Report On Marketing

Me,
my life,
my wallet
KPMG Global
Customer Insights
kpmg.com/customerinsights
© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Me, my life, my wallet 3
The multidimensional
customer
In an era defined by uncertainty, the companies that get
closest to their customers will emerge ahead of the pack.
This begins with an “outside-in” view, building new ways
of understanding how and why people make decisions.
Y
ou already know that that employs a multidimensional Five Mys
customer behavior is framework to engage what is now a
changing. Power has multidimensional consumer. Presenting the Five Mys —
shifted from companies a framework to help navigate
to consumers, the mobile phone Genesis of our findings the complexity of consumer
has become the remote control decision making
of our lives, trust in institutions For several years, we’ve worked
and traditional advertising has shoulder to shoulder with clients The underlying drivers of human
diminished. Customer trade-offs to understand customer attitudes, decision making have become
and decisions are more opaque and behavior and expectations in our exponentially more complex in recent
moving faster. present era of disruption and years. Yet transactional data, traditional
You’re already aware that the uncertainty. Faint signals of change market research and demographic
structure and composition of grew louder and bigger patterns began profiles alone are proving inadequate
industry has changed. New entrants to emerge beyond one individual sector, to explain not just what customers are
with radically new business models building a sense of urgency and leading doing, but why.
are enacting disruption across the to our belief that we’re witnessing a As a result, many of our clients
value chain, reshaping ecosystems structural change, not a temporal one. have found themselves out of step
from sector to sector. Meanwhile, As our teams constructed a new way with a changing, more informed and
company lifespans are shrinking and of thinking about a changing customer, more empowered customer. They’re
the paths to billion-dollar valuations we embarked on a multifaceted struggling to understand customer
are accelerating. research program to validate our motivations and how these translate
All these challenges are well thinking and bring to bear the voice of into new products and propositions,
documented across business media, the consumer. new services or ways of doing
research reports and conference Combined with the extensive, business and, crucially, how they
presentations. But how should you worldwide experience of KPMG’s should align their organizations to keep
use this information to understand network of member firms, this driving growth.
not only where your customers are has enabled us to identify how We start by taking an outside-in view
today but where they’ll be tomorrow? best to engage the 21st-century of customer behavior that enables
How can you rethink the basis of consumer, and our approach companies to understand the multiple
competition and pivot your operations provides a tangible framework layers and related calculus of human
and business models to win in the to help companies identify, decision making.
battle for growth? understand and respond to today’s And our research has led us to
It’s time for a new approach. One changing customer. focus on five key dimensions of
customer behavior — motivation, » 05 My wallet How consumers Customer wallet

attention, connection, watch and adjust their share of the wallet across
wallet. Considering any one of life stages and pivotal life events is Introducing the customer wallet —
these dimensions in isolation tells changing, creating a ripple effect of the reality of how we spend and save
only one aspect of a customer’s change across not just one, but all
story. Together, however, they categories to which they allocate While potential earning power and
enable companies to navigate their money. disposable income have long been used
the complexity of consumer in segmentation and in determining
decision making, and build a richer Defining the Five Mys customer attractiveness, the forces
understanding of changing attitudes, that open and close our wallets are
needs and behavior. undergoing significant change.
My motivation – Characteristics When, where, how and why we
» 01 My motivation Trust, authenticity that drive behavior and expectations spend is becoming more complex,
and social values are critical but My attention – Ways we direct our influenced by a greater variety
intangible motivators of the choices attention and focus of forces and greater availability
today’s consumers make. My connection – How we connect to of choice. It’s becoming less
» 02 My attention The fight for devices, information and each other predictable, as demographic and
consumer attention has never My watch – How we balance the economic shifts challenge the
been more intense, exacerbated by constraints of time and how that changes accuracy of legacy earning and
unprecedented volumes of content across life events spending trends. And the trade-offs
at our fingertips. My wallet – How we adjust our share we’re willing to make across different
» 03 My connection Today’s of wallet across life events categories are constantly evolving,
technology connects humans powered by mass adoption of new
to information and each other technologies and the rise of the on-
24/7, driving shifts in our social In the first part of this report, we demand economy.
interactions and behavior. explore each of the Five Mys in detail, The complex, unpredictable and
» 04 My watch The companies that illustrating how they contribute to a changing nature of our wallets calls
understand the constraints of time deeper understanding of the changing for a new way of thinking about the
and anticipate how that changes customer and potential impacts on the interrelationship among income,
across life events are best placed to customer wallet. Based on our in-depth borrowing, savings and spend. We
engage customers in the moments research, we discuss how these forces need to consider this mix in the
of greatest impact and to meet their manifest across different generations context of why we’re making the
needs head on. and in different parts of the world. choices we are and how the mix
changes across generations and is attractiveness as customers. life events that introduce new forces
influenced by pivotal life events. But things are no longer happening on the customer wallet.
Later in the report, we focus on the at the same time, or in the same Change isn’t looming in the
customer wallet, a framework which, order, as with earlier generations. Life distance. Instead, it’s the reality being
when used in concert with the Five stages are shifting and extending, faced by companies all over the
Mys enables companies to go beyond and life events aren’t as reassuringly world and no company, regardless
the limitations of socioeconomic predictable as they once were. of maturity or sector, is immune
profiles and credit scoring. To help companies ride the from these forces and competitive
waves of change, we’ve developed pressures. It’s demanding fresh ways
Generational surfing generational surfing, a fresh way of of thinking about the customer.
thinking about the changing patterns The Five Mys, customer wallet
Introducing generational surfing — of consumers’ lives and anticipating and generational surfing combine
the unpredictability of our life patterns their needs, behaviors, trade-offs to provide that fresh thinking,
and choices as they move from one bringing companies closer to their
For years, companies have life stage, or wave, to another. multidimensional customers, meeting
relied on assumptions about In the third part of this report, we them where they are and on their
our life stage, using age as a explore how life events are “drifting” terms, and helping them navigate the
proxy, to determine our spending among generations and reveal where change and disruption of both today
power, likely needs and relative our research has found new, pivotal and tomorrow.
The three dimensions of how Influencing

events
customers make decisions Events of my formative
years that shaped my
values and influence
my behaviors
Until now, there has not been
a compelling, comprehensive
account of how to understand Five Mys
customers or consumers as the My motivation,
real living, breathing, complex my attention, my
connection and my
human beings that they are. trade-offs between
time and money
The holistic view of me as a
customer can be gathered by
understanding three key
dimensions to know
me better. Life stage
Where I am in my
life stage journey
Source: GMC
Me, my life, my wallet
The multidimensional customer Customer centricity Chasing customers

The multidimensional customer 03–05 The Customer-centric ecosystem 40–42 across the world
Understanding the customer in full context
A holistic look at consumer behavior
United States: A brave new world 60–64
Industry view 43 The ubiquity of the tech platform
Paying attention to the
right signals 11–12 The customer through the sector lenses
A closer look at the signals of change

United Kingdom:
Data becomes king 44–46 The connected consumer 65–70
Combining data to know the customer The rise of the digital nation
STEP events 13–14
The events that shape who we are
Curated by me, for me 47–49 India: Leapfrogging towards
digital economy 71–76
Embracing the era of personalization
Understanding the Five Mys 15–23 A ‘continent’ in the ascendancy
Deciphering the complexity of human decision making
The empowered patient 50–52
Putting healthcare in the hands of the patient The eastern boomer effect 77–78
The Five Mys profiles 24–27 Reverse mentoring across the generations
A multifaceted view of the consumer
In search of
a simplified financial life 53–56 China: window into the future 79–83
Taking the pain out of financial experiences A consumer empire on the verge of
going global
Me,
Reorienting around
the person, not the risk 57–59 One app to rule them all? 84–85
The technology revolution in insurance WeChat: the platform behemoth
my life,
The perfect storm
The perfect storm 86–89
Experiencing the age of disruption
Customer wallet
my wallet
Customer wallet 28–31
The fight for a share of the wallet
Generational surfing 32–37

Predicting the trends before they break
Life event drifts 38–39

Life event shift across the generations
Highlights
A glimpse into the technologically
powered world of today through
consumers’ own words, sentiment
Checking our phones is the first thing we
do in the morning
and actions — and a preview of

the research themes and insights
explored throughout this report. First thing I do in the
morning is check my
Me, My Life, My Wallet draws on an in-depth body of research, notifications, so that’d be
combining trends analysis of social, technological, economic from Facebook, Instagram,
and geopolitical data; ethnographic interviews with consumers WhatsApp, or iMessage.
on four continents; and a proprietary quantitative survey of
consumers in China, India, the UK and the US. Consider this
Texts first and then move
small preview of the detailed insights explored over the course to social media.
of this report and ask yourself: Do I really know my customer as Avantika, 25, millennial
well as I think I do, or as well as I should? Pastry chef, Mumbai, India
While greater anxiety is associated with losing one’s wallet globally,

the connectivity of people in China swings the balance the other way
Percentage who would rather lose phone China India UK US
Percentage who would rather lose wallet
29% 57% 61% 74%
To [lose] my
phone...I would
feel anxiety. 71% 43% 39% 26%
Nomophobia.
Zi, 28, millennial
Curator, Taiyuan
© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
>1 in 4 88%
of people in China use WeChat or
Alipay to purchase goods or services
millennials glance at their phone screen

at least once every five minutes without
83%
being prompted by a notification
First thing I do in First thing I read in of millennials in China open

the morning is the morning are their phone or mobile device to
relieve boredom
check TimeHop WeChat, Facebook
on Facebook to and Instagram The US has the highest percentage of technology
laggard boomers, and China has the lowest
see what to catch up
happened before with friends.
in my life. Stay in touch. China boomer
9%
Emma, 34, millennial Annie, 23, millennial
Life coach, Norfolk, US Student, Hebei, China India boomer
22%
UK boomer
24%
My phone is my alarm
clock, so the first thing I do US boomer
in the morning is check what 26%
notifications I got. If I posted

an Instagram before I went to
I use WeChat every minute, every
bed, I want to check if I have a hour to chat with friends, family,
lot of likes in the morning. brands and get my news.
Kelly, 30, millennial Helen, 52, boomer
Marketing, New York, US Teacher, Guangzhou, China
Trust in platforms and devices used regularly
US
79%
use platforms*
22%
have complete trust in platforms
19%
use a smartwatch regularly
54%
use a tablet regularly
UK
73%
use platforms*
28%
71%
use their laptop regularly
60%
use a tablet regularly
China
91%
use platforms*
64%
21%
use a smartwatch regularly
48%
use a portable battery regularly
India
88%
use platforms*
28%
14%
use a feature regularly
38%
use a mobile website
hotspot regularly
* Adoption rate for the highest used platform
Payment methods used
US UK China India
72% 90% 72% 88% 38% 60% 34%
use credit cards use debit cards use PayPal use WeChat use bank’s use Paytm use Bank’s mobile app
or Alipay mobile app
Frequency of using mobile device to pay for goods and services
Total US UK China India
48%
41% 41%
I would do online grocery
38% shopping like they have
in England, but it doesn’t
33%
exist in America.
Emma, 34, millennial
31% Life coach, Norfolk, US
28%
27%
26%
25%
20% 20%
15% 15%
14%
13%
12%
8%
7%
6% 6%
5%
4% 4%
3%
2% 2% 2% 2% 2%
Less than once a month 1–5 times per month 6–20 times per month 21–50 times per month More than 50 times Never
per month
Percentages rounded to nearest whole number
Paying attention
to the right signals
Making sense of signals of change is critical
to keeping up with changing customers.
A
round the world, Short-wave signals Take Lily, a married Gen Xer from
from sector to sector, Shanghai with two children. For the
companies are locked Short-wave signals emanate from micro last ten years, she and her family have
in a battle for growth. events and extracts of information taken a week-long summer vacation
Facing intensifying that tell the complex story of our lives at the same Ritz-Carlton hotel in Hong
competition, many are struggling to as consumers. They include with Kong’s West Kowloon district, at the
understand the wide variety of trade- whom we connect and follow and our same time of year. This year, however,
offs customers are willing to make and social media likes and interactions; the Lily changed jobs and now works
the forces impacting their decisions. information and media we consume; remotely. Instead of her traditional
And for many, the past is no longer a where we go, when and how we get vacation, she invested in renovating
reliable indicator of future behavior. there; what we buy, when and where a new home office. Does the hotel
A variety of macro- and we buy it, whether online or offline; and assume that Lily, a loyal Ritz-Carlton
microdemographic and economic where we have it shipped, how often customer for years, has switched to
shifts, along with accelerated mass we reorder it and how we pay. another brand? Or that the family’s
adoption of new technologies, are The vast data trails emerging from holiday needs have changed? Purchase
having multifaceted impacts on our deepening relationships with behavior alone doesn’t reveal that the
consumer behavior. These shifts are technology and the pervasiveness of travel share of Lily’s wallet has been
signals of change, and they can be our devices provide contextual data reallocated to a completely different
detected in two forms — short wave or clues on almost all facets of our category: home improvement.
and long wave. lives. This short-wave data reveals
what we did, but it doesn’t explain our
underlying motivations or divulge the Finding the right ways to mine
“why” behind our decisions. Making and analyze these signals will
decisions based on this data likely help companies better predict
assumes the future looks like the past. their customers’ changing needs
and expectations.
Colleen Drummond
Partner in Charge,
Innovation Labs at KPMG Ignition,
KPMG in the US
Long-wave signals Consider Steve and Jane, two Short- and long-wave signals
boomer parents. They married combined
Long-wave signals are external, macro early, secured blue-chip jobs,
events that impact our experience, bought a house and had two Short- and long-wave signals are
influence our values and behavior and children. They invested and each important, but the real power
provide context for what motivates lived through the highs and lies in putting them together to
and drives us. They influence how subsequent lows of the dot-com understand the macro and the micro
we connect to each other and the bubble and bust. After 9/11, in context. Finding the right ways
world around us and where we focus they purchased a bigger house to mine and analyze these signals
our time and attention. Long-wave to secure a tangible place in will help companies better predict
signals emerge over time, in the form an uncertain world. When the their customers’ changing needs and
of demographic shifts and STEP 2008 financial crisis hit, they expectations, and what’s more, the
(social, technological, economic and sold their stocks. Real estate forces that influence when, where,
market, political and regulatory) events values plummeted, pushing how, and why we open and close
experienced by each generation. their new home into negative our wallets.
In isolation, long-wave signals can equity. Steve lost his blue-chip
appear too removed to detect a direct job as the prolonged downturn
impact on a customer purchase or continued, and their equity is
behavior. However, for companies tied up in a house that’s become
paying attention to them, these signals a burden. The value of their
help get to the “why” behind human cash and bonds is limited by
decision making and, importantly, how low interest rates. Now they lack
it’s changing. the ability to fund a looming
retirement. Their life events
have influenced every purchase
choice they have made and the
shape of their wallet in
the future.
STEP events
Social, technological, economic and market, political and regulatory Technology Economic Generation-defining events
factors combine to define our cultures and influence our motivation,
attention, connection, watch and wallet. This visualization reflects
STEP events across four countries, aligned with when those events
influenced key generations in their formative years. Social Political Low High
Influence influence
Boomers 1940–1965 Gen X 1965–1980 Gen X 1965–1980 Millennials 1980–2000
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Great Leap
Personal Creation of special First wireless Two-child policy
Forward policy Alibaba WeChat
computer economic zone telephone
Cold War Mao-ism Telephone The Cult of Mao Great Cultural Color TV Return of established Hosted 2008 established Disneyland
Revolution Population Hong Kong Olympics Shanghai opens
hits 1 billion
China
China
First human
People's Republic of Mao’s One child WWW (internet) Baidu in space Alibaba first
China established death policy Tiananmen Square established Double 11 day
Great firewall
protests goes up Weibo established
First human
China open to travel iPhone launched
on the moon Columbine
and study abroad Iraq invasion
Civil rights Rosa Parks refuses Rise of the MLK march End of the school violence
The web iTunes store established
to move to the back service sector on Washington First Gold Standard
Color TV Amazon Obama elected
of the bus Decline of the moon AIDS epidemic Mobile phone Gulf War
Advertising President Kennedy Roe v. Wade started Netflix Dot-Com
End of landing iPhone
United States
United States
manufacturing assassinated bust Uber established
"golden" age Birth control established
World War 2 sector launched
Facebook
Kennedy elected US sends Counterculture Clinton elected established
as president ground troops Woodstock Personal Streaming, Trump
Economic
to Vietnam Rise of feminism Rachel Carson computer recession 9/11 attack broadband elected
Dot-Com boom Financial
Nationalization launches Green Reagan Tech
9/11 social crisis
Stagflation assassination revolution
Foundation of the Movement Google founded implications
Welfare State Latchkey kids attempt
as search engine G W Bush
Devaluation of Watergate elected BBC iPlayer
End of End of
the pound scandal Labour Party in power launch
World War 2 food rations Sky TV Digital TV
Thatcher launch Princess Diana dies
First motorway BBC Radio UK joins EEC Live Aid University tuition
United Kingdom
United Kingdom
Council houses Financial crisis and Brexit vote
launches (1+2) first elected Privatization Comic Relief Polytechnics fees introduced
Coal shortage credit crunch
Wage rises Glastonbury begins GCSE become
universities
Low unemployment Tax cuts Comprehensive Northern UK

Education Act ITV schooling Ireland riots Housing crash Child tax Independence
Marshall Plan launches credits Party
Leaving school easyJet London bombings
NHS at 16 years old End of IRA Male/female state pension
Indian Recession
age equaled to 65
independence
Compulsory Indian dramas
birth control (soaps) Rise of the First female president
Independence India becomes India Institute of middle class
from Britain a republic Technology (Nehru) Rise of the Indira Gandhi is first Only one Facebook arrives
feminist movement female prime minister Improved Outsourcing
Independence Framing of the TV channel 50 TV
roads to India
movement constitution Liberalization of the rupee until 1980 channels High-speed train Demonetization
India
India
India loses war
with China
Population
War with Pakistan Green > 1 billion
over Kashmir Revolution Arrival of Internet comes
International TV Rise of Orkut
fast food chains to India
Mahatma Gandhi channels added (social network)
assassinated
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Source: Innovation Lab at KPMG Ignition, KPMG in the US Events are representative and not intended to be comprehensive
© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Understanding My My My My
the Five Mys
Understanding the complex underlying drivers
attention
Ways we direct our
attention and focus
connection watch
How we connect to
devices, information and
each other
How we balance the
constraints of time
and how that changes
wallet
How we adjust our
share of wallet across
life events
of human decision making has become
across life events
exponentially more important as the disruption
of the digital age accelerates.
My
motivation
A
Characteristics that
s consumers, our Five Mys drive behavior and
are both interconnected and expectations
constantly changing. If a
company looks at any of these
underlying drivers of our choices in isolation,
or through the lens of a specific industry or
a single life stage alone, they will miss out
on the richer story of customers’ unmet
needs and their trade-offs between time
and money.
70% 41% 30% 48% 77%

