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The Study Group for the Revitalization of Consumption Economy Markets Based on Consumer Understanding (Consumption Intelligence Study Group) Compiles a Report

The Ministry of Economy, Trade and Industry (METI) established a Consumption Intelligence Study Group. The study group held five meetings from December 2016 to March 2017 aiming to discuss changes in consumer awareness, further understanding of consumers and ideal approaches to corporate management associated with such understanding, consumer-oriented innovation and other issues and forecasting the consumption economy markets around 2030. METI hereby announces that the study group compiled the discussion results into a report.

1. Background and objectives

As IoT, big data, AI (artificial intelligence) and other advanced technologies have been developing dramatically, society is transforming at an unprecedented pace. In addition, as diversity in consumer tastes advances, people are facing changes in their everyday lives, e.g., the aging of society and new approaches to ideal family shapes. In response to this trend, the conventional consumption economy markets in Japan are also facing a major turning point.

To address such environment changes, it is important for Japanese companies to watch future consumption economy markets not only from a supplier viewpoint but from a consumer viewpoint. In this approach, such companies need to shift their conventional approaches to corporate management to consumer-oriented ones based on further understanding of consumers (consumption intelligence).

This approach also requires companies to overcome challenges in consumers’ respective consumption behaviors in a data-based society and in the ideal relationship between companies and consumers.

To address this, the study group forecasted the consumption economy markets around 2030 from the viewpoint of consumers and discussed changes in consumer awareness, further understanding of consumers and ideal approaches to corporate management associated with such understanding. In addition, the study group discussed necessary efforts for advancing consumer-oriented innovation, and finally compiled the discussion results into a report.

The study group held the five meetings from December 2016 to March 2017, between which time at least three future-session workshops were held, bringing together members with knowledge of consumer understanding from a variety of fields, including those from the manufacturing, distribution and services industries, trendsetters (in the advertising and marketing industries), consumer-related associations and academic experts.

2. Key points of the report

1) Current situation of the consumption economy markets and changes in consumers

  • Looking at the overview of current consumption in Japan, the share of expenditures for services in total household expenditures is on the rise compared to interannual data since 1980.
  • Changes in consumers are seen in this trend, e.g., transferring the value of consumption targets from possession (of goods) to experience (of things) and changing consumers’ value on products from mere consumers of products to creators or suppliers of their own products.

2) Mid- to long-term changes and challenges forecasting future consumption economy markets

  • As future changes are expected to occur for sure, the future consumption economy markets in the 2030s may bring about such changes as: diverse consumption value, development of individual-based product manufacturing, dynamic pricing, and development of recommendation services targeting individuals, which will be caused by technological development, e.g., AI, biometric authentication and autonomous driving technologies, and social changes, e.g., diverse working styles, further dissemination of the sharing economy, and an increase in consumer-to-consumer business.

3) Three types of consumer behaviors

  • Consumer behaviors expected to be seen in 2030 are categorized into three characteristic types: autonomous consumption, heterogeneous consumption and impulse consumption
    Autonomous consumption → This type includes consumers who seek their own fixation and are able to control their own consumption.
    Heterogeneous consumption → This type includes consumers who seek products and services optimal to them but wait for other persons’ opinions from those who have discovered and recommended such products online using IT devices, etc.
    Impulse consumption → This type includes consumers who seek excitement and thrills from products and hope to discover such products based on impulse.
  • These three types of consumer behavior are commonly seen in one individual and are co-related to each other. In addition, consumers do not stay in any one of these types but shift between them from time to time. To more precisely ascertain a “sign of change” when consumers are about to shift between the types, companies should focus on the signs of change.

4) Approaches to accumulating and utilizing future consumption intelligence, challenges therein and measures therefor

  • To accumulate and utilize consumption intelligence to realize a more affluent consumption society, consumers, companies and the government will need to engage in the following efforts for example.
Practitioner of efforts Details of efforts
Companies Inter- and intra-company efforts for promoting information sharing, ascertaining of consumer insight, provision of incentives to encourage consumers to provide and disclose their personal information though providing security, information security, etc.
Companies and consumers Close communication, trusting relationships built through processes of design thinking and joint product development, ascertaining a sign of change in consumption behaviors through opportunities using SNS, etc.
Consumers Disclosing personal data and raising awareness therefor, conveyance of ideas for problem solving from individuals (prosumers), etc.
Government Establishment of innovation platforms, further disseminating digital receipts, API-based collaboration, e.g., among credit card companies, and establishing a market for consumer data and insights, etc.

Appendix:

Release date

March 31, 2017

Division in Charge

Consumer Affairs Policy Planning Office, Commerce, Distribution and Industrial Safety Policy Group

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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