is your brand hip to urban consumers?

By February 24, 2011branding, marketing, Uncategorized

Urbanomics—highlighted as one of 11 crucial consumer trends for 2011—is seen as a macro movement that will dominate the coming decade as more and more consumption takes place in urban settings. Those that will play a critical role in how markets and brands act and react are defined by trendwatching.com as:

Citysumers: The hundreds of millions of experienced and sophisticated urbanites, who have some level of disposable income, who are ever more demanding and more open-minded, but also more proud, more connected, more spontaneous, and more try-out-prone, eagerly snapping up a whole host of new urban goods, services, experiences, campaigns and conversations.

Three drivers behind the Citysumer trend are:

  1. The huge increase in the number of urban dwellers all around the world (Urban Boom).
  2. The ever-increasing wealth and power of cities and those who live in them (Urban Might).
  3. The spread of urban culture and values (Urbane).

Urban Boom: great increase in urban dwellers worldwide

  • If it wasn’t for China (43%), Africa (33%), and India (29%) the world would already be significantly more urbanized than the 50.5% it is today. (Source: CIA The World Factbook, 2010) And China, Africa, and India are all set for immense urbanization in the next few decades to come.
  • Close to 180,000 people move into cities daily, adding roughly 60 million new urban dwellers each year. (Source: Intuit, October 2010)
  • By 2050, the global urban population is expected to be 6.3 billion, or 70% of the population at that time. (Source: UN, 2009)
  • By 2030, China will have an urban population of 1 billion, and India 590 million. Currently, Europe’s urban population is 533 million. (Source: McKinsey forecast & UN data, 2009-10)
  • By 2030, China will have 221 cities with more than 1 million people, and India will have 68. In 2010, Europe has 35. During this period, 400 million Chinese and 215 million Indians will move to urban areas, more than the population of the US and Brazil combined. (Source: Foreign Policy, August 2010)
  • In January 2011, Chinese city planners proposed merging the nine cities around the Pearl River Delta into a single metropolitan area, containing some 42 million people; more people than Argentina, and covering an area 26 times bigger than Greater London. (Source: Reuters, January 2011)

    In the very near future, there will be more cities, both newer and bigger than ever. And while established global powerhouses such as New York, London, and Paris are sharing the stage with Beijing, Mumbai, and Istanbul, increasingly cities such as Belem, Chongqing, and Guadalajara are preparing to join the ranks.

    Urban Might: ever-increasing wealth and power of cities and city-dwellers

    • Indian cities are forecast to generate 70% of new jobs created to 2030, produce more than 70% of Indian GDP, and drive a near fourfold increase in per capita incomes across the nation. By 2030, India will have 91 million urban, middle-class households, up from 22 million in 2010. (Source: McKinsey Global Institute, April 2010)
    • China’s Academy of Sciences estimated that for every 1% increase in urbanization, China can expect a 1.6% increase in the contribution made by domestic demand to China’s GDP. (Source: Deloitte, June 2010)
    • Shanghai’s economy represents over 13% of China’s total GDP, despite having less than 2% of the population. (Source: UN Habitat, 2010)
    • The number of African households with discretionary income is projected to rise by 50 percent over the next 10 years, reaching 128 million. By 2030, the continents’ top 18 cities could have a combined spending power of USD 1.3 trillion. (Source: McKinsey, June 2010)
    • Delhi, Shanghai, São Paulo and Moscow are each expected to reach a GDP in excess of USD 500 billion by 2025—more than the GDP of entire nations such as Indonesia or Belgium today. (Source: McKinsey, December 2010)

    A global emerging middle class numbering nearly 2 billion currently spends $6.9 trillion (USD) each year. In ten years time, this is forecast to increase to $20 trillion, double current US consumption. (Source: McKinsey, July 2010)

    Urbane: urban culture is the culture

    The fast paced and ever-changing nature of urban life means an endless number of new and fleeting social connections, experiences, and (commercial) temptations. Some quick indicators of Citysumer’s spending power and behavior:

    • The average Manhattanite household spends 59% of their $13,079 USD food budget on dining out, compared to the average American household that spends only 42% of their $6,514 USD food budget on dining out. (Source: Bundle, May 2010)
    • Even four years ago, Harris identified “Urban Hustlers,” who compose 21% of US consumers aged 12-34 and spent close to $9 billion USD (10% of their annual spending), on recreational activities. Urban Hustlers are spending, on average, over $100 USD more than the non-urban population monthly, with their overall discretionary spending reaching $383 USD per month. (Source: Harris Interactive, June 2007)
    • The lifestyle of urban Chinese consumers has changed from “survive” to “enjoy life” with 54% now pursuing a more fun lifestyle. (Source: GfK Roper, 2010)
    • Only 17% of Chinese urban dwellers say they are “reluctant to spend money.” (Source: Economist Intelligence Unit, August 2010)

    Constantly exposed to a wide variety of alternative lifestyles and experiences, Citysumers tend to be more open-minded. Recently, a Voice of India poll showed that almost a third of Indians in Bangalore and Mumbai support same-sex partnerships, a figure that would have been unheard of only a few years ago. trendwatching.com calls this “maturialism” (mature+materialism) and defines it as follows:

    Maturialism: Thoroughly exposed to (if not participating in) an uncensored, opinionated, and raw world (especially online), experienced consumers no longer tolerate being treated like yesteryear’s easily. Not every Citysumer is enthusiastically and overwhelmingly liberal, but the clear (if gradual) global social trends are towards more tolerant attitudes towards abortion, euthanasia, casual sex, homosexuality, drug use, women’s rights, etc. More diverse living arrangements and the removal of many of the traditional social structures in cities are a big part of this.

    All of this means that a large Urbane audience is up for brands that challenge, thrill, titillate, or even shock (in the best possible taste, of course). At the very least, brands need to show some personality, loosen up, and embrace urban culture, in all its gritty glory. Risky? Yes. But not as risky as being bland.

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