Instead we urge companies to understand
the breadth of, and interrelationship between,
these five forces that influence our decisions
and to explore all aspects of customers’ lives,
not just the category you serve.
Our Five Mys framework is designed to help
identify the real drivers of customer behavior, increase, since 1987, of of people feel totally of millennials glance at of professionals in India of UK postgraduates
along with the critical trade-offs among consumer spending on live overwhelmed with their phone screen at are ready to forgo a top will never “pay off”
experiences and events information and avoid least once every five position with a high their student debt
purchase decisions across the breadth of the relative to total US consumer it if they can minutes without prompt salary for flexible working
customer wallet, leading to more targeted spending or a notification arrangements
and contextualized experiences, products and
services that create value for both consumer Source: KPMG global consumer Source: KPMG global consumer Source: “Top Attractors” survey, Source: Institute for Fiscal
Source: U.S. Department of Commerce, Bureau of Economic Analysis survey, 2017 survey, 2017 LinkedIn, 2016 Studies, 2017
and company.
My
motivation
Characteristics that drive
behavior and expectations
Today, our best experiences have given you. But I may be willing to share
become our expectations — we more information if that means you
no longer just compare a company can give me better insights, know my
to its closest competitors but to challenges better and deliver the value I
whomever sets the standard for our need on my terms.
best experience as consumers. We
crave convenience and more intuitive, Value me.
personalized experiences. We value
peer reviews and social reference, and Make me feel like you care about
many people place more confidence keeping my business. Relationships
in individual influencers than in matter, whether the interaction is
companies and institutions. physical or digital. Think about what
For companies, the message from you’re doing that may signal to me that
consumers is simple: you don’t value me.
Make it easy.
Find ways to make it easy for me to

Business Questions to ask
engage with you. Make the tasks I impact
don’t care about easier to execute. » Where are the key expectations
Help me figure out if I’m choosing the Knowing what customers and friction points on the customer
right products and services for my really value in an experience journey?
needs. Remove friction and make my and what’s setting the » How do I obtain insights to
experience with you simple, intuitive benchmark can help understand better the key
and pain-free. drivers of behavior for my most
eliminate wasted efforts
profitable customers?
and focus on the ones that
Know me. » How can customer data already
make a difference. provided be used to create and/or
Show me that you know me as well as enhance a better experience?
the data you already have about me, » How do we get behavioral data to
the preferences I’ve already revealed understand the customer’s whys?
and how I engage with you. Don’t ask Our best experiences have » Where does environmental
me to reenter information I’ve already become our expectations behavior fit?
My
attention
Ways we direct our attention and focus
We’re all subject to unprecedented nothing short of an all-out assault on Questions to ask
volumes of information at our fingertips, our attention.
increasingly available whenever and Consider these statistics: » How do I get my customers’
wherever we want it. This abundance » There is more media created in 60 attention in a way that won’t add to
of information collides with constant seconds than can be consumed in a their information overload?
pressures on our attention. As our time lifetime. » What are the moments that matter
has become more fragmented, we » Of the 205 million emails sent daily most to customers, and how do I
are making fundamental shifts in how around the world, only 30.6 percent build value around these?
we process and filter information and are opened. » How do I maintain value once I have
otherwise divide our days. » Data is growing faster than ever, captured my customers’ attention?
Although our patience thresholds are and by 2020, about 6GB of new » How will advancements in
falling, we continue to make time for information will be created for every machine learning and artificial
the things that matter to us individually. human being on the planet, every intelligence become “personal
Understanding how individual consumers hour of the day. assistants” for customer?
prioritize and marshal their time and
attention is essential to break through the
noise and the chaos and to build deeper,
more meaningful relationships.
Information overload
The sheer volume of information,

communication, content and media
that we’re exposed to every day is
Business
impact
Knowing how to get

customers’ attention can
help target investment at
the moments that matter,
maximizing return
on investment.
cultures, macro and micro trends, and To the more significant aspects such as…
groups that share commonalities.
Understanding the shape and patterns » Booking a vacation
My
of these wide-ranging interactions and » Staying in touch with family
networks is central to understanding and friends
how decisions are influenced, when and » Investing and banking
by whom. The companies that cultivate » Managing health and wellness
connection
How we connect to devices,
such an understanding and how it could
evolve as technology further permeates
our lives will be those best equipped to
engage with customers on their terms.
» Looking for a relationship.
Questions to ask
» How do I help customers get

information and each other Remote control smarter about the way they
engage with my brand?
With the promise of a simpler, » How do I get smarter about
faster, cheaper or better life, we’re customers through their
increasingly offloading our lives to connections?
As technology adoption accelerates, technology. From simple things like… » How can we help the customer
new devices and tools are gaining deal with connection and
more users in less time. While it took » Remembering disconnection anxiety?
13 years for the mobile phone to reach contact » What experiences
25 percent of the US population, it information could be created to
took the iPhone just 2.5 years. » Way-finding connect customers
As a result of our increased and navigating to each other?
connectivity, we are having more to a » How do I apply the
digitally “connected” interactions. new destination same thinking to
Consequently, we’re getting smarter » Managing a my organization
about the world, and the world is calendar and leverage
getting smarter about us, who we are » Consuming technology?
as individuals, about other “people music, photos
like us”, and about communities, and videos
» Ordering and
paying for
goods
Business and services
impact
Getting smarter about

customers through their
connections contextualizes
big data and generates
actionable insights.
Disconnection
anxiety
Where’s your phone?
In your pocket? On your desk?
Are you sure?
E 30%
ven the mere thought of leave their device at home, also found
misplacing your phone can evident among 36 percent, 35 percent
evoke a mix of feelings we and 21 percent of Chinese, US and UK
refer to as (dis)connection consumers, respectively.
anxiety — the paradoxical of all millennials glance at their phone screen On the other hand, some of us feel
feeling of being both disconnected and at least once every five minutes without being irritated and overwhelmed by the
too connected. prompted by a notification prospect of constant connectivity itself
If you’ve ever lost your phone or left — the inability to unplug and switch
it charging at home while you spent the what some call “nomophobia” or no off, the feeling of being trapped by
day at work, you’ve experienced the mobile phobia, a term coined in 2008 pervasive access to our work emails or
rollercoaster of conflicting emotions: by YouGov, an international data and
an initial sense of dread, sometimes analytics group.
followed by the relief of remembering While there is some debate over
where you left your device. Typically whether the feelings meet the clinical I panic when I
accidental and often disconcerting, definition of a phobia, some of us feel truly leave my phone.
there is some solace to be taken in the fearful and anxious about the prospect of I feel handicapped.
realization that you’ll have a day’s respite losing connection to our digitally powered
from your always-on life. lives. According to our survey, 42 percent
Anchint, 27, millennial
Mobile devices have enabled of Indian consumers told us that they Airbnb employee,
ubiquitous connectivity, giving rise to feel a strong sense of anxiety when they Calcutta, India
Disconnection
anxiety
the unspoken social pressure to respond Anxiety over losing phone versus wallet
immediately to a WhatsApp message
because we know the sender can see While greater anxiety is associated with losing one’s wallet globally, the
the read receipt, indicating we’ve seen it. connectivity of people in China swings the balance the other way
Having our phones with us not only
provides a sense of comfort and basic Percentage who would rather lose phone Percentage who would rather lose wallet
security, but it’s also the tool that many China India UK US
of us have to use to help manage our
lives because we’ve offloaded so many
critical tasks. When that’s suddenly
removed, we sometimes feel helpless
and desperate. In our survey, for 29% 57% 61% 74%
instance, 71 percent of respondents in
China said they’d rather lose their wallet
than their phone.
So if the thought of being separated
from your phone freaks you out, you’re 71% 43% 39% 26%
not alone. But as one of our survey
respondents noted: “I accidentally and
unintentionally leave my phone at home
sometimes. You were born without a
smartphone, so it’s OK.”
My
watch
How we balance the constraints of time
and how that changes across life events
How much time we have, or think Questions to ask these pockets as part of my
we have, influences how we interact segmentation strategy?
with other people, services and » How do I reduce the time and » For the customer who places
companies. We’re increasingly using effort it takes for my customers to a premium on time, what are
technology to automate or accelerate purchase or engage with me? the opportunities to deliver a
tasks throughout our lives, whether » How do we discover the pockets differentiated experience?
with recurring grocery and household before pivotal life events? » What are the ways to demonstrate
orders or the use of algorithms to » How do I start to build in value with my customers early
help guide us on what to purchase, in their experience with me and
watch or listen to next. throughout the journey?
By understanding the impact of life » How do I apply the same thinking
events and the trade-offs of time and across my organization and make it
money, companies can engage with Business easier for my teams to connect with
consumers at the time of greatest impact my customers?
impact, identifying and addressing » How can I help them prepare for
unmet needs. Identifying the pockets life events?
before life events yields
new opportunities to
build customer loyalty
and stickiness.
My
wallet
How we adjust our share
of wallet across life events
Often in a symbiotic relationship with » How do I identify how my customers

time, the shape of our wallet changes are spending and sharing their wallet?
according to major life events. How » How do we get to people who will
much money we have, how we earn more in the future?
choose to allocate it and our attitude » For the customer who places
towards it shifts based on myriad a premium on quality, what are
factors, not just our salary or age. the opportunities to deliver a
Understanding the relationship differentiated experience?
between income, consumption and » What are the ways to build trust with
spend mix, and how this changes for customers early in the experience or
different generations, viewed through journey to gain a share of their wallet?
the lens of life events, provides a level
of intelligence beyond that offered by
traditional demographic models.
How the new customer wallet is Business
changed by our motivation, attention impact
and connection will drive the next
generation of business models and Understanding the
determine the companies that thrive
trade-offs customers
in the race for the evolving customer.
make between time and
money can identify the
Questions to ask
best future customers
» How can I help customers manage and expectations.
their wallet and budget?
On paper, Shikha and Aanchal are time researching honest and authentic While a smartphone user active on
one and the same. Both are female products, brands and experiences. many of the same apps as Shikha,
The Five Mys profiles

millennials around the same age. She proactively harnesses technology Aanchal places greater value on
Both are single, living in first-tier to ensure she doesn’t miss a beat her time offline, viewing reading
cities in India. And both are earning across her social networks, viewing her akin to meditation and welcoming
a comparable wage in skilled, device as the primary connection to her disconnection from technology. She
professional roles. But a deeper look friends, family and memories. Social places greater priority on travel and
at their Five Mys reveals very different activities are the priority for her time new experiences, and this drives
For years, marketers have touted demographic segmentation for targeting drivers resulting in very different and money, seeing her sacrificing travel her allocation of time and money
customers. Looking at demographics alone, however, risks missing the multifaceted patterns of behavior. convenience for small savings that can — sacrificing the convenience and
way in which people make decisions. Shikha is fundamentally driven by be reallocated to dining out. flexibility of dining out or ordering take
social connection. She values organic In contrast, Aanchal’s primary driver out in order to reallocate her spend to
produce and provenance, investing is the diversity of her life experiences. her core motivation.
Millennial comparison: India
Shikha, 32, millennial

Editor at men’s magazine,
My motivation Aanchal, 31, millennial
Data analyst,
My motivation
“Everything organic. I will research for Bangalore, India “I’m always driven to try new
Mumbai, India
hours to make sure what I’m buying, eating things. I’ve lived abroad and
Single Single
or experiencing is honest and authentic.” been exposed to many new
experiences.”
My connection My attention My connection My attention

“Being without my phone “I glance at my phone constantly “I welcome disconnection. “I try to follow headlines
gives me anxiety! I would with notifications. I get alerts I read spiritual books these but wouldn’t spend hours
lose connection to people for everything happening in my days and wouldn’t mind reading on the net. I
I love and all my photos.” social network and news. I want having an uninterrupted prefer to read fiction —
to be the first to know.” day of peace without my it’s meditation for me.”
13 %
more Indian
millennials report
being without their
phone, WhatsApp and
Facebook.”
51
phone is greater of Millennials in
cause of anxiety than India report being
witnessing a crime % interrupted by their
primary device at
least once every 10
minutes
My wallet
“I have started taking
uberPOOL to save money. It
21 %
only of Indian
My watch
“Spending time going out to
dinner and drinks with friends
My wallet
“In order to save money, 17 %
My watch
“I believe time spent traveling 13 %
takes longer to get places, but millennials would cut is what keeps me happy. My I learned how to cook. of Indian millennials is the most important thing I of Indian millennials’
I have more money to spend dining out/take out social life is my status and my It takes longer, but it’s a would cut travel/ can do. Spending time on new budget is allocated
going out with a small trade- if their budget was everything.” trade-off that affords me vacations if their budget experiences with loved ones is to leisure and
off of my time.” reduced by 10% more budget to do what’s was reduced by 10% critical to my happiness, my life.” entertainment
important to me.”
Armed with this level of behavioral, contextual insights, These stark differences are by no passion, is the life event we call of illness. He’s part of the minority of An active user of technology and
companies can anticipate the patterns of consumption means limited to younger generations. FROOM (Fear of Running Out Of UK boomers who shun social networks social media, he’s adopted behaviors
and spending that make up these individuals’ wallets Tom and Bob are both married Money). Part of a generation that’s and online platforms, generally avoiding from his grandchildren to enhance
with far greater precision — and get to know the person boomers of a similar age. Both are living longer than their retirement both the cost and complexity of new his connection to them. He’s keen
behind the demographics. retired, and both are living in large cities incomes were intended to support, technologies. Consequently, he has a to ensure his time and money are
of a similar economic profile in the he’s keeping a sharp eye on his pension virtually nonexistent digital footprint. allocated to family and values making a
North of England. income, all too aware of the potential In contrast, Bob’s focus is family, difference to them more than investing
The primary driving force influencing impact of medical and care costs, with and this has a profound impact on his in experiences or products and services
Tom’s wallet, beyond his football a spouse going through a recent period behavior, his choices and his wallet. for his own enjoyment.
Boomer comparison: UK
Tom, 68, boomer

Manchester, UK
My motivation Bob, 73, boomer
Retired electrician, Liverpool, UK
My motivation
Retired, “I am a lifelong fan of Manchester Married “I like to think of myself as a
Married
City Football Club. I schedule my caring person. I want to take
life around matches.” care of my family, and now in
retirement, I can do more of
that.”
My connection My attention My connection My attention

“I still use my paper “I am just me. I don’t have “My grandkids taught me “I have been
calendar to schedule any presence online that how to use Facebook and volunteering at the
appointments. And I use my I know of. And nothing FaceTime. I’m always on local hospice.
home phone. I don’t have interrupts me except my iPad now.” I learned from
time to learn a new iPhone salesmen at my door.” the patients how
that changes every year.” important it is to
be present.”
4
of boomers in the UK
77 59
of boomers in the UK report that they are not of boomers in the
report that they would % on any online platforms UK report that they
% prefer to lose their phone % use Facebook
over losing their wallet
Boomers in the UK
My wallet Boomers in the UK report that
My watch My wallet report that only
My watch
“I am worried about
outliving my pension.
Now that I’m retired, I
82 %
of their wallet goes
“My wife has been sick, so I’ve
spent more time taking care of
her lately.”
“With the holidays
coming up, I want to
make it extra special for 7 %
“The only thing I’m afraid of
is missing out on time with
my grandkids.”
have more time than toward necessities (vs. luxuries) my family.” of their wallet
income.” goes toward savings and
investments (next
generation’s inheritance)
Customer
wallet
Many organizations still prescribe to the dated
belief that their primary competition is a rival
of millennials identify
their parents as a
source of income
In India, the figure

is as high as
35%
company in the same industry — but their only
true competitor is the customer wallet.
W
e’re all subject premium on-demand and delivery
I pay $30 a class for those workout classes
to finite income services that bring speed, ease and
(Soul Cycle and so on), which is a pretty
flows and certain big guilty pleasure. I know it’s insane to convenience to shopping and meal
unavoidable fixed pay that much for a spin class. I know that times. These responses appear to
costs that must money is way better spent elsewhere, but be directly at odds with their cost-
I’m totally caught up in the cult-like ways. It
factor into calculating our available saving behaviors.
was very smart of them to attach spending
spend. But regardless of income a lot of dollars to the endorphins and luxury
and demographics, all consumers treatment you get from a fancy workout
I get a subscription box of snacks and
present contradictions between their class. It’s the best feeling when you leave one
makeup each month and I spend a lot more
of those classes, like a high that you think can
rhetoric and actions. They stress the only be achieved by paying another $30. Also,
money on it too.
importance of budgeting but then since it is a workout, it ties into insecurities of Avani, 37, Gen X
show a willingness to forgo value in trying to lose weight and be fit, so you think Entrepreneur, Delhi, India
the only way to get what you want in life is by
favor of convenience, for example, or
paying that much.
self-improvement. This is where we see
Brittany, 25, millennial
interplays between watch and wallet Event planner, Miami, US
And as humans are complicated
and motivation and wallet. creatures, you can’t account for
For example, consumers in our study simple impulse spending and
emphasized how much of their time rationalization around it.
outside work was devoted to self- In terms of watch and wallet, we
improvement. As our “leisure upgrade” found these trade-offs especially
I bought myself tickets to Vietnam recently,
trend states, consumers want the time evident in our respondents with but the prices have fallen a lot, and then
spent on leisure activities to yield more young families. For them, their I bought myself an iPhone 6, but it was a
than just simple enjoyment; they want family is one of the primary drivers pretty stupid move because the iPhone 7 is
out soon, so, yes.
to learn new skills or improve their behind a budget for groceries and
Jia, 25, millennial
health. These goals may prevail over other necessities. However, the
Travel blogger, Delhi, India
the spend mix of their wallet. family also drives a desire to pay for
Share of wallet by generation
Household spend dominates the wallet but increases as a proportion with age
Millennials (1980–2000) Gen X (1965–1980) Baby boomers (1940–1965)
Household 33%
Leisure and entertainment
37%
Health and well-being
Savings and investments
43% 15%
14%
12% Loans and debt
Transportation
11%
15%
8%
12%
11%
10% 7% Other
9%
12% 6%
11% 11%
9%
8%
6%
Source: Innovation Lab at KPMG Ignition, KPMG in the US
The customer wallet

