of entry for fast-moving companies, and inspired new digital-first business
models.

Even more so than other drivers, such as population changes or shifts in economic
power, the rapid uptake of new technologies continues to accelerate the rate of
change, making it harder for companies today to stay relevant tomorrow.

Continued technological advances in areas such as artificial intelligence and the

Internet of Things will further redefine what it means to live, work, shop and play for
consumers over the next decade and beyond.

© Euromonitor International MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 25

CONCLUSION
Leverage the power of megatrends to shape your strategy today
The importance of megatrend
analysis
Today’s environment of fast-
paced change makes it more
challenging than ever to keep up
with competitors. Megatrend
analysis helps businesses better
anticipate market developments
and lead both incremental and
disruptive change for their
industries. Euromonitor’s white
paper “Megatrend Analysis:
Putting the Consumer at the
Heart of Business” provides
instructions on how to conduct
megatrend analysis for your
business.
© Euromonitor International
Don’t miss our other How Euromonitor Consulting
megatrend reports can help
 Experience More In addition to education and
 Shifting Market Frontiers awareness, Euromonitor
International partners with
 Healthy Living
businesses to quantify the current
 Shopping Reinvented and forecast impact of
 Middle Class Retreat megatrends, prioritising which
 Ethical Living megatrends and
industry/category level trends to
 Premiumisation
innovate against, and the next
 Connected Consumers steps for the company. To learn
more about how we can activate
megatrend analysis at your
company, please visit
http://www.euromonitor.com/cons
ulting-consultation-request.
MEGATRENDS: TECHNOLOGY AS A MEGATREND DRIVER PASSPORT 26
FOR FURTHER INSIGHT PLEASE CONTACT
Michelle Evans
Head of Digital Consumer Research, Euromonitor International
michelle.evans@euromonitor.com
https://twitter.com/mevans14/
https://www.linkedin.com/in/michelleevansmaclachlan
https://www.forbes.com/sites/michelleevans1/#

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