We have researched changing customer demographics and resulting
New customer value chain/changing channels
Share of wallet
Luxuries Necessities
impacts on income and spend, including how people are spending money, Baby boomers (1940–1965)
New ways to explore, buy and receive products and services
what they are doing with their money and how they are changing what they
spend and where — including the new customer value chain and channels. 8 0%
%
20
Explore Plan Purchase
How we discover How we compare options The buying process and
a need for certain and make trade-offs and experience
products and services decisions »
» » » Frictionless
Income Consumption Spend mix » Inspiration » Influencers experience
» Information » Aggregators and including in store
» Personalization curators » Unlimited channel
» Tools to plan and options
manage » Automated and
Net debt service Housing consumer lock-in
Gen X (1965–1980)
Consumer loans Home improvement

73 %
Student loans Food and beverage
27%
Mortgage debt Driving Products Receive Engage
and services
Transportation/Auto The products and The way products and How relationships we build
services to meet our services are delivered with brands and providers
new needs to us influence decisions
» » »
Income Power and utilities » Customer- » On-demand » Social and brands
centric value delivery that tell a story
props » Flexible pick-up » Customer service
Telecoms and media » Bundling of » Flipped store » Instant
products and model gratification and
services (DIFM) loyalty
Savings » Personalization Millennials (1980–2000))
Insurance and convenience
Wealth management Increased expectations: Frictionless experiences, know me better, bring me value 71%
Healthcare
Taxes
Pharmaceuticals
29%
Home/Personal care Payments
Clothing Loyalty programs
College and education Delivery
Leisure Platform business models
Pets Source: Innovation Lab at KPMG Ignition, KPMG in the US

Generational
s rfi With extending life stages,
drifting life events and new life
events emerging, riding the
waves between generations isn’t
as predictable as it once was
S
urfers watch ocean generational surfing, whether this
patterns so they means adapting to a customer’s
can time and catch needs as they move from one life
the big waves. The stage to another or serving one life
best ones are shaped like arcs, stage and catching the wave of each
and experienced surfers look new generation entering it.
for the pocket that precedes the
breakpoint. As the top of the wave Shifting life stages
begins to fall, the ideal spot to catch
a new ride emerges. Across generations, companies
When the wave you’re riding have relied on assumptions about
begins to peter out, you face three life stages, using age as a proxy,
possibilities: time it right and to identify when and how people
catch the next wave; time it wrong will be in the market for certain
and crash out; or ride firm where products and services.
you are, with the inevitable fade Moving away from home.
into obscurity. Graduating from college. Getting
It’s a similar story for companies. your first car. Getting your first
The big waves are their customers’ job. Buying a home. Getting
life stages, including young married. Having a child. Retiring.
adulthood, young parenthood, For years, such events have
empty nesting and retirement. The provided clues to the likely shape
companies that understand these of the customer wallet.
stages and look for patterns of However, while certain life stages
change will be primed to succeed at may be enduring, the way different
generations approach and move and liberation. Notwithstanding the

through them is showing signs of differences between individuals in
change. As our survey across China, rural and urban locations, you could
India, the UK and the United States predict it would happen between
revealed, more than two-thirds the ages of 15 and 18, depending on
of millennial respondents had yet country driving laws.
to purchase their first home. As a You could predict the increased cost
consequence, companies’ assumptions of insurance and the financial support
about this generation may be off by needed to buy a car. You could predict
several years. how driving and transport patterns
Meanwhile, new stages are would change in given parts of the
emerging. Baby boomers are country. You could anticipate how the
redefining their next life stage relative newly qualified driver’s spend mix
to their predecessors. Many are facing would evolve, as they suddenly had to
unfunded retirement, increased life factor in the cost of fuel while, at the
expectancy, rising healthcare costs and same time, their new-found freedom
the potential need to provide extended presented new opportunities to do
financial support for their millennial more and go further, changing the
children and possibly their parents as trade-offs they’d have to consider
well. As a result, what should have between time and money.
been their peak spending years have The reasons behind this shift are
been disrupted, leaving them facing a many and varied. Some are simple
new set of challenges. practicalities that have changed their
“mys” — motivation and connection.
Moments that punctuate lives Being able to drive used to be a
way to connect with friends. But
It’s not just life stages that are now teens connect via their devices
important determinants of customer and don’t have the same need to
needs and behavior, but life events — get together. What’s more, they’re
the watershed moments that punctuate growing up in a world of car-sharing,
our lives and create new pressures mobility for hire and the convenience
on our wallets. Yet like life stages, of on-demand transport through the
life events no longer follow the same likes of China’s Didi, India’s Ola or
pattern, sequence and timing as in the Western equivalents Uber and Lyft,
past. so they may not need to own or drive
Consider two examples where we’re a car at all.
already seeing evidence of these shifts: Looking at the customer wallet in
the context of this shift also serves
Teens are increasingly putting off to demonstrate the ripple effects of
traditional markers of adulthood – change, from driving lessons, insurance
Twenty years ago, getting a driver’s or car loans to needing to cope with the
license was considered a pivotal impact of fluctuating oil values on the
moment on the journey to adulthood price at the pump.
The trade-off between time and money between generations
Student Single Married/ Kids Empty Retirement

Cohabitating nest
Salary increase + Prime saving years Retirement

spending increase income
Prime spending
Part-time job Starting years
(work-study) salaries
Money
Tension 0 1 2 3 4 5
Time
Not much
free time
More free time Some free time More free time

Lots of Lots of
free time free time
Buying a home for the first time In the UK, more than half of graduates
– Home buying is another life event live with parents to pay off debts, while
where previous age assumptions are globally, according to our survey, the
fast becoming invalid. Companies proportion of millennials living with
traditionally targeting this life parents has surged to 38 percent,
event, from mortgage providers to reaching as high as 68 percent in India.
insurers and the home improvement If companies can become adept
sector, will ultimately experience at spotting and responding to these
the economic impacts of delayed “drifts” in life events, they’ll be better
household formation, which has a able to position new propositions and
domino effect across the wallet. Will experiences with greater precision,
millennials spend more on leisure, opening the opportunity to move
travel or entertainment while free from ahead of the competitive pack.
the responsibility of home ownership?
Or will they double down on loan New life events
repayment and savings to get a
mortgage as quickly as possible? At the same time, new life events are
And what about their parents’ emerging, each bringing new forces on
wallets? To make serious inroads our wallets. Consider three examples
on student debt or saving for home that have become increasingly
ownership, growing numbers of important for younger generations:
millennials are returning to live with
their boomer parents and for longer, if My first smartphone – Arguably more
they ever moved out at all. important than getting a first car, a
with no fixed repayment period and their main reason for working past
the prospect (for many) of living for 65. Compounding the situation,
decades with this debt. In the US 60 percent of US households have
alone, student debt has grown to more no money in a 401(k) or similar
than $1.3 trillion, an increase of over retirement account, while in the UK,
80 percent since the Great Recession the state pension age is being raised
of 2008. And the implications can be from 65 for men and 60 for women
far reaching. While education costs to 68 for both by 2039, presenting
have always been a factor in life, the UK retirees with the prospect of
sheer scale of modern student debt several unplanned years of unfunded
has made paying off a student loan a retirement income. In contrast, 36
major event in its own right. Behaviors percent of US retirees worked past 65
are altered and a new window of mainly because they enjoy their jobs
opportunity is opened for credit or want to stay involved, while in India
card companies, banks and retailers 66 percent are opting to continue
to engage a receptive and newly working in some capacity to keep
financially liberated audience. active and engaged.
The implications for the wallet are
significant, with impacts on traditional
Delayed assumptions about the products
gratification and services, either for purchasing
or investing, appropriate for older
smartphone has gone from functioning Our analysis found studies in multiple markets members of our populations.
as a device to becoming a wallet, pointing to significant numbers of millennials
thereby driving convergence across delaying marriage, the decision to start Thinking differently about patterns
the Five Mys. It’s become the key to a family or a house purchase as a direct of consumers’ lives
their attention, and their connection to consequence of the burden of student debt. In
friends, family and the world around India, for instance, the median age of marriage Life stages and life events undoubtedly
them. The freedom and diversity of has increased by approximately three years for remain a powerful way of understanding
opportunity provided by a smartphone men and four years for women over the course customer context and predicting needs,
makes its influence on the customer of the last three government censuses. In the aspirations and, ultimately, behavior. But
wallet nothing short of profound. UK, 43 percent of students say student debt relying on assumptions from the past is
has delayed their decision to start a family. not enough.
Free of student debt – Indian And in China, the share of unmarried women For companies, this evolution
millennials are entering young between the ages of 25 and 29 has quadrupled means anchoring everything you
adulthood already carrying a significant since 1980, reaching 22 percent by 2014. do to your customers and looking
debt burden, due to the requirement afresh at their motivation, attention,
for college loan EMIs (equated connection, watch and wallet to
monthly installments) to be paid off anticipate their needs, behaviors,
the moment graduates take their first Unretirement – Almost 20 percent trade-offs and choices as they
job. In contrast, UK and US students of Americans aged 65 and older move from one life stage, or wave,
can accumulate alarming loan debts remain employed, with three in five to another. That’s the essence of
as they progress through university, retirees citing financial problems as generational surfing.
B
ehavior transfers between millennials and
their baby-boomer parents are happening
Western
more rapidly than in the past. Technological
improvements and economic realities have
entwined two of the largest generations in
Western history and, as a result, are accelerating the rate of
technology adoption.
baby-
Technology is enabling closer connections between these
two generations. Some 30 to 40 years ago, when boomers
were in college, making contact with their silent-generation
parents typically involved a short phone call on a rotary
phone, down the hall from their dorm room, with a line of
boomer
people behind them waiting for their turn. With few brief
communications, less information was exchanged. And
when they graduated, fewer of them came back to live at
home than we see today.
e ho e e t
Millennials are influencing
their baby-boomer parents
— and boomer parents
are influencing their
millennial children
The way I learn is

from my daughter,
Technology adoption lag in son and friends.
the boomer generation Connie, 64, boomer
Grandmother, Napa, California, US
China India
UK US Fast forward to the present, shared the wonders of Amazon Prime

and millennials and their boomer and Prime Now with their boomer
Millennials living
parents can be in near-constant parents, showing them how to get the
with parents
contact, able to communicate necessities delivered and save them a
68% anytime and anywhere via text, trip to the store.
WhatsApp, Facebook and a host of The reverse is also true. As
other channels. millennials face financial and other
In addition, according to Pew important adult decisions for the
Research Center in 2016, student first time, boomer parents are
loan debt and underemployment often trusted influencers. Where
are resulting in nearly one-third should I open a bank account?
34% of millennials living at home with What insurance do I need? Which
their boomer parents. As a result, insurance companies would you
24% 25% millennials are bringing their parents recommend? What’s a 401(k)? What
along on the technological wave. should I look for in a car? How do I
It comes naturally from simple get the best deal?
interactions: “Hey Mom and Dad, Understanding the baby-boomer
have you used Uber?” “What’s that?” echo effect is key in reaching both
“Here, let me show you, it’s super easy generations. On one hand, it can help
and really useful.” “Wow that looks companies reach both millennials and
Boomer interesting, I’ll give it a try.” “Here, give their boomer parents as influencers
laggards
me your phone and I’ll download it and of each other. On the other, it also
set up an account for you.” means taking a more nuanced look
In all geographies, boomer
Millennials living at home can have at both generations. The boomers’
laggards is less than might
strong views about technology, age demographic would traditionally
be expected, given traditional
technology adoption curves. media and telecoms, and introduce indicate they are late adopters of the
their parents to new media apps and latest tech trends and unlikely to be
devices, such as Apple TV, Roku, large consumers of those channels.
Chromecast, Netflix, Amazon Prime With the baby-boomer echo
9%
Instant Video and Hulu. effect, we’re seeing boomers adopt
Changes in purchasing behavior can technology at a higher rate, upending
even go further than just what content assumptions about their behaviors
22% the family consumes. Millennials have and expectations.
24%
26%
O
ur research shows how of childcare for their young children, On average, millennials are
10 years
traditional life events in addition to elder care for aging
play out differently parents. The layover is the period of
over generations. time millennials wait before beginning
Life event drifts

This life event drift the next traditional life stage.
demonstrates both how new life Baby boomers, on the other hand,
events and stages emerge. are the first generation to retire on older than boomers when they
Businesses have built their operating defined contribution plans and with have their first child
model based on life event norms, increasing life expectancy creating
and those are primarily based on the something we call FROOM (Fear of On average, millenials are
boomer generation that created the Running Out Of Money).
10 years
mold. We started to see with Gen Milestones are being added and
Life events used to follow a predictable script, but modern X an aberration of young adulthood disappearing. Where once your first
generations are improvising, forcing businesses to adapt and stretching out due to social changes car was a milestone that provided
embrace the opportunities these new life stages create. and economic conditions, including a connection to the world, it is no
student loan debt. This has been longer one that millennials or Gen older than boomers when they
amplified in the millennial generation. Z value. This raises the question,
buy their first home
Gen X has also been saddled with will the smartphone ultimately
the burden of double day care where replace the car, particularly in urban
they are caught covering the costs environments?
Average age
20 30 40 50 60 70 80 90
Boomers
Childhood Young adult Young family Mature family Empty nesters Retirement
HS College First First child

graduation graduation Marriage child in college Retire
Birth First job First house All children Last child

purchase graduate leaves home
Teenagers Yuppies college Froomers
Gen X
HS College First First child All children

graduation graduation Marriage child in college graduate college Retire
Birth First job First house Last child

purchase leaves home
Teenagers Slackers Double day care
Millennials
HS College First house First child

Birth graduation graduation First job Marriage purchase in college Retire
First All children Last child

child graduate college leaves home
Tweens Teenagers The layover
Source: Innovation Lab at KPMG Ignition, KPMG in the US Future events are forecast based on synthesis of relevant demographic prediction models
my life and my
ensions of walle
Dim t
Customer-centric Work
Communication
Transport
ecosystem: ym
otivatio
n
Mind
from push to pull to predict M

y at tention Personal
media
wallet
“Get closer than ever to your customers. So close My
that you tell them what they need well before they Slice of
realize it themselves.” — Steve Jobs the wallet
Customer
U
nderstanding customers and get smarter at buyers to “pulling”
Home
consumers’ lives. extracting insights from it, they customers into new
Traditionally companies can assemble those insights to ways of experiencing M y w at ch
focused primarily on form a more precise, often real- a personalized offering. Body
M n
their own slice of their consumers’ time understanding of what their Now the challenge and y co
n n e c t io
lives and wallets — what their customers want. opportunity is to predict where the
customers bought through point Both Apple and Google, for customer is going next, so they can
of sale, loyalty programs and example, are leveraging the new get there first.
promotions — and used that technologies in smartphones to To do that, companies need to
information to improve campaigns understand the context of their understand: Shopping News and
and engagement. customers’ lives — the when » Customers’ Five Mys — entertainment
Today opportunities are arising to and where of their behavior and motivation, attention, connection,
make sense of insights around the purchases. Facebook seeks to watch, wallet — and how they Finances
broader aspects of customers’ lives understand their customers’ social work together
— where they go and when, what graphs — who is connected to » Customers’ context — their lives,
they buy, what they look at or “like”, whom and who recommends what needs and the forces that open and
what they watch and with whom to whom. close their wallets
they are connected. Thus companies have evolved » The ecosystem, not just the
As companies capture an from marketing or “pushing” industry, in which you and your
increasing amount of data on their products they hoped would find customers interact
Customer-centric
ecosystem:
from push to pull to predict
Using the insights differently but also building From push to pull
throughout the organization products differently based on real- to predict
and the ecosystem. time customer insights. From there,
What could putting customers companies can leverage those Push – where we’ve been:
first mean in reality? Like people insights across the organization, a world in which customer focus meant developing
everywhere, companies are facing within the supply chain and and distributing products and services based on
information overload. The challenge is among partners, to create a value the assumed or created needs of broadly defined
in finding ways to use information to exchange with the customer and customer segments
improve customer centricity, but not others in the ecosystem that have a
just to retain or find customers for the shared interest. Pull – where we are:
business as it exists today. Rather, the in an age of digitization, companies are increasingly
goal should be to use information to able to refine and verify their understanding of
evolve the business so it can anticipate what customers want, and then personalize prod-
customer needs and thereby improve ucts, channels and new ways to engage
the experience for all customers over
the long term. This analysis might Predict – where we need to go:
point to products or experiences that an evolving era in which the most advanced
you can only deliver by gathering new companies take steps to understand and analyze a
insights or forming new partnerships sophisticated array of customer information so they
within your ecosystem. can anticipate and meet customers’ needs when, or
The new era is not only about even before, customers know what they want
engaging with customers
Industry view
All around the globe, our survey
This is a very exciting time in the
Time will tell whether a digital
respondents had the same message —
they’re crying out for companies in every healthcare industry. As we have seen in wallet is any more convenient
industry to understand them as people: other industries disrupted by consumers than the real thing. Customers
demanding products and services
complex, evolving and unique. tend to prefer removing the
anytime, anywhere; healthcare is not
T
unique, and we are beginning to really friction in a transaction, with
he better “connected” a experience this consumer-centric seismic
shift. These changes are a reality now
efficient and speedy payment at
company is to its customers’ and are creating significant pressure checkout the Holy Grail. I think
lives and the various on traditional providers of healthcare convergence between financial
services to innovate and transform
ecosystems they inhabit, their enterprise. The organizations services and wearable tech-
the better it can understand that readily embrace this will create a enabled biometrics is inevitable.
its current share of watch and wallet. differentiated brand, gain operational
efficiencies, and build customer loyalty
I imagine a day where simply
And, in concert with insight into their in the markets in which they serve. blinking, tapping my wedding
motivations, attention and connections, Michael Beaty ring or swiping my Fitbit at
companies can begin to develop a US Healthcare Leader, checkout will be all that’s
roadmap to gain greater share of their Patient Access and Revenue Operations
needed to make payments.
customers’ time and money, with an
Jeremy K. Balkin
optimistic view of the future. Consumer and retail Head of Innovation, HSBC Bank US
In the following pages we explore Customers’ behavior and
expectations have changed and in
five sectors, considering the most order to keep up with demands data
noteworthy signals of change, how they driven insights must be utilized at all
levels of the organization The multiplicity of brands in the
could play out, and how companies can
wardrobe, bought from a variety
anticipate and get ahead of disruption.
Media & of channels for various reasons
telecommunications and occasions, is reflective of
Customers are curating their own today’s customer. How to engage
content ecosystems, demanding
The industry is seeing a pace of change more personalized and responsive with them across different
and disruption that we’ve never seen, product and service offerings mediums, providing new reasons
even coming out of the financial crisis.
It is changing in enormous ways. You’re for them to shop across various
Healthcare
going to have consolidation, disruption channels, has become the
and a shakeout in the industry. You’re New digital healthcare options are
going to see the emergence of new challenging the legacy, provider- objective of every fashion brand
players. You can look at it with centric nature of health services and retailer. That is the profound
pessimism, that, ‘Oh, my God, all of change we have seen from
this is changing,’ or optimism, to say Retail banking
perhaps this is the time to rewrite The traditional value chain has been
the distinctly mono-channel,
some of the rules and rebalance the unbundled by a flood of fintech start- brand-loyal and occasion-driven
competitive equation in the industry. I’m ups and out-of-sector entrants, but a
in the latter camp, and I’m looking at the
customer of yore.
rebundling could yet be in the cards
world and saying, ‘Interesting times’.
Bijou Kurien
Indra K. Nooyi Insurance Strategy Board Member,
Chairman and Chief Executive Officer, Simplicity and convenience are L Catterton Asia
PEPSICO starting to take center stage,
rewriting the rules of play
Consumer & Retail
Data becomes king

Technological and demographic
shifts have disrupted the ecosystem
for consumer goods companies and
retailers, with both facing threat and
opportunity in equal measure
R
etailers and consumer changed customer behavior
goods manufacturers and expectations:
are among the most
sophisticated researchers Democratization of
in the world, benefiting from a information –
wealth of data and a long tradition In a world of information
of seeking to understand their abundance, customers can rely
consumers’ motivations and lives. on a wide variety of influences
Whether through focus groups, when making buying
shop-alongs, in-home research decisions.
and diaries or test labs, leading
firms have gone to great lengths Always-on lifestyle – 24/7
to understand what’s important connectivity has created
to a shopper and what really tremendous advances in
drives decisions at the moment of how we live and work, but
purchase. This understanding would getting consumers’ attention
then be translated into meaningful is harder.
product claims, brand messages,
packaging design and advertising Rise of personalization – As
campaigns, which resonated with a technology increasingly reduces
large portion of the population and a market’s cost of entry, a
generated strong sales lift. greater choice of business
models, services and products
The world has changed is now available to customers in
something of an endless virtual
In the last ten years, three key aisle from which to choose.
developments have dramatically
How to respond
Catering to customers in this

world requires a level of granular
understanding that was once
impossible to achieve and, indeed, can
remain difficult. By developing a detailed
understanding of customers’ Five Mys
— motivation, attention, connection,
watch and wallet — at multiple points in
their day and life, companies will have
the foundations to identify how, where
and when to engage them. premium to save time, while others insist
For example, the trade-offs customers on touching a product before buying,
continually make between their time even if it means an extra 45 minutes to
drive, park and walk through a store.
New view on consumer insight

I’m ok with brands
capabilities
taking my data for
market research. Getting to a clear understanding of
I don’t mind being how consumers view these trade-offs
56%
requires new forms of data and research
a guinea pig. to generate the right depth of insight.
Kanika, 25, millennial With more data than ever, insight should
Chef, Mumbai, India
be guided by four key principles:
are “concerned” or “extremely
and their money provide a wealth Customer level – Understanding concerned” about the way companies
handle and use their personal data
of information. While most brands and grouping insights at a segment
understand the relative price position of level is relevant and important, but
their products, very few measure and it’s often most valuable to generate
analyze the time investment required by them at the lowest level of
the customer. What’s more, high-level granularity that can be actioned. In Sharing my data
research techniques rarely capture the other words, if you are able to take with companies
trade-offs any given customer is willing a one-to-one action, you should
to make at any given time. use individual customer insights.
does not bother me.
One customer may stick to a tight And if you are not taking a one-to- What bothers me is
budget for weekly grocery shopping but one action, it is worth considering the number of calls
splurge on a shoe wardrobe. Later, the whether technology and innovation
I get when they get
same customer may buy shoes with could help you do so.
sale discounts so he or she can afford that information.
organic pet food for a new puppy. Some Dynamic – Monitoring and Kanika, 25, millennial
customers are absolutely willing to pay a assessing individual customers’ Chef, Mumbai, India
Trust in buying products online
China
preferences as they change over

time and throughout categories is
critically important. Yet this effort
83%
India
must be balanced with enough

stability for the organization to
78% UK
73%
make decisions.
Multidimensional – With so
many factors that go into purchase
decisions, relying on one core US
76%
attribute in today’s market can be
dangerous. Similarly, assuming that
all consumers who value product
quality also have a certain price
they are willing to pay is a fallacy.
These are dynamic and interrelated and actionable. For instance, while starting with the decisions and levers
decisions. We recommend thinking it’s still valid to ask consumers that can be pulled by your brand, and
of your customers as having an how important time savings are then work backward to the best source
underlying “DNA” of preferences to them, it may be more scalable of data and insight.
rather than simply bucketing them and actionable to measure the Before that, however, companies
into one “need state”. drive time from their home to a must ensure they challenge the thinking
store. New data sets are constantly on the levers that can be pulled.
Scaled – It was once acceptable becoming available to make this Historically, brand marketers may have
to research a representative analysis more achievable. thought, for example, that they could
sample of consumers and use only influence packaging at the shelf. But
it to predict the attitudes of the Putting it into practice with new technologies and innovations,
whole. Still a common technique, many more possibilities are available and
manufacturers and retailers must Often these ideas resonate with brand are often overlooked out of habit.
constantly reexamine if a data set marketers, but the challenge lies in Once you are clear how to action more
is available that would make the acquiring the data and capabilities to granular data, sourcing it among many
same basic insight more granular put them into practice. We recommend options will require some creativity. You
may decide to buy data, partner with a
firm or simply use the extensive public
data now available. The right option will
The customer comes first is one of the depend on your end-execution needs,
oldest clichés in business. But that adage time frame and budget.
Ultimately, an organization’s decision
has taken on a new meaning in the digital makers need to understand and buy into
age. Not only is the customer first, he’s the need for the data and perceive how it
telling you how to run your business. can improve decision making. After that,
incentive changes, new processes and
Willy Kruh
tools and training can help enable your
Global Chair, Consumer & Retail, KPMG International
colleagues to operate in a different way.
Media & Telecommunications
Curated by me,
for me
The battle for attention and a
share of the customer wallet
is intensifying, as consumer
demands and new entrants
change the rules of the game.
News – WeChat
subscription is
powerful and blowing
your mind every
morning. First thing
I check every morning.
Cathy, 28, millennial
Journalist, Chengdu/NY, China
I
t used to be simple. In an era of are catalyzing a potentially seismic
mass production, mass distribution shift in the entertainment landscape. In
and mass advertising, goods and Not that long ago, our media addition, live and on-demand video has
media grew together. When the consumption was attributed become of central importance to social
TV set was introduced, the value to specific occasions, networks such as Facebook, YouTube
proposition was straightforward — buy a centered around a large and Twitter, giving consumers access
TV and get the content free, since it was screen in our lounges — to an explosion of peer-to-peer and
funded largely by advertising. watching the morning news semiprofessional content.
As TV captured more attention, before work, eating a
microwave meal (even
it became the dominant channel Television in our pocket
referred to as “TV dinners”)
for advertising and helped drive the
in front of primetime shows
rise of mass-market industries and With the proliferation of smartphones
or relaxing in front of a
brands. This partnership was mutually Saturday night movie. No globally, each of us carries a personal
beneficial — one needed the other to longer. Our media television within a device that is becoming
reach the customer wallet. consumption has shifted the remote control for increasingly
But the generation that grew up from a screen we converge numerous aspects of our lives.
with the television set is no longer its around at predictable Not only is this constant connectivity
largest addressable market. Millennials moments to a device we impacting consumers’ attention and
are now the dominant consumers of carry around in our pockets their behavior but it’s also generating
content, and they’ve influenced all throughout the day. Media massive amounts of contextual data that
consumers to expect choice. and content are now can be used to personalize interactions
converging around — and with greater precision. Consequently,
fighting to reach — us, and
platform businesses such as Netflix,
I use social media nowhere is the shift in power
Apple, Amazon and Facebook have a
from producer to consumer
way more than more evident than the media distinct advantage over the incumbents
I watch TV. and telecommunications whose understanding of customer
sector. behavior is largely tied to a single screen.
Cathy, 28, millennial
Journalist, Chengdu/NY, China With smartphones serving as a
gateway to a self-curated portfolio of
The resulting demand for greater Timothy J. Zanni content, their disruptive influence has
Global and US Technology
personalization, compounded by the also forced the sector to challenge
Sector Leader, KPMG International
growing influence of social networks legacy definitions of both programs
and platform businesses, has and advertising.
already dramatically reshaped the
media and content landscape, and
MOBILES ARE SMART
change is accelerating.
Traditional cable operators have In its relatively young lifespan, the smartphone has grown at a staggering pace, with China
expanded and diversified their offerings becoming a distant leader. Consider that 87 percent of smartphone users say their device
over recent years, but while the average never leaves their side. And that more than half of millennials check their
cable-connected household now phones at least once every ten minutes, even without being prompted by
receives 206 TV channels, 72 percent a notification or alert. And there are already more than two billion of these
of people regularly watch only 20 or devices active around the world. Its impact on the technology, media and
fewer of them. More than 110 over-the- telecommunications sector cannot be underscored enough.
top (OTT) networks, including Hulu,
HBO Now and Amazon Prime Video,
Technology has become

so embedded in our daily
lives that consumers now
view instant access as the
norm. They are
accustomed to the
immediacy of finding
information or buying
things online, and expect
the same ease and
optionality for their
entertainment choices.
Consumer expectations of
immediacy will continue
Gone are the days when content content at lower cost. But OTT can’t to drive the speed and
largely came in 30-minute episodes or offer everything traditional TV does. nature of the changes we
90-minute movies, or when adverts Not yet, at least. are seeing across the
were a dependable 30-second spot. Instead of buying big, expensive, content ecosystem.
A Snapchat story can be ten seconds predetermined bundles from
long. A YouTube video, two seconds. cable companies, consumers are Paul Wissmann
US National Sector Leader,
Netflix recently created Stranger increasingly opting to “self-bundle” Media & Telecommunications,
Things, an eight-part series made to their favorite OTT options and to follow KPMG in the US
be watched as a single entity. WIRED the people, producers and brands
magazine called it “basically an eight- they value online, creating their own
hour Steven Spielberg movie”. personalized ecosystems. And technology companies are starting
Advertisers and media owners are In response, several cable providers to spend on sports. In 2016, Twitter
grappling with platform, device and have embraced the reality that is invested $10 million for the rights to
channel-hopping consumers and becoming unbundling, providing stream a ten-strong series of NFL games,
are still experimenting to find the consumers the skinny option of cheaper, available to viewers via apps and Xbox
optimal advertising frequency, format more customizable packages. As consoles, with Google and Yahoo! as
and duration for these new content attention continues to shift to digital syndication partners. This year, Amazon
destinations, the latest attempt being devices and OTT consumption, the pay- scooped the same for $50 million.
seven-second spots, each with vastly TV industry is losing a historically high A small number of people who want
different effectiveness and economics. number of subscribers. access to everything right now are
Sports and news content only putting a larger share of their customer
Reaching the wallet available through the traditional TV wallet up for grabs. But value is likely
ecosystem stands as the final defense to motivate a larger section of the
Over the last six years, the cost of to full democratization or, in the eyes of market. And if DIY bundling emerges
pay-TV subscriptions has risen faster consumers, the last barrier to overcome. as the best way to get it, industry
than the average consumer’s monthly However, even this barrier is starting to incumbents will have to make sure
income, while OTT offerings are crumble. News is already widely available that, when the dust settles, they are
serving up more and often better online, via mobile and social channels. on the right side of the trend.
Healthcare
The
empowered
patient
Traditional healthcare systems are built around the
linear, event-driven process of diagnosis and treatment.
Increasingly, customer expectations are for wellness-
focused self-management and empowered decision
making outside this traditional system.
A
surge in health apps, give consumers the immediacy
wearable devices and control they demand, but can
and services such also go some way to alleviating
as daily monitoring pressure on already strained
and self-diagnosis healthcare systems for some of
are providing a growing number the most common conditions
of new digital healthcare options affecting the mind and body.
to patients who crave instant “A truism across many
gratification and on-demand healthcare systems is that
services on their terms. they tend to be designed
In a challenge to the legacy, for the providers and for the
I don’t mind paying
provider-centric nature of health professionals, and not for the extra for organic
services, start-ups around the patients,” says Dr Ed Fitzgerald, groceries and will
world are addressing friction global healthcare executive to
points and unmet needs KPMG’s health practice global
pay extra to preserve
throughout the value chain. chairman. “I think the successful my health.
From advice and consultation providers and systems of the Suman, 59, boomer
to diagnosis, prescriptions to lab future will turn that around, and Professional Homemaker
Mumbai, India
work, these innovations not only start designing healthcare for the
© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 50
51
In the healthcare sector, patient privacy has

always been sacrosanct, but that notion
was formed in a world where sensitive
information was largely confined to
conversations in a doctor’s surgery or
behind drawn curtains on a hospital ward.
Today, the story of our health is played out
across an amalgam of devices, apps,
platforms and companies, and the issue of
privacy is infinitely more complex. It differs
by country, by culture and by generation
— there’s no one size to fit all.
Mark Britnell
Senior Partner and Global Chairman, Healthcare,
KPMG International
patient and the profession, and long-term conditions, a growing actionable insights in wellcare to self-
providers will fit around that.” consideration given the changing management that avoids reentering
While the nature of healthcare demographics of healthcare the health systems. Organizations
systems can vary widely from one provision, technology is beginning to that capitalize on this opportunity will
country to another, they also face some demonstrate its potential. In diabetes, build the model for the healthcare
common challenges. These include heart disease and lung disease, for system of the future.
rising healthcare costs compounded by example, where treatment tends to
a growing population. require material lifestyle changes,
The shift from acute care to chronic patients can access a growing number Ping An Good Doctor
long-term conditions is exacerbated of apps and devices that help them
by an aging population with increased manage their condition outside the In China, more than 2,000 health apps
life expectancy. This has resulted in hospital or general practitioners’ office. providing medical advice, appointment
growing demand for immediacy of Combining remote monitoring, booking and niche services are
access to, and control over, health behavior modification and responding to demand from consumers
services. This is compounded by the personalized intervention by the distrustful of local clinics, in a country
added pressure of labor supply, with patient’s own care teams, these where access to doctors, particularly
the World Health Organization’s A innovations address the dual goals in rural areas, is limited. Ping An Good
Universal Truth: No Health Without a of empowering and motivating Doctor, backed by insurance group Ping
Workforce report estimating a current patients to take better care of An, offers free diagnosis and treatment
shortfall of 7.2 million health workers, themselves, while also avoiding and enables users to consult doctors
rising to 13 million by 2035. more serious and costly conditions through text, pictures and video. Valued
down the line. at $3 billion in 2016, the company
Ounce of prevention From tracking exercise patterns to claims to deliver more than 400,000
motivational messages and electronic diagnoses every day to its 27 million
Consumers’ relationship with their medication alerts, the opportunity to monthly active users.
health and wellness has evolved nurture patients to do more between
and now takes a greater focus check-ups is ripe and provides care
in their increasingly connected teams with even more rich data about
lives. Thanks, in part, to better patient behavior. This growing role of New-era healthtech
understanding of the links between technology across the healthcare value
behavior and health outcomes, 44 chain is building vast amounts of data In the more regulated European and
percent of US consumers say they that has game-changing potential. US markets, healthtech start-ups
have changed their view on health are innovating across the patient
and wellness in the past few years. Patients as consumers experience, responding to consumers’
Increasingly, their definition of expectations of the same immediacy
health is expanding to well-being, There is a disconnect in the patient of service and informed choice they
giving rise to greater interest in value chain. Even the most modern receive in other aspects of their lives.
nutraceuticals and food as medicine healthcare systems are built around From scheduling tools such as Zocdoc
— the notion that “wellcare” the linear, event-driven process of and Docplanner to virtual consultations
can help people avoid entering solving a health problem. Increasingly, with tools such as Dr On Demand,
traditional healthcare systems in the patient expectations are around technology is helping to reorient care
first place. living a healthier lifestyle — wellcare around the patient and his or her
— and better managing conditions needs, rather than asking the patient to
Empowering behavior change or caring for the sick. There is a work within a system designed in and
bridge to be built in the patient value for a different era.
For patients living with chronic chain that could connect early and
Retail banking
In search of
a simplifie
fi a ial life
Retail banking customers are facing an
increasingly confusing array of options to
manage all aspects of their money, creating
fragmented financial lives.
F
or today’s retail banking discount,” says Mitch Siegel, principal,
customers, technology National Financial Services Strategy
brings with it an implicit and Transformation leader, KPMG in
promise of making our the US. “Fintechs have been singularly
financial lives easier. But focused on simplicity, but where is the
the sheer number of financial-related true simplicity in a bundle of services?
apps has exploded, ranging across the These loyalty programs and apps
wallet from payments, money transfer, designed to help us to manage our
checking and savings accounts, wallet are so focused on one little slice
borrowing money, managing wealth of the wallet — so what they’re doing
and budgeting, among others. As the doesn’t seem to be about me and
ecosystem around our wallets has my life, it’s just a growing number of
become more complex and more companies trying to get a piece of it.”
fragmented, our financial relationships
have “unbundled” in the process.
“Managing our disparate array
of apps, wallets, providers and I don’t use my bank’s
passwords is becoming burdensome investment or savings
— it’s confusing and it’s reaching the
point where companies are at risk of
app because they bite
their customers giving up, frustrated me with fees.
by the effort it takes to build a few Bob, 75, boomer
more points or get that nominal Retired electrician, Liverpool, UK
Everything we do with our wallets ultimately falls into one of

two categories — spend or save. Historically, the delineation
between where and how we spend, and where and how we
save, was clear. But today, the boundaries have blurred and
new opportunities are forming across the ecosystem. This
presents traditional retail banks with the opportunity to break
out of today’s pattern of disruption and redefine their
relationship with the customer. At the same time, this could
mark a rise in competition from major platform and technology
businesses as they strive to move up yet a level further.
Judd Caplain
Principal, Head of Global Banking
& Capital Markets, KPMG International
Unbundling financial offering a better experience and in data. They’re being pushed further
relationships changing the ecosystem. away from a complete picture of their
These fintech players have created customers’ lives and losing access to
For most of us, the traditional experiences akin to Amazon, Uber and the behavioral, contextual data that
“bundled” offering from retail banks Spotify. There’s Apple Pay as your new helps to explain the “why” behind
seemed to work well enough, or so digital wallet, containing your payment customers’ choices.
we thought at the time. That bundle cards, loyalty cards and airline and Customers’ positive response to
enabled us to receive income and train tickets; Venmo for peer-to-peer recent innovations may be about to
make payments with checks or payments in the United States; Alipay falter, offering incumbents or, indeed,
wire transfers, take out loans for a aggressively tackling payments, loans new entrants the opportunity to
mortgage or car financing, service and savings across China; and Atom redefine their relationship with the
day-to-day borrowing with credit Bank and Monzo offering mobile-first, customer. The unbundling trend, while
cards, manage our savings goals or digital-only personal banking with met with enthusiasm to date, has a
investments and often fulfilled our limited product offerings in the UK. A downside, causing fragmentation of our
home or travel insurance needs. look at customer ratings in the Apple financial lives. Combined, the potential
App Store shows the top banks at a customer backlash that may lead to
2.66 rating and the top fintechs at 4.13. a rebundling of our financial services,
Spending and saving
These are great experiences, but and the blurring of how and where we
need to be seamless,
just a sliver of capability. These spend and save, presents a profound
and the management players aren’t re-creating the bundled opportunity for traditional retail banks to
of our wallets has to feel nature of a traditional retail bank in a recapture or redefine the role they play
as good as our best new digital capacity; they’re slicing, in their customers’ lives.
new experiences dicing and fulfilling limited aspects of But rebundling and the promise of
the function of our wallet better than a simplified financial life can’t involve
Over the last ten years, technology the bundled incumbents. a degradation of experience. Any
has opened the floodgates to a And customers have liked it, moving attempt to rebundle financial services
wave of unregulated new entrants away from the historically limited and integrate how we spend and save
that have both changed the way numbers of institutions servicing their must be as good or better than the
in which we manage the flows in wallet to a much wider portfolio of experiences offered by each individual
and out of our wallet, while also providers, unbundling the relationship
dramatically raising our expectations. with their bank in the process.
In 2015, more people in the United According to the Viacom Millennial I don’t have to
States did their weekly banking Disruption Index, 60 percent of bring cash with me
by mobile than at a branch. Retail millennials think big banks aren’t
anymore. We use
banks watched as a flood of fintechs designed to service their generation,
(financial technology start-ups and and 33 percent believe they won’t WeChat and Alipay for
new entrants) broke into the sector, need a banking institution at all. The everything in China.
picking off bits and pieces of that cost to traditional retail banks isn’t just Zi, 28, millennial
bundled customer value chain, in cold, hard commercial numbers; it’s Curator, Taiyuan, China
88%
of people in China use
WeChat or Alipay for payments
#1
payment method in the
UK: debit cards
provider in isolation. Indeed, spending and therefore simplifies, our financial
and saving need to be seamless, and the lives. These companies are already well Source: British Retail Consortium, 2017
management of our wallets has to feel versed in tapping into the rich vein of
as good as our best new experiences. contextual and behavioral data. That’s
why they’re a force to be reckoned with
Opportunity and threat come hand in the retail banking sector.
in hand
The opportunity for traditional retail

banks involves more than reclaiming a
prior dominance in the management of Managing our disparate array of apps, wallets,
their customers’ wallets. While they’ve
providers and passwords is becoming
always had great insight into what we
spend, where and how often, they’ve burdensome — it’s confusing and it’s reaching
typically lacked the data that explains the point where companies are at risk of their
why we spend what we do, and that customers giving up, frustrated by the effort it
enables a shift to predictive. That’s
what is at stake today.
takes to build a few more points or get that
At the same time, this isn’t just an nominal discount.
opportunity for the incumbents. Amazon, Mitch Siegel
Alibaba, Google or Apple, no means an Principal, National Financial Services Strategy
and Transformation Leader, KPMG in the US
exhaustive list, are all primed to enter this
race and be the player that consolidates,
I
n a world where consumers
have seen the removal
of friction points across
countless aspects of their
Insurance lives, questions about the
insurance industry cut to the heart
Reori e nti n g
of the centuries-old business:
“Does insurance really need to
be so complex? Why does buying
insurance have to be so hard?”
New customer-centric insurance
start-ups are aiming to answer these
questions, making a play for simplicity
around the person, and convenience, and taking cues from

other sectors. In 2016, Ladder Life
launched, offering direct-to-consumer,
not the risk

term life insurance online, with the
promise of being “instant, simple and
smart”. It aims to make insurance
quotes and policy choices as fast and
Technology is transforming customers’ frictionless as possible, asking only
expectations of insurance, but the evolution higher-risk customers to undergo
of the industry has only just begun. medical tests and provide samples. The
process of designing your policy takes
just minutes, involves no paperwork
and has an aesthetic that feels more
like using an app to order coffee than

mitigating your mortality risk.
And it’s not just new entrants that The technology and shifting consumer behavior that has driven
are rewriting the rules of play. The US’s much progress in other sectors is firmly taking hold within
largest publicly held personal lines insurance.” The companies that embrace disruption will be the
insurer, 85-year-old Allstate Corporation, ones to spot the opportunities emerging among the threats.
recently launched and spun out its own This is a time for the sector to shed its laggard status and
tech start-up named Arity, focused on redefine how it creates value for customers across all aspects
telematics and transportation analytics of their lives, in ways that exceed their expectations.
designed to improve risk management
and innovation in the sector, rather than
sit back and wait for insurtech start-ups Laura Hay
to do so. Head of Global Insurance,
KPMG International
The trend in frictionless, simplified
and contextually relevant insurance
processes is only set to continue. insurance, enabling consumers to insurance company, has led the
With an explosion of data sources and insure only the products they truly charge, now offering some 300
corresponding advances in machine value, rather than the full contents of insurance products and having written
learning and artificial intelligence, their home. What’s more, coverage is more than 7.5 billion policies for over
companies such as Carpe Data are provided only when needed, so you can 535 million customers.
bringing insight into people and life toggle the protection on and off from Not so in the United States, where
events from online and social streams your smartphone. despite regulators demonstrating an
into risk profiling. If life insurers can In the UK, pay-as-you-drive disruptor increasing openness towards working
motivate large pools of consumers Cuvva is bringing the same philosophy with new players, securing licensing
to opt in to providing access to vast to car insurance. Emerging from the through 50 different states remains a
pools of data, such as medical records founder struggling to lend a car to a slow, laborious process.
and social feeds, the implications for friend for a quick, one-off occasion, the Successfully capitalizing on the
underwriting are profound. digital start-up now offers insurance opportunities presented by new
by the hour, as well as a low-cost consumer expectations and new
Insurance on my terms subscription-based policy, allowing low- technologies means putting the true
use drivers to pay for the times they’re customer at the center of business
Workers in the on-demand economy, actually on the road. strategy with a value proposition that
whether it be an Uber driver or an shifts the model from check writing
Airbnb host, might object to maintaining Enabling innovation after the fact to prevention and
year-round coverage for something actionable insights for the customer.
that only requires it on occasions. That In response to changing demands
opens the door for companies such as of consumers and the emerging
Slice, a start-up backed by Munich Re, response from the insurance sector,
which offers on-demand insurance on China’s sole state insurance regulator
The trend in
a transactional basis — just pay for the has helped create a framework frictionless, simplified
days you have passengers or guests, that supports quick and easy online and contextually
not for the ones you don’t. sale and fulfillment of policies via
relevant insurance
Trov, another digital start-up providing platforms such as Alibaba, WeChat
insurance underwritten by AXA, and Baidu. Alibaba-backed Zhong processes is only
challenges the concept of home An, the country’s first online-only set to continue
Chasing customers
across the world
O
pportunity looks spaces in the US, understanding
different in every the cultural context of a market
country. While we is a prerequisite to understanding
currently see some the customer. Companies entering
similar trends in the India, for instance, must recognize
US and the UK (such as the effects the importance of a mobile-
of urbanization) and between first strategy to keep pace with
China and India (with their rapidly demonetization and the explosion
expanding middle classes), each of mobile payments while ventures
market presents unique advantages in the UK must balance investing
and challenges. to benefit from the nation’s rapid
Factors ranging from digital adoption of technologies, with
infrastructure to availability of the realities of competing with
human capital can affect which prominent, established players and
businesses are positioned to the looming cloud of political and
enter and successfully capture economic uncertainty.
consumers in the modern digital In the coming pages, we explore
landscape. From China’s tech some of the forces at play in
super-adopters living the majority China, India, the UK and the US,
of their lives through super-apps illustrating how customer behavior
on a smartphone, to the growing is evolving differently.
divide between urban and rural
T
he consumer landscape
in the United States has
United
become increasingly
fractured. An asymmetric
economic recovery has widened
disparities of income and wealth,
sparking new motivations from
customers, and leading to the need
for new products and services for this
significant portion of the population.
States:
The companies that have best
succeeded in bridging this divide are
the large tech-enabled platforms,
which are using their data advantage
to provide various groups with the
personalized experience they desire.
Recovery, but uneven
A brave new world Although the US economy has

steadily recovered since the 2008
recession, the progress has been
uneven. Trends show significantly
New tech platforms have upended the more job growth in urban areas
old ecosystem, with the ripples reaching than rural areas. Furthermore,
consumers in unexpected ways. technological advances have helped
to improve quality of life in cities
while leaving rural areas wanting.
In addition to high-paying jobs,
new technology has brought the
on-demand economy of WeWork,
Lyft and DoorDash — a new web of
on-demand services — to big cities.
As one of our survey respondents
We believe innovation and a customer-centric put it: “I have never used Uber or
approach are at the core of the successful Lyft because I live in a small town.
21st-century enterprise. Truly understanding It’s not an option for me.” For
many in rural America, being left
the nuanced nature and complexity of the behind by advantages provided by
changing consumer landscape is critical to technological advancement is all part
creating value for customers and sustaining of a recovery that never quite came.
competitive advantage. This divide also has geographic
nuances. Of the US participants in our
Lynne Doughtie survey, we found that the proportion
Chairman and CEO, KPMG in the US
Many of the customer’s

underlying needs have not
changed. Some have. What
the platform players have
done is change the way the
old and new needs are met
and served. And in the
process they are doing it more
effectively and efficiently,
creating a customer centric
platform business.
Julio Hernandez
Principal, Global Head of Customer Center of
Excellence, KPMG International Google, Amazon and Apple for due to more jobs and more new
server space, processing power, services, the cost of living has
marketing and distribution. As such, skyrocketed. Since 1980, the housing
of millennials (born 1980–2000) who the cost of a start-up has decreased prices in New York City, Boston, Los
say they are “very interested in new significantly since the 1990s. Angeles and San Francisco grew on
technology and usually the first one average 137.3 percent after inflation
to buy a new device when it comes X-tech compared with 18.4 percent for the
out” varies between 62 percent in the US as a whole, according to The
Northeast and 28 percent in the South. Similarly, customers, especially in urban Economist in “American House
These differing levels of participation areas, are flocking to X-tech, tech for Prices: Realty Check”.
with the digital economy were also a key everything across the customer wallet. Moreover, as urban dwellers migrate
theme in our ethnographic interviews. These investments have given rise to to new cities seeking a lower cost of
competitors about which traditional living, they will bring their new habits
Technology disruption businesses are becoming increasingly and preferences with them. Those
concerned. Retail? Meet retailtech, deeply entrenched from experiences
Despite this divide, tech giants are still creating a service around every retail in urban environments will carry over
finding ways to encircle the consumer. experience. Financial services? Meet and create opportunities for a new
Some 64 percent of US households fintech, unbundling every service a bank generation of consumer companies to
subscribe to Amazon Prime. Facebook provides. And the list goes on, from expand and grow.
has 203 million users in the US, 63 insurtech to wealthtech to healthtech. Areas that were hot spots of the
percent of the country’s population. These companies provide customer- 20th-century economy are reinventing
Google is responsible for 86 percent of centric, tech-first, frictionless to adapt to the new technology
US web search traffic. And there are experiences that solve unmet needs revolution. We’re already seeing
90.1 million iPhone users in the US, 40 and make their customers’ lives easier. evidence of skills, people and capital
percent of the population. In urban spaces, we are also seeing converging to reinvent or refocus
Perhaps even more impressive an evolution from DIY (do it yourself) cities tied to the power centers of old.
is the way these companies have to DIFM (do it for me), giving rise to For example, Albany in upstate New
made it easier and more cost on-demand services for everything from York is newly focused on nanotech.
effective for start-ups to build food delivery to laundry to pet grooming. For Akron, Ohio, it’s polymers. For
atop them. Where a decade ago Minnesota, medical devices. Portland,
companies would need to build How do we see all this playing out? Oregon, has technology. Pittsburgh,
all their own infrastructure, today Pennsylvania, has autonomous
start-ups like Uber or Airbnb can As urban areas have become vehicles, robotics and IT. Buffalo,
use platforms built by Facebook, increasingly popular places to live, New York, has battery technology and
Connie, 64, boomer

Innkeeper,
My motivation
Napa, CA “We own two hotels in Napa. Healthy and premium
Married, is our expectation. I pay full price for healthy or
new grandmother fresh and I don’t care how much it costs.”
My attention
My connection “I am on my iPhone
“I can’t stand to go all day long. I use a lot
without my phone. I of texting and store
was 30 minutes into my voicemails and take
commute on the freeway photographs for work
when I found out I left my as well. Communicating
phone at home, had to through photographs via
turn around and pick it up mobile has been very
and was over an hour late useful to our business.”
to my appointment. And I
47
love chatbots.” of boomers in the
US report that their
22
of boomers in the US report
that they would be very
% trust level for buying
products and services
% anxious if they left their phone/
online is very high
device at home
48% in China
35% in China
56% in India
47% in India
42% in UK
12% in UK
36 My watch
68
of boomers in the US report that of boomers in the US
My wallet dining out/takeout would be the report that they feel
“If I’m saving $2, I will not
% first thing they would cut from“I hate brands that use my % very anxious about
their budget if reduced by 10% personal information. I actively online privacy breaches
travel a mile. If it’s going to try to avoid it. I have felt this way 55% in China
cost me a few dollars, I’m not 15% would cut travel/vacations forever. I am willing to retype my
61% in India
going to waste time.” 13% would cut clothing information EVERY TIME.” 62% in UK
63%
clean energy. Fargo, North Dakota, is ‘there’s a better way to do this’.” What
a growing scene for tech start-ups. is different is how you understand your
consumers and respond to their unmet
So what can you do? needs. The companies succeeding
in the US are able to deliver a curated of the US’s population
The key fundamentals of business have personalized experience. To bridge the are Facebook users
not changed. Julio Hernandez, Principal, country’s divides, companies will need
Global Head of Customer Center of to look at how the customer’s decision-
Excellence, KPMG International, says: making process changes and his or her
“Things haven’t changed and the new Five Mys.
platform players aren’t discounting these
fundamentals. They’ve simply said,
US: My
motivation
My
attention
My
connection
My
watch
My
wallet
emerging » Decrease in trust in » Highest media and digital media consumption » Smartphone adoption near » Blurring lines between work and » High student debt
themes
traditional advertising compared to China, India and the UK universal personal life » Stagnant real wage growth
» Experiences increasingly prioritized » Nondigital TV still biggest media » Explosion of platform companies » Delay in traditional household » Generational wealth transfer
over material possessions, consumption channel but mobile and adoption formation
especially for millennials increasingly displacing desktop/laptop » Internet of Things and Artificial » Increase in on-demand services,
» Rise in social influencers » News consumption through social Intelligence taking off spending and expectations
An increasingly media increase, precipitating rise and
digitally savvy impact of filter bubbles
population amidst
tech explosion. High
student loan debt
and uneven wages
challenge some
consumers wallets. < 2 in 5
of people in the US trust online reviews
1/2
of people in the US glance at phone
74%
of people in the US would rather lose
64%
of people in the US open their
72%
is what people in the US spend as share of
without being prompted by a notification their phone than their wallet phone to relieve boredom wallet on necessities versus luxuries
at least every ten minutes
80%
increase in the average student loan debt
57%
of people in the US like technology and apps
43%
of people in the US get a notification
> 1 in 4
people in the US spend more than 30 minutes
1. Dining 2. Travel
Categories that people in the US cut first if

3. Clothing
amount over the last ten years that automatically filter information to help at least every ten minutes each day commuting to work disposable income reduces
relieve info overload
I used Mint.com to budget, I will mindlessly I use my phone I have never used Uber I will buy generic over
but I had my student loans in check my iPhone way more than or Lyft because I live in name brand 60%–70% of
there too. It kept showing me to kill time. my laptop. That’s a small town. It’s not the time if it’s cheaper.
that I was in debt and it was
my gateway to an option for me.
depressing, so I stopped.
communication. I walk.
Kelly L, 28, millennial Carlos, 36, Gen X Kristen, 30, millennial Rene, 24, millennial Tom, 69, boomer
Children’s media marketing, New York, NY Administrator, Miami, FL Digital marketing, Los Angeles, CA Recent college graduate, Canton, OH Hotel consultant, Napa, CA
Uni ted Kin gdom:

The connected consumer
If you want to see the future
of a connected consumer,
get on a plane to the UK.
E
very force that’s shaping the third-largest international market for British connected consumer as fodder
the connected consumer Amazon. And with Amazon’s 2016 UK for overseas giants. After tasting the
revolution is operating at revenues in excess of £7.2 billion, if a offerings from across the Atlantic,
full strength on this island standalone British company, it would they have driven the local companies
nation. According to British comfortably be a member of the local they know and love to raise their
regulator Ofcom, its citizens are more FTSE-100 stock index. digital quotient.
likely to watch streaming TV or use The result has been a virtuous As an example, after getting their first
the net to shop, bank or order a taxi circle of cutting-edge services finding taste of Uber in 2012, they demanded a
than those of any other comparable a willing market among connected similar level of service from homegrown
nation. And the UK’s compact size British consumers — which in turn players. The result: operators like DPD
means that any disrupter that needs spurs the next round of innovation — Local, Just Eat, RingGo and AppyParking
physical infrastructure can quickly roll both digital and physical. offering smart apps with intuitive
out a service (and just setting up in If there’s one number that underlines experiences and real-time tracking are
London and its hinterland means you how far the revolution has proceeded in thriving, in categories from transport to
have access to a third of the country the UK, it’s this: e-commerce will make delivery to dining, to name a few. It’s
already). Broadly, logistics is a breeze up 7.9% of the nation’s GDP in 2017, the a demonstration of how the best new
and the government is tolerant — if not highest of any country in a study of more experience becomes the new normal for
encouraging — of digital disruption. than 30 countries. That’s far higher than demanding, connected consumers.
The UK was the largest market outside the 5.8% of second-place China and Scale helps in what is, after all,
the US for Alphabet, parent of Google; dwarfing the 2.3% of the US. Europe’s second-largest economy.
the second-largest market for eBay; and But it would be a mistake to see the Yet the advent of hyperlocal services
is creating a new dynamic, knitting

together networks of local suppliers The UK’s connected consumer undoubtedly
and helping Britons discover them. The
represents a compelling opportunity for growth-
clearest example of this is the success
of app-based food delivery, with two of minded companies. But winning with this digitally
the big global platforms being based in astute population demands companies to take the
the UK. rhetoric of customer centricity seriously. Those that
The high level of digital engagement
is driving the physical and digital
invest in truly understanding the drivers of behavior
worlds to blend and opening the door and choice within this hyper-connected nation —
for numerous variations in plot lines, and mobilize an organization-wide response — will
enabling companies to create more be best placed to create and iterate the experiences
personalized value propositions. What’s
more, this fluid movement between
and propositions that hit the high-expectations of
online and offline, mobile and physical the connected British consumer.
— combined with the compact,
urbanized geography — has made Bill Michael
Chairman, KPMG in the UK
click-to-collect a very powerful business
model for established UK retailers such
as Argos, House of Fraser and Curry’s. for which technology has been the Fashion retailer Burberry, for instance,
The continued blurring of online and trigger,” commented Nick Griffin, has brought UGC on-platform and
offline is underlined by the statistic global head, Global Strategy Group, publishes photographs of its customers
that 65% of consumers collecting KPMG in the UK. “The ability to wearing its iconic trench coats on
goods sometimes then go on to make connect with, and influence, a person’s its website. Or take homeware
additional purchases — reinforcing that behavior from thinking to action and retailer MADE.COM, which in 2014
with the online/offline arena in the UK, beyond, has led companies to change launched “unboxed”, a UGC-platform
both channels need to be best-in-class more than their propositions — but for consumers to showcase how
with the user experience shaped most major companies trading today their newly purchased products have
by ecosystems of insights. assembled their assets in and for brought life to their homes. These such
Some online businesses have a different era. In this competitive examples are driving both an emotive
recognized the power of their data environment, companies need to connection as well as engagement,
beyond the digital world, spotting design insight-driven experiences that creating moments that matter in their
opportunities for growth or deeper are consistent across all layers of the customers’ lives.
customer engagement in the physical organization. Eliminating silos, customer In some cases, the needs of the
world. Citymapper, for instance, a and operational teams need to work connected consumer are being met
transport app that started in London shoulder to shoulder, harnessing digital by “gig economy” workers on flexible
but is now global, identified important to drive value to both the customer and terms. The UK has long been tolerant of
unserved routes that the city’s the board.” this type of casual working — so-called
transport authority hadn’t discovered Increasingly, businesses are “zero hours” on-demand working has
and is now starting to offer bus and harnessing the power of user- been common in the hospitality and
shared taxi services to fill the gaps. generated content (UGC), particularly care home sectors for over a decade.
“A chain reaction of data explosions given UK consumers’ intolerance But the numbers have sharply risen as
has taken place over the last 10 years, of conventional internet advertising. app-based platforms gain real scale.
I go to Whole Foods
because it’s the closest
grocery store, even
though it’s five times
more expensive.
Sandy, 26, millennial
Public relations, Leeds, UK
often refer to their island as physically

crowded, but it’s becoming increasingly
digitally crowded too. The UK is higher
up the adoption curve for digital
services than most rivals, which means
e-commerce growth in 2017 will be
slower than France, Germany or Italy.
In some areas, the “platform effect”
is in full swing, with smaller players
crushed as a small number of winners
emerge that can reap the economies
The UK may look small on a world into an export-led, Beatles-powered of scale. Online food delivery platforms
map, but it would be a mistake for force that still, in 2016, contributed are an example, more than a decade
outsiders to think it a homogenous £4.4 billion to the UK economy and after the first services were launched.
market. Its regional differences are £2.5 billion to exports. It’s not clear whether the creation of
well-documented; less obvious are the This time around, a whole layer market and platform champions such
generational issues. of digital intermediaries is trying to as Deliveroo and Just Eat will give
Among them: high local house help time-poor Britons select their them extra pricing power.
prices, especially in cities such as experiences, from gyms to music The overall picture of the United
London, Oxford and Cambridge, mean festivals, providing a digital glue Kingdom is that of a highly digital
that many young Britons despair of between consumer and provider nation, gorging on high-quality
purchasing their own home nor want with rankings, reviews, offers and offerings both local and international
to. Official statistics show many aren’t a host of other digital features and — with discerning consumers putting
saving for retirement either. This enhanced services. The best of them pressure on brands to offer a premium
may be a long-term problem for the would measure well on our Five experience. The ongoing economic
real economy, but it’s a boon for the Mys framework, particularly in their uncertainty, the timing of key events
“experiential economy” and the digital understanding of the motivations, and the political response will all affect
services that go with it. connections and changed thinking consumer behavior, the availability of
We’ve been here before: the around time that characterize human capital and overall consumer
rapid rise in disposable income by connected consumers in the UK. trust. Business leaders need to be
youngsters in the UK in the 1960s But don’t think that the UK is an prepared to understand the effects
helped turn the British music industry easy place to win business. Britons of these and respond in the way that
Stacey, 38, Gen-X

Nurse, My motivation
Liverpool, UK “As a new mom to twins, my drivers
New mom of twins, right now are around taking care of my
in long-term relationship babies. And sleep! I need sleep.”
My connection My attention
“I measure my life in
“We are in survival minutes between cries,
mode. I glance at my feedings and naps. My
phone so rarely right babies have my full
now. If you’re not a attention 24/7 right now.”
doctor or a delivery
person, I’m probably not
46
is the average share
responding.” of wallet allocated
%
34
of Gen Xers in the UK report to household
being interrupted by their expenses in the UK
% primary device at least once 36% in China
every 10 minutes 32% in India
33% in China 35% in US
50% in India
30
50% in US
%
My wallet My watch
67
of Gen Xers in the UK report that of Gen Xers in the UK
they use their mobile device to report that their trust
“I have started taking uberPOOL “I don’t even have time
to save money. It takes longer to
% pay for goods and services up to
to sleep right now.
level for on-demand
20 times per month services is very high
get places, but I have more money Everything on demand
to spend going out with a small 88% in China means we can spend our 36% in China
trade-off of my time.” 86% in India time with the babies.” 55% in India
71% in US 43% in US
drives engagement and interaction. KPMG in the UK. “In the last year, just The Brits are demanding consumers,
The companies that will be the 13 percent of UK and US brands were but equally ones that can be potentially
most competitive are those that can able to deliver a clear improvement in lucrative and quick to win — for
use data most effectively to adapt customer experience. I believe insights those companies that recognize and
to changing customer needs in a are now firmly in the driving seat of embrace what the connected
landscape that is constantly changing. tangible business change. We’ve seen British consumer means for their
“Many of our clients want end-to- huge appetite from clients of all sizes organizations — not just in experience
end customer transformation and use to move on from sterile debates about design, but in how they realign
the latest advances in customer insight feedback and metrics, to focus on their operating models to deliver it,
to guide their efforts and justify their making better decisions, redesigning and integrate marketing, sales and
investments,” added Adrian Clamp, journeys and creating financially customer service capabilities to
partner, head of Customer Advisory, grounded business cases.” become the connected company.
UK: My
motivation
My
attention
My
connection
My
watch
My
wallet
emerging » Decrease in trust in » Lower time spent with digital media » WhatsApp and Facebook » Delay in traditional household » Wealth primarily owned by
themes
traditional advertising compared to US, India or China usage dominant for social formation baby boomers
» High on-demand expectation, » Fastest adopter of digital in Europe, » High use of contactless card » Shorter work week hours compared » High student debt
but value driven expected to tip non digital media payment and increase in to US, India, China, but increasing » House prices in England and in
» Lower trust in media than consumption in 2018 mobile payments concern with work/life balance particular London increasing
US, China, or India » News consumption through social » E-commerce and click-and- » High and increasing commute
Rapid tech adoption
media increase, precipitating rise collect growth continuing times for UK workforce
and move towards
and impact of filter bubbles
cashless economy has
given rise to a truly
digital consumer.
1 in 5
people in the UK trust online reviews
2 in 5
people in the UK glance at their phone
61%
of people in the UK would rather lose
62%
of people in the UK open their phone
76%
of UK total wallet share is spent on
without being prompted by a notification their phone than their wallet to relieve boredom necessities rather than luxuries
77%
of UK postgraduates will never “pay off”
44%
of people in the UK like technology and apps
72%
of people in the UK use PayPal as a
1 in 3
people in the UK spend over 30 minutes
1. Dining 2. Clothing
Categories that people in the UK cut first if

3. Groceries
their student debt to automatically filter information for them in payment method each day commuting to work disposable income reduces
Source: Institute for Fiscal Studies, 2017 order to manage info overload
I plan on buying a house, I don’t use long If I forgot my phone I would To get 10% off, I We go on holiday 4 or 5
but I can’t until 50 years go back to get it; I can’t times a year, maybe more.
from now if I want to live in
format news will research for a
imagine I’d be able to cope All of my income goes
London. I started budgeting anymore because without. (When) running out few hours… I am a there and my husband’s
for a house within the next 5 I’m so used to of battery, you’re in a total bargain hunter. goes to meals and rent.
years, but not in London. Facebook. panic, feeling like you’ve lost
a limb.
Alec, 25, millennial Bob, 68, boomer James, 34, millennial Mandy, 43, Gen X Bethany, 28, millennial
Product manager, London Retired electrician, Liverpool Therapist, Bolton Nurse, Manchester Self-employed and part-time student, Glossop
ILeapfroggi
ndia: ng towards
digital economy
Increasing affluence, a digitally native young demographic, a
rising middle class, regulatory reform and mobile adoption are
converging to accelerate India towards a truly digital future.
G
rowing urbanization, market ecosystems. Companies
internet penetration seeking growth in India might
and the proliferation best structure their strategy by
of smartphones have approaching the market in the
set the stage for same way they would a continent,
large-scale growth in India, whose focusing on each region’s unique
population is predicted to overtake customer profile.
China’s as the world’s largest in KPMG’s Head of Digital
the early 2020s. It is also one of the Consulting Services in India
world’s youngest populations, with Rachna Nath comments:
50 percent of citizens under the “Successful retail companies,
age of 25 and more than 65 percent for instance, need to be far
under 35. more responsive to the local
customer context than you might
A country or a continent? find in other countries. There’s
no one size fits all, no one size
Many companies have fallen fits one region or even one city.
short with a one-size-fits-all Consequently, there’s no such
strategy in India by failing to thing as an ‘India strategy’, in the
understand customer needs by same way there’s no such thing as
region. India comprises 29 states ‘Indian food’. As the author Rama
and seven union territories, each Bijapurkar argued, everyone needs
with vastly differing customer to create their own India.”
behavior, cultural nuances, supply In recent years, the Indian
chains, distribution networks and government has introduced a
India’s digital ecosystem is rapidly becoming

inclusive and extensive. From unique digital
identities to digital payments and e-commerce,
digitization is transforming business and
interactions at all levels, increasing transparency
and speed. Alongside the growth in digital
ventures in centers like Bangalore and Gurgaon,
which are second only to Silicon Valley, the
vision of Digital India is becoming real.
Arun M Kumar
Chairman and CEO, KPMG in India
Yuvraj, 28, millennial

Start-up founder,
My motivation
Delhi, India “I’m always learning. I have to keep up with the
Single, lives with parents latest programming for my start-up. I teach myself
new code by watching videos online and doing a
lot of reading.”
My attention
My connection “I feel pretty clueless
“I get products when I about what I want
really need them and do to do in life. I don’t
a lot of online research ever want to have my
before I make a purchase. “ whole life mapped
out, but any new skills
49
of millennials in India report I can learn quickly will
that they keep up with new keep my full attention
% technology, but will only buy until I master them.”
a new device after they see
90
others use it of millennials
53% in China in India use an
47% in UK
% Android phone
52% in US regularly
74% in China
59% in UK
65% in US
My wallet
“I will give up almost anything
to save money. Except good
70 %
of millennials in India report that their wallet
My watch
“I tend to feel suffocated when I’ve been in a place
for too long. I’d find a way to save and scrape
coffee — it is my one luxury.” goes toward necessities (vs. 30% to luxuries) together enough to get me out of the country at
78% vs. 22% in China least every other year, even if it’s around SE Asia
70% vs. 30% in UK and cheaper countries close to home.”
65% vs. 35% in US
series of policies and reforms to Citizens then had a 50-day window to of digital payment technology. Now,
help accelerate its citizens’ adoption either deposit outstanding currency according to our survey, 97 percent
of digital payment technologies. into a bank account or exchange them of Indian consumers have used
for newly designed notes intended to mobile payments.
Demonetization of the rupee eradicate counterfeit currency.
(DEMO) DeMo created a scarcity of Mobile banking for feature phones
cash for almost two months,
Prime minister Narendra Modi caught driving consumers and businesses In a country still heavily reliant on
the nation by surprise in November alike to embrace digital payment feature phones, especially in rural
2016, announcing the immediate technologies for the first time, areas, the government introduced
cancellation of 500 and 1,000 which the government now a digital payment service for the
denomination bills, almost nine out continues to support through population of nonsmartphone users.
of every ten banknotes in circulation. incentives such as a lottery for users Feature phone users can dial *99#
I use my phone for

literally everything
— all day everyday.
Anaika, 28, millennial
Brand marketing, Bangalore, India
to make secure online payments

without downloading additional
software or apps. One individual
in our survey commented: “I pay
all my bills on my phone now.
Shopping, like for groceries, I do
that on my phone as well, which
is something I wouldn’t have done
earlier.”
Nationwide adoption of biometrics
Since 2010, the Indian government

has collected fingerprints and iris
scans from 99 percent of adults, What’s next? wallet. Understanding the wide
making Aadhaar, as it’s known, the variations among Indian consumers,
world’s leading domestic biometric “You have India and then you have as well as the cultural context behind
identification system. Despite Bharat, the Hindi name for India, which larger changes throughout the country,
being positioned as a voluntary commonly symbolizes the nation’s can help businesses understand how
scheme, Aadhaar has reached such rural and heartland,” says Aditya Rath, to make effective progress in India.
scale that the government has partner, Management Consulting, KPMG
started to make it a requirement for in India*. “Digital India’s biggest impact
essential services, such as paying will be to bridge the gap between India
income tax and receiving a death and Bharat, and to provide a uniform
Interfaces of apps are
certificate. It is due to be extended experience to the consumer.” much more efficient
to services such as mobile phone The foundations for a thriving, and convenient. I use
subscriptions and travel bookings, connected economy are in place,
the internet to buy
further enhancing the efficiency and the shifts in consumer spending
and security of digital transactions, power are already underway. What’s more things that I
while simultaneously helping the following now is a new set of haven’t in the past.
government to tackle tax evasion consumer motivations, expectations, Gayatri, 31, millennial
and corruption. aspirations and an evolving customer Corporate communications, Mumbai, India
India: My My My My My
emerging motivation attention connection watch wallet
themes » Discount and cashback driven,
looking for the best deal
» Young population with high
» Lowest time spent with media
compared to US, UK, China
» TV still dominant but digital
» Lower cost of mobile data fueling
dramatic increase in mobile data usage
» Rise of online marketplaces (Flipkart,
» High level of women not participating
in the workforce
» Relatively low number of vacation
» Demonetization driving move to digital
wallet and payments are leapfrogging,
but cash is still vital
percentage of millennials increasing, especially mobile Snapdeal), and WhatsApp and days; leisure time seems to become » Growing middle class
A millennial heavy » Rising trend towards individualism » Mobile entertainment and live Facebook as dominant social platforms increasingly important
population and streaming on the rise » Connect with brands via social media » Average time spent in school is less
rapid mobile
adoption lay the
foundations of a
digital economy.
41%
of people in India trust online reviews
51%
of people in India glance at their phone
57%
of people in India would rather lose their
72%
of people in India open their phone
68%
of Indian total wallet share is spent on
without being prompted by a notification phone than their wallet to relieve boredom necessities rather than luxuries
57%
of people in India feel a need to keep stress
80%
of people in India like technology and apps to
88%
of people in India use WhatsApp
1 in 2
people in India spend over 30 minutes
1. Travel 2. Dining
Categories that people in India cut first if

3. Clothing
under control to stay healthy (compared to automatically filter information for them in each day commuting to work disposable income reduces
42% global average) handling info overload
I pay full price for The first thing I do in I’m an addict I would pay for a beautician I am constantly
health supplements the morning is check to a bunch of to come to my home. It’s ticketing, so I use an
because in India there my text messages, but screens. very crowded and congested app to find the best
outside. I’ll spend more to
are many fake ones. I’m super embarrassed deals. I work hard
stay comfortable.
about it. on that.
Aditi, 25, millennial Mandira, 22, millennial Sunande, 36, millennial Suman, 56, boomer Kanika, 25, millennial
Professional swimmer, Bangalore University student, New Delhi Talent marketing, Delhi Homemaker, Mumbai Chef, Mumbai
Eastern-boomer
e ho e e t
The changing motivations and
expectations of millennials are
permeating the wider family
unit in India — and it’s a trend
that looks set to accelerate.
B
ehavior transfer between
millennials and their
baby-boomer parents
isn’t a trend that’s
restricted to the West, but it is
playing out at a different pace, and
against different technological and
social contexts, in India.
The concept of the family unit
is generally regarded to be much
stronger and more hierarchical in
India than in the West. Fueled by
significant increases in life expectancy,
it’s commonplace to have three
generations of a family living together.
And while nuclear families — an
isolated unit of a couple and their
unmarried children — have recently
been rising, India’s long-established
extended family structure, which
incorporates relatives and grandparents
in the family, remains prevalent.
The long-held cultural and values- Percentage of boomers that the flight to digital payment methods
use device regularly
based custom of respect for, and was rapid and significant, and the
deference to, elders is still strong adoption of this new technology was
88%
today, so family influence on the very heavily influenced by millennial
buying patterns of millennials remains children reverse mentoring their parents.
significant. The closer you move to A similar influence can be seen
India’s rural heartland, the more this in changing media and content
is the case, whereas members of Android phone consumption habits. As Netflix and
the younger generation, who have Amazon increasingly create highly
73%
moved out of parental homes and into regional, localized content to appeal
bigger cities, are adapting to changing further to the Indian consumer and
patterns with greater independence. challenge the likes of Hotstar, the local
“It’s long been a cultural assumption digital video streaming service, they
that when a child starts working, Laptop are actively targeting younger early
they will stay with their parents and adopters in tier-one cities, with the
assume added responsibilities for aim of harnessing the wider family unit
the family unit,” says Rachna Nath,
partner, head of Digital Consulting
Services, KPMG in India*. “It’s well
established that parents, brought up in
the traditions of the Indian family unit,
62%
Desktop
influence of these more digitally savvy,
more connected millennials.
Digital infrastructure inevitably
remains a challenge, and the full impact
of urbanization on the long-established
are keen for their children to stay with family unit will take time to play out fully.
them once they reach adulthood.
“But it’s also far from unheard of for
children to feel the same way, even
as they’re presented with greater
opportunities, new expectations and
21%
Mobile Wi-Fi hotspot
But connectivity is on the rise in India,
even if at a slower pace than has been
witnessed in the West. Companies
that identify and engage the digitally
progressive millennial, and create locally
a more global outlook than in years relevant and intuitive experiences
15%
gone by. In contrast with what’s being that are primed for sharing across the
experienced in the West, the reasons long tail of generations in the same
for this are less financial ones and more households, have the opportunity to
driven by the emotional bond instilled be a part of what’s set to become an
in the concept of the family unit.” iPad accelerating period of technologically
The baby-boomer echo effect in India fueled change across the nation.
is often referred to locally as “reverse
mentorship”. Culturally, Indian consumers It’s long been a cultural assumption that
aren’t wired to question their elders and
aren’t expected to teach or instruct them, when a child starts working, they will
but there is an expectation of sharing, stay with their parents and assume added
facilitating and introducing.
When demonetization was introduced
responsibilities for the family unit.
in November 2016 and the country Rachna Nath
experienced a short-term cash shortage, partner, Head of Digital Consulting Services, KPMG in India
Chi n a:
Window into the future
China’s changing consumers aren’t just
reshaping the dynamics of the world’s
largest market; they’re set to reshape the
world as we know it.
T
he evolution of the Chinese
consumer is on the way
to becoming the defining
story of the 21st century.
The sheer scale of change
from a manufacturing to a consumer-
based economy, along with the pace
of adoption of new technology and its
pervasiveness, is without precedent.
KPMG’s annual connected consumer
research shows how China has
established itself as a major player China is truly playing a central role in
in the digital era. The annual report, global growth and, while the forces
now in its third year, has tracked
of change echoing around the world
and discussed the behaviors and
preferences of China’s consumers, present increasingly complex business
and pointed to a mobile evolution. For challenges, we believe that the evolving
example, more than 90 percent of Chinese economy is well positioned
the study’s China respondents made
at least one online purchase using a
to capitalize on this change, both
smartphone in the past 12 months. This domestically and overseas.
is a staggering figure, especially when Benny Liu and Honson To
compared to other markets, especially Chairmen, KPMG China
the United States and UK, where this category expected to soar from
consumers made purchases with their 4 percent in 2010 to 54 percent by The recasting of
smartphones less frequently. 2030, creating hundreds of millions China’s role on the
of new consumers. By 2030, those
China’s country context for the with upper-middle and high disposable
world stage and the
changing consumer incomes are forecast to increase growth in economic
from 10 percent to 35 percent of the opportunity across
Understanding this fast-changing population, while those households the spectrum of the
nation requires an appreciation of the with the lowest disposable incomes are
population is frankly
changing landscape over the past few expected to decline from 37 percent
decades, which is dominated by four to 11 percent. This ascent brings with
unprecedented
macro themes: it significant macroeconomic impacts, in modern history.
further accelerated by hyperadoption of
Benny Liu and Honson To
The shifting population new technologies, and is a light-speed Chairmen, KPMG China
version of what happened in the United
The population shift from rural to States during the 20th century.
urban over the past 30 years has been productivity, especially given the rapidly
colossal. Between 1990 and 2015, the Reshaping the nation’s economy rising wages needed to fuel household
proportion of China’s population living spending. Amid these seismic shifts
in urban areas jumped from 26 percent The government’s 13th five-year in the country’s landscape, nowhere is
to 56 percent, with an estimated 200 plan continues the goal of growing the evidence of change more profound
million rural migrants going to work in household consumption as a share than in China’s insatiable appetite
China’s biggest cities. of GDP, over exports. It prioritizes for technology.
growth in the service sector over
The rise of the middle class manufacturing and seeks to rebalance The rise of the mega platforms
its source of competitiveness from low-
China’s rapid urbanization is a reflection cost assembly to high-value innovation, With consumers spending so
of a burgeoning middle class, with incentivizing research and development much of their lives on super apps,
urban working-age households in investments, and seeking to improve companies such as Tencent and
Alibaba have access to almost
unparalleled amounts of data that
provides deep insight into consumer
behavior, needs and preferences in
almost all aspects of their lives. Their
move from merely understanding
the customers to being able to
predict needs and wants before the
consumers know them themselves,
coupled with the ubiquity of the
platform business model and access
to further aspects of the customer
wallet, makes these brands a force
to be reckoned with not just in China,
but on the global stage.
“The pace of change in China is innovation flowing around the world, Second, China should no longer
incredibly quick — it’s relentless,” the disruptive forces which follow are just be considered the workshop of
says KPMG Partner in Hong Kong unlike anywhere else.” the world, but instead a window into
Anson Bailey, head of Consumer and the future. The change and disruption
Retail, ASPAC. “China alone is home Takeaways being witnessed in the East isn’t
to almost half a billion millennials, caused by technology; it’s merely
a characteristically tech-savvy and First, for brands looking to access accelerated by it.
demanding generation. We have in China’s growing middle-class The real disruptor in China and the
excess of 730 million internet users, on population and their booming spending real disruptor for businesses in any
par with the total population of Europe. power, the message is simple: if you’re other market is the customer. And
And what’s more, 95 percent of those not on the platforms that power the if the Chinese customers are ahead
users access the internet on a mobile lives of Chinese consumers, success of the curve, then they’re providing
device. When you combine that sort will likely be elusive or, in the very a glimpse into a future for the rest
of scale with the level of technological least, expensive. of us.
Daniel, 29, millennial

Creative Director, My motivation
Shanghai, China “I am so forgetful. I have set up lifehacks to help me
Single
remember. Like the Apple Reminders app because it
syncs between my phone and laptop. I heavily rely on
my Apple ecosystem.”
My connection My attention
“Being without my “I glance at my phone
phone is an awful constantly with
feeling. I was pick- notifications. WeChat
pocketed outside a Moments are how
train station once and I keep up with my
I was so crestfallen I friends’ adventures. I
had to lay down and start and end my day
fall asleep to shut the on WeChat.”
world out.”
92
of millennials in
China report that
% they use WeChat
91% of Gen X
My wallet 88% of boomers
“I use an on-demand app for

everything—everything goes My watch
36
through my WeChat wallet.” of millennials in
“Alipay and WeChat payments are how I China report that at
48
of millennials in China report that they would pay for everything. No need for account % least half of all their
like to use WeChat as the single platform for numbers and complicated names. Money payments go through
% all their communication transactions transferring in China is fast and flawless.” WeChat or Alipay.
China: My
motivation
My
attention
My
connection
My
watch
My
wallet
emerging
themes
» Connected and “social” consumers » Increasing time spent with digital » Fast growth in smart phones and » Delayed household formation and » Growing middle class
» Instant messaging with brands on media and live streaming mobile payments upcoming shortage of time to spend » Consumer spend on food (47%),
the rise » Mobile > PC, and media » Rise of online market places caring for the elderly personal products (17%), dining out
» New influencers like bloggers, consumption through apps (Tmall, JD, Amazon) » Leisure time seems to become and recreation (11%), transportation
videos, and live stream shopping » Digital multi-tasking » Growing sharing economy, on- increasingly important and communication (11%), housing
A growing middle embedded in business models demand and express delivery » Increased service economy: DIFM and utilities (7%), education and
class and ubiquitous > DIY, low labor costs healthcare (6%)
tech platforms
have given rise to a
digital consumer.
1 in 4
people in China trust online reviews
1 in 3
people in China glance at their phone
29%
of people in China would rather lose
81%
of people in China open their phone
79%
of Chinese total wallet share is spent on
without being prompted by a notification their phone than their wallet to relieve boredom necessities rather than luxuries
60%
of Chinese millennials wish they were more like
78%
of people in China like technology and apps
91%
of people in China use WeChat
> 1 in 3
people in China spend over 30 minutes
1. Dining 2. Travel
Categories that people in China cut first if

3. Clothing
the person they describe themselves as on social to automatically filter information for them in each day commuting to work disposable income reduces
media (compared to 31% global average) order to manage info overload
I trust bloggers a lot. I use WeChat every It is impossible for If I can save 10%, I will buy anything
I will buy products minute, every hour me to leave my I’m willing to wait to as long as the
they recommend over to chat with friends, phone at home. purchase at duty free or quality is good and
big brands. family, brands and get I would feel anxiety. have a friend bring it to it saves me time.
my news. Nomophobia. me from overseas.
Rong, 28, millennial Helen, 52, boomer Zi, 28, millennial Daniel, 29, millennial Theresa, 28, millennial
Private education department chief, Beijing Teacher, Guangzhou Curator, Taiyuan Design Director, Shanghai Nurse, Xiamen
One app
to rule them all?
For years China has excelled at adopting and adapting
technology from the West, but when it comes to WeChat, the
country is blazing the trail for “super apps” and leaving Western
platforms in their wake.
I
f you live somewhere in the Western
world, some of this routine might
sound familiar: you wake to your The Chinese consumer’s thirst
iPhone’s alarm and scroll through any for, and adoption of, new
overnight push notifications, check technology is unparalleled. As
your text and WhatsApp messages, then WeChat users navigate
cycle through your news apps to see what’s seemingly all of their daily
in the headlines. You then indulge in a quick needs – and marshal their
scan of Facebook, Instagram and Twitter.
attention, their time and their
Remembering your significant other left
money – through one single
early with the car, you book an Uber to catch
the train. En route you check in with your digital platform and its
partner and agree to arrange a restaurant for seamless, intelligent and
dinner. You flick between Foursquare and intuitive experience, those
OpenTable to try and find something a bit companies that fail to
different, then try a Facebook post asking for understand and meet the
recommendations. At the train station, you consumer on their terms risk
buy your tickets using Apple Pay.
being left behind
Your brother makes an interesting
restaurant recommendation on Facebook,
Belle Morton
so you grab a reservation on OpenTable. Director, Head of Customer
Dinner’s not bad and the food is presented Advisory, Hong Kong
creatively enough that you snap a and Uber, and you’re starting to
picture or two, reminding yourself scratch the surface. WeChat fact file
to post them with #instafood when Boasting a staggering 963 million
Launched in 2011, WeChat has become not only
you get the chance. In the Uber on monthly active users, WeChat began
China’s top messaging app, but also something
the way home, OpenTable sends life as a messaging platform, but that looks increasingly like a mobile operating
you an email asking for a review. has grown rapidly to serve as a one- system. Users can do almost anything from the
Maybe later. stop shop for managing all aspects app, including paying bills, buying online goods,
Once home you grab the electricity of Chinese consumers’ lives It’s no consuming news and entertainment content and of
course chatting.
bill pinned to your fridge and take wonder 61 percent of our survey
care of it in your banking app — respondents in China said WeChat is
another thing off the to-do list. their most-used app.
768 million daily logged-in users as of
September 2016, up 35% on the previous year
Finally relaxing in front of the TV, The volume of services available
you see a commercial for that film through WeChat crosses the 61% access WeChat more than ten times a day
you’re desperate to catch on the big customer wallet from providing
58% use WeChat for browsing and posting
screen. Not to worry, you still have financial services, such as taking on Moments
that AMC app somewhere on your out loans, buying insurance and
phone; you check the times. Then on investing money, to creating 54% use for sharing information
to WhatsApp to ping friends to see if access to a full range of goods and 40% use for reading content via public accounts
they’d like to join; they’re in. You’ll pick services, including booking medical
34% use for sending and receiving money
up the cost of the tickets and they’ll appointments, organizing flower
pay you back via Venmo. deliveries, browsing vacations to 33% use for mobile payments
During the day you’ve been in and hiring a plumber, electrician or
Source: eMarketer, 2016
out of some 14 different apps. They physiotherapist — All powered by
each serve a purpose, they’re easy its integrated WeChat Pay platform; its success or the Chinese platform
to use and they’re familiar. But the all informed by user reviews and itself looking for new growth outside
overall experience is also a little clunky, instant social feedback; and all its domestic market.
requiring multiple apps to achieve a creating enormous volumes of To some this might feel like a chapter
single task. transactional, contextual and from George Orwell’s 1984. To others
In China, however, everything behavioral data. it’s a personal digital concierge that
you did during that day would be While this app is largely unknown makes your life easier than you could
played out in one “super app” called to Western consumers, it’s time to ever have imagined and an acceptable
WeChat. Imagine a combination of take notice because it’s heading in trade-off for your privacy.
Facebook, WhatsApp, Instagram, that direction, either as a result of Either way, it’s a glimpse into
Google, Amazon, Venmo, OpenTable Western-born apps trying to emulate the future.
Imagine a combination of Facebook,

WhatsApp, Instagram, Google,
Amazon, Venmo, OpenTable and
Uber, and you’re starting to scratch
the surface
A perfectstorm
Change is inevitable. Industry shocks, business
model disruptions, pivotal economic and geopolitical
moments, and the shifting sands of consumer behavior.
Throughout the industrial and information revolutions,
these changes accelerated, their impact deepened and
their intensity grew. But this has just been the warm-up
act — we’ve reached an inflection point.
W
e’re currently signs of abating. Look to the East,
witnesses to where a burgeoning middle class
the collision of and continued shift from rural to
three revolutions urban environments will see China
of a disruptive home to an expected one billion
and industry-defining nature: urban consumers by 2030. With the
the geographic and geopolitical country’s five-year plans continuing
revolution, the demographic to focus on creating much more of
revolution and the technological a consumer economy rather than
revolution. In isolation, each exporting, Chinese consumers
offers a glimpse into potentially are becoming an increasingly
different futures. But in concert, prominent force on both the
their combined impact is frankly domestic and global stage.
unparalleled and no company, in any In India, despite some
sector or in any corner of the world, headwinds, the country is shifting
is immune. Put simply, we’re in the up the income ladder, with millions
midst of a perfect storm. of citizens breaking out of poverty
and becoming consumers for the
Geographic and geopolitical first time — estimates forecast up
revolution to 500 million by 2030 — and also
growth at the upper end of the
Present levels of geographic and spectrum as household incomes
geopolitical uncertainty show no continue to rise. Companies are
rapidly reorienting to put customers

center stage in business strategies.
Meanwhile, India recognizes the
need for significant infrastructure
improvements and investments.
Hence the introduction of the
Goods and Services Tax (GST) and
the impact of increasing legislative
change to make India more
competitive.
Yet as we look further at the
collective of nations historically labeled
“emerging economies”, it becomes
evident that not all are emerging at
the same speed or in the same way.
In South America, both Brazil and
Venezuela, once darlings of global
growth predictions, are faltering as the In Europe, while the shockwaves by interest rates at historic and
consequences of political and economic of the UK electorate’s Brexit decision prolonged lows. Meanwhile, equity
turmoil take hold. Economies such as appear to have dissipated, anticipating markets currently trade at 16-year
Nigeria have suffered a similar fate, the consequences of this challenge highs with rising employment and
exacerbated by falling oil prices, while to the European experiment, and unemployment rates at 16-year
investment appetite across the African the likely outcomes of early Article lows. If the goldilocks situation
continent is retrenching, as evidenced 50 negotiations, remains something changes based on mortgage interest
by a marked fall in the number of stock of a gamble. But this is not the only and personal debt rates rising
market launches or IPOs over the last story; political populism continues faster than expected, if the deficit
couple of years. to promote uncertainty, with social increases or if inflation begins to
divides as present in daily national take hold, the impact on household
discourse as in election campaigning. finance and consumer confidence
Powering this More broadly, the highly cyclical nature could be profound, and the economy
of the European economy remains a could yet stumble.
next revolution is the concern as actions on fiscal policy and
rise of the millennial unwinding stimulus measures from the Demographic revolution
Great Recession remain opaque. There
generation are other dark clouds on the horizon, Powering this next revolution is the
with the state of affairs in both Syria rise of the millennial generation,
Growth in Latin America and and North Korea offering more cause forecast by 2020 to be the world’s
Africa, while still seen by many as an for concern and signs of longer-term largest single demographic grouping,
opportunity for the here and now, is instability, notwithstanding the present as well as the largest demographic in
not for the faint of heart. But in the near state of US-Russia relations. the workplace.
future, as their economies being to In the United States, the economy Notwithstanding the hype
rebound, these regions will once again is defined by the largest personal surrounding this generational cohort,
become very important. debt per capita in history, funded or the vast and conflicting literature and
65%
of US chief executives believe the next
74%
of US chief executives say
three years would be more critical and their organization is trying to
transformational for their industries actively disrupt the sector in
and companies than the past 50 which they operate
Source: Global CEO Outlook, KPMG, 2017
empirical studies seeking to classify about millennials as a discrete quasi- we live to how we work. Yet what
them as a homogenous group, those segment and more about people we’ve witnessed in the decade since
born in and shaped by two profound predisposed to be labeled “millennial the iPhone heralded a new construct
economic crises, technological minded”. After all, isn’t there a little for the human condition is only set to
transformation and new social and bit of a millennial in all of us? accelerate and disrupt further.
employment paradigms, do indeed Baby boomers are also set to As the proliferation of connected
share some underlying traits that are break with the past. Retirement for devices continues to pervade all corners
already permeating wider culture. this cohort won’t be what it was for of society, from how we communicate,
Media consumption is markedly their predecessors, as many choose to how we transact, to how we operate
different from preceding generations either to continue working given our homes or manage our health and
and trust is often found less increasing life expectancies or feel well-being, the next decade or so will
forthcoming, with some 84 percent compelled to do so at the prospect see another billion or more humans
of millennials reporting skepticism of underfunded retirement and rising connected to the internet by 2030,
towards traditional advertising, trusting health and care costs. Moreover, the particularly driven by China and India.
their friends and social media more. wallets of the boomer generation
And while we can find varying patterns are under added pressure from Navigating the storm
by region, millennials own less, rent their millennial children staying at
more, live at home in greater numbers, home longer, returning home or Positively, those charged with
believe in experience, are digital seeking greater financial help to join navigating these dynamic waters are
natives and typically place greater the property ladder. Consequently, aware of what’s at stake. Over the
emphasis on the purpose, values and the expected peak spending years last two years, KPMG’s annual Global
authenticity of the brands they choose associated with empty nesting CEO Outlook has put the spotlight
to transact with or work for. and retirement won’t pan out as on business leaders’ concerns about
In isolation, this has far-reaching expected for all. their changing customer landscapes.
implications, but these are only In our 2016 study, 65 percent of
amplified when we consider the Technological revolution US chief executives told us that
tendency of this group to transfer the next three years would be
their behaviors, tastes and values No commentary on change or more critical and transformational
to others, often their parents in the disruption can ignore the profound for their industries and companies
baby boomer generation. Perhaps in and pervasive impact of technology than the past 50. An overwhelming
the future, we should be talking less on all aspects of our lives, from how 90 percent reported being
This perfect storm isn’t on the horizon;

it’s here and it’s now
concerned about the loyalty of synthesizing the findings that now abroad, both companies have hinted
their customers, while 86 percent embody this report, consumers at expanding their payments apps
were concerned about millennials haven’t stood still, and evidence of with international customers.
and how their differing wants and change is all around us. Despite being largely unfamiliar
needs will change their business. Consider Alibaba Group, whose brands in the West, such moves
And in a sign of putting the 2016 Global Shopping Festival or are early signals of a competitive
organization on the front foot, our Singles’ Day reported a record- collision course involving
latest study published in August breaking $17.8 billion in sales on just established players such as Google
2017 revealed that 74 percent one day, three times more than Black and Apple, as well as the wider
of US chief executives said their Friday and Cyber Monday combined, banking and digital payments
organization is trying to actively and more than the country of Spain’s industry incumbents throughout
disrupt the sector in which they entire e-commerce sales for the Europe and further afield.
operate, rather than waiting to be year. What’s more, 27 percent of Companies are investing to
disrupted by competitors. sales were from international brands compete in the new world;
What’s most important to take or merchants, and an eye-watering consider that the volume of
away from “me, my life, my wallet” 82 percent of sales were made on technology company acquisitions
is the urgency with which businesses mobile devices. by nontechnology companies
need to act. Not next year. Not next Take WeChat Pay and Alipay, increased 263 percent in the four
quarter. Today. subsidiaries of Tencent’s WeChat and years from 2012, reaching a record
The themes and the evidence Alibaba’s Ant Financial, respectively. in 2016 and outstripping, for the first
we’ve explored in this report aren’t With more than one billion registered time, similar acquisitions by other
abstract or distant concepts. They’re users between them, the two technology companies, most with
not clouds building on the horizon that Chinese payments apps have the aim of improving or transitioning
can be further studied by a working recently struck a string of deals with their business paradigm now and
group or a functional team. They carry European banks, enabling millions into the future.
consequences for the here and now, of retailers across the UK, France, This perfect storm isn’t on the
and for those organizations intent on Italy, Germany and beyond to accept horizon; it’s here and it’s now. And for
winning today as well as tomorrow, payments via their apps. Initially those bold enough to concede they
the time to act is now. touted as a means of helping the just might not know as much about
In the months since we began surging numbers of Chinese tourists their customers as they’d want to, the
researching, analyzing and to use their domestic payment apps opportunity is palpable.
Our
methodology The context behind our unique,
multilayered approach to generating
fresh insights
T
raditional research the “why” behind behavior. For
methods work best when both of these areas, we leveraged
the future looks like the extensive research that we have
past, but in a time defined performed across multiple industry
by seismic change and sectors, including consumer and
greater volatility, new ways of thinking retail, banking, insurance, wealth
are needed to reach new insights. management, healthcare, and
To do justice to our most telecoms and media.
comprehensive customer-focused We combine this developing picture
research effort to date, KPMG’s and the ethnographic findings to inform
Innovation Labs developed a multilayer questions for our primary survey, to
research framework, underpinned by test the prevalence of behaviors. Our
the rigor of design thinking for business approach starts with deep qualitative
model innovation. Critically, we don’t research to uncover insights that don’t
rely on any one of these activities alone come out through traditional market
to paint a picture of the future — it’s research, moving from signals, to
in their combination that the sum hunches, to hypotheses that are tested,
becomes greater than its parts. validated and quantified.
We begin by understanding Why does this approach get to better
macro trends, identifying social, answers? Baked into each layer of data
technological, economic and political is an opportunity to check our cognitive
signals of change. We then layer biases and keep exploring the unknown-
on a combination of scientific known and unknown-unknown
data and fact-based historical and territories. Put simply? It helps us go
economic data, before adding original hunting for insights in the right areas,
ethnographic research to understand asking the right questions.
Our
methodology
Trends data Research-led change to Outside-in trends research across industries
Scientific data Scenario-driven

Research strategy
Content strategy
Quantifiable historic data Case studies change to Analysis US, UK, India, and China historical data
Behavioral and ethnographic data Ethnographic interviews
Qualitative and quantitative survey Sector specific change to 10,000 US, US, India and China consumers surveyed
Triangulation and sense making Design thinking for business model innovation
Motivation Attention Watch Wallet

Connection
Characteristics that Ways we direct our How we balance the How we adjust our
How we connect to
drive behavior and attention and focus constraints of time share of wallet
devices, information
expectations and how that changes across life events
and each other
across life events
Contributors
Duncan Avis Dan Coonan Jennifer Linardos
Principal, Advisory, Customer Solutions, US Executive Director, Global Consumer & Retail Global Customer Insights Program Director
davis@kpmg.com danielcoonan@kpmg.com jlinardos@kpmg.com
Anson Bailey Natalie Cousens Belle Morton

Partner, Consumer & Retail Leader, ASPAC Global Marketing and Communication Lead for Director, Head of Customer Advisory,
Hong Kong Customer COE and Customer Insights Program Hong Kong
anson.bailey@kpmg.com nacousens@kpmg.ca belle.morton@kpmg.com
Katherine Black Todd Cullen Rachna Nath

Principal, Advisory, Corporate Strategy, Managing Director, Customer Solutions, US Partner, Head of Digital Consulting Services, India
Consumer & Retail, US tcullen@kpmg.com rachnanath@kpmg.com
kblack@kpmg.com
Deno Fischer Vera Nieuwland
Mark Britnell Principal, Advisory, Customer Solutions, US Director, KPMG Innovation Lab
Global Chairman, Healthcare, KPMG dwfischer@kpmg.com veranieuwland@kpmg.com
International
mark.britnell@kpmg.co.uk Nicholas Griffin Philip Ng
Partner and Head of Global Strategy Group Partner, China
Judd Caplain nicholas.griffin@kpmg.co.uk philip.ng@kpmg.com
Principal, Head of Global Banking
& Capital Markets Laura Hay Jessie Qian
jcaplain@kpmg.com Global Insurance Sector Leader Partner, Head of Consumer Markets, China
ljhay@kpmg.com jessie.qian@kpmg.com
Adrian Clamp
Partner, Customer Advisory Leader, Elisa Holland Aditya Rath
UK Director, KPMG Innovation Lab Partner, Digital Customer, India
adrian.clamp@kpmg.co.uk elisaholland@kpmg.com adityarath@kpmg.com
© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Contributors
Urvashi Roe Mitch Siegel Tim Zanni

Global Executive, Customer Center of Principal, Financial Services Strategy Global and US Technology
Excellence and Transformation Leader Sector Leader
urvashi.roe@kpmg.co.uk msiegel@kpmg.com tjzanni@kpmg.com
Kes Sampanthar Paul Wissmann Christoph Zinke

Executive Director, KPMG Innovation Lab National Sector Leader, Partner, Head of Strategy, China
ksampanthar@kpmg.com Media & Telecommunications, US christoph.zinke@kpmg.com
pwissmann@kpmg.com
Yael Selfin
Chief Economist, UK Scott Wolfson
yael.selfin@kpmg.co.uk Director, KPMG Innovation Lab
swolfson@kpmg.com
Lynne Doughtie Hanson To Bill Michael

Chairman and CEO, KPMG US Chairman, KPMG China and Asia Pacific Chairman, KPMG in the UK
Benny Liu Arun Kumar

Chairman, KPMG China Chairman and CEO, KPMG in India
Citations
Article Page Reference Source
My attention 19 Media creation rates What Happens Online in 60 Seconds, Smart Insights, 2017
Email sent and open rates Email Statistics Report 2015-2019, Radicati Group, 2015
Data growth and information creation rates Big Data: 20 Mind-Boggling Facts Everyone Must Read, Forbes, 2015
My connection 20 Mobile phone adoption Birthday World Wide Web, The Economist, 2014
Disconnection anxiety 20 iPhone and smartphone penetration in the US Technology Adoption, Singularity, 2014
and Internet and American Life Research Study, Pew Research, 2013
21 Nomophobia defined as fear of being without your phone UK Post Office, 2008
Survey results on anxiety when leaving their device at home KPMG Survey with Intuit Research of 10,000 Respondents for Customer Insights Program, KPMG, 2017
Quote from Anchint, 27, Calcutta, India KPMG Innovation Labs with Foresight Factory Ethnographic Research Interviews of 100+ Participants for
Customer Insights Program, KPMG, 2016-2017
Survey results on losing wallet vs phone KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials glancing at device screens KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
The Five Mys profiles 24 Millennials in India anxiety without device KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials in India budget reduced by 10% KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials in India device interruptions KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials and WeChat as preferred platform KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials, payments and WeChat/Alipay payments use KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials and WeChat use KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Gen X, Baby Boomers and WeChat use KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
25 Millennials in India budget reduced by 10% KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials in India budget reduced by 10% KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
26 Baby Boomers in UK preferences around phone vs wallet KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Baby Boomers in UK necessities vs luxuries KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Baby Boomers in UK online behavior KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
27 Baby Boomers in UK online behavior KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Baby Boomers in UK weath management and savings KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
The customer wallet 28 Survey findings around self improvement KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials’ sources of income KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Quote from ethnography KPMG Innovation Labs with Foresight Factory Ethnographic Research Interviews of 100+ Participants for
Generational surfing 32 Millennials’ life event drift KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials’ life event drift KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
35 Millennials’ life event drift KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Millennials’ new life events - paying off student loan debt Press Briefing on Household Debt, with Focus on Student Debt , Federal Reserve Bank of New York, 2017
Millennials’ life event drift Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans, American Student
Assistance, 2015
Millennials’ life event drift Population Composition, Indian Census, 2011

Millennials’ life event drift Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans, American Student
Assistance, 2013
Rise in unmarried women in China Women and Men in China - Facts and Figures, UNICEF, 2012
US student loan debt Consumer Credit (G.19), Board of Governors of the Federal Reserve System, 2017
Baby Boomers’ life event drift More older Americans are working, and working more, than they used to, Pew Research Center, 2016
Baby Boomers’ life event drift More older Americans are working, and working more, than they used to, Pew Research Center, 2016
36 Wealth management gaps More older Americans are working, and working more, than they used to, Pew Research Center, 2016
Baby Boomers’ life event drift Proposed new timetable for State Pension age increases, Department for Work and Pensions, 2017
Baby Boomers’ life event drift The Current State of Retirement: A Compendium of Findings About American Retirees, Transamerica Center
for Retirement Studies, 2016
Baby Boomers’ life event drift The Aegon Retirement Readiness Survey, Aegon, 2015
Western baby boomer 37 Causes of Millennials living with Boomer parents For First Time in Modern Era, Living With Parents Edges Out Other Living Arrangements for 18- to 34-Year-
echo effect Olds, Pew Research Center, 2016
Tech adoption lag in the boomer generation KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Tech adoption lag in the boomer generation KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Industry view 42 Quoting Indra Nooyi, Chairman and CEO of PEPSICO “PepsiCo CEO Opens Up About Trump, Amazon, and that Kendall Jenner Ad”, Fortune, 2017
Data becomes king 44 Quote from ethnography KPMG Innovation Labs with Foresight Factory Ethnographic Research Interviews of 100+ Participants for
Privacy concerns KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
45 Online purchasing trust KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Curated by me, for me 47 Media viewing trends The Nielsen Total Audience Report, Nielsen, 2016
Media viewing trends Z-File:Executive Insights, Zogby Analytics, 2014
Survey findings KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Active devices globally More than Six Billion Smartphones by 2020, IHS Markit Says, IHS Markit, 2017
Media viewing trends Parks Associates Announces Top 10 Subscription OTT Video Services in the U.S. Market, Parks Associates,
2017
Media viewing trends Parks Associates Announces Top 10 Subscription OTT Video Services in the U.S. Market, Parks Associates,
2017
Cost of subscriptions The NPD Group: Average Monthly Pay-TV Subscription Bills May Top $200 by 2020, NPD, 2012
48 Binge watching description Binge Viewing: TV’s Lost Weekends, The Wall Street Journal, 2012
Sporting event rights purchase Twitter Gets NFL Thursday Night Games for a Bargain Price, Bloomberg Technology, 2016
Sporting event rights purchase NFL and Amazon Reach One-Year Streaming Deal for About $50 Million, The Wall Street Journal, 2017
The empowered patient 49 Quote from ethnography KPMG Innovation Labs with Foresight Factory Ethnographic Research Interviews of 100+ Participants for
50 Talent gap in healthcare Global health workforce shortage to reach 12.9 million in coming decades, WHO, 2013
Shift in definition of health Health + Wellness 2017, The Hartman Group, Inc., 2017
Patient centricity in Healthcare Dr Ed Fitzgerald, Global Healthcare Executive to KPMG’S Health Practice Global Chairman
Technology and security in healthcare Mark Britnell, Senior Partner and Global Chairman, Healthcare, KPMG International
51 Health tech in China Digital Health - Investors begin to sour on Chinese Health apps, Financial Times, 2017
Health tech in China Digital Health - Investors begin to sour on Chinese Health apps, Financial Times, 2017
Health tech in China Digital Health - Investors begin to sour on Chinese Health apps, Financial Times, 2017
In search of a simplified 53 Big bank apps KPMG Innovation Labs with Foresight Factory Ethnographic Research Interviews of 100+ Participants for
financial life Customer Insights Program, KPMG, 2016-2017
Reorienting around the person, 56 Ladder Life Ladder Introduces Life Insurance Built to be Instant, Simple and Smart, PR Newswire, 2017
not the risk
57 Trov AXA teams up with Silicon Valley start-up Trov to deliver market first in ‘on-demand’ insurance, AXA, 2016
Arity Allstate Launches Tech Startup Arity to Power Transportation Analytics and Innovation, The Allstate
Corporation, 2016
Zhong An Exclusive - hong An plans to sell 5-10 percent stake ahead of IPO - sources, Reuters, 2017

United States: a brave 59 Population in the US United States Census Bureau, 2016
new world
GDP in the US The World Bank, 2017
Internet penetration in the US United States Internet Users, internet live stats, 2016
Smartphone usage in the US Statista, 2017
US economy Why the U.S. economy could keep growing until 2020, CNN Money, 2016
Job growth in urban vs. rural Rural Employment and Unemployment, United States Department of Agriculture, 2017
60 Millennial early adoption KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Amazon Prime users Sixty-Four Percent Of U.S. Households Have Amazon Prime, Forbes, 2017
Facebook users Statista, 2017
Google driving search traffic Search Engine Market Share United States Of America, Statcounter, 2017
iPhone users US iPhone Users, 2014-2016 (millions, % change and % of total smartphone users), eMarketer, 2016
Start-up costs Startups and accelerating corporate innovation, CB Insights, 2015
Housing prices increase American house prices: realty check, The Economist, 2016
Industry shifts in urban areas KPMG analysis, Pitchbook and CB Insights, 2017
61 Quotes from ethnography KPMG Innovation Labs with Foresight Factory Ethnographic Research Interviews of 100+ Participants for
62 Decrease in trust in traditional advertising Global Trust in Advertising, Nielsen, 2015
Experiences increasingly prioritized over material possessions, Why Americans are Spending More on Experiences vs Buying Stuff, Fortune, 2016
especially for millennials
Rise in social influencers This Is The Future Of Influencer Marketing, Forbes, 2017
63 Highest media and digital media consumption compared to China, US Time Spent with Media, eMarketer, 2017
India and the UK
Non-digital TV still biggest media consumption channel but mobile US Time Spent with Media, eMarketer, 2017
increasingly displacing desktop/laptop
News consumption through social media increase, precipitating rise The Filter Bubble Revisited, Slate, 2017
Smartphone adoption near universal Evolution of Technology, Pew Research, 2017
Explosion of platform companies and adoption The Center for Global Enterprise, The Cage, 2017
IoT and AI taking off AI Takes Off, MIT Technology Review, 2017
Blurring lines between work and personal life The Line Between People’s Work and Nonwork Lives Continues to Blur, American Psychiatric Association,
2015
Delay in traditional household formation Census Results, US Census Bureau, 2017
Increase in on-demand services, spending and expectations The OnDemand Economy is Growing and Not Just for the Young and Wealthy, Harvard Business Review, 2016
High student debt Press Briefing on Household Borrowing, Student Debt Trends and Homeownership, Federal Reserve Bank of New
York, 2017
Stagnant real wage growth US Job Growth Slows in August, Reuters, 2017
Generational wealth transfer The Great Wealth Transfer has Started, CNBC, 2016

United Kingdom: 64 UK market ranking for Google Alphabet - owner of Google - takes top spot from Apple, BBC, 2016
the connected consumer
UK market ranking for eBay eBay pays £1.1m UK tax on revenues it told US investors were £1.1bn, The Guardian, 2016
UK market ranking for Amazon Amazon continues heady UK expansion with new distribution centre, Reuters, 2017
E-commerce percentage of GDPs by country Global Ecommerce Report 2017, Ecommerce Foundation, 2017
Online to offline purchases Survey of 2000 UK shoppers, Cybertill OnePoll, 2016
65 UK city house pricing UK Cities House Pricing Index, Hometrack, 2017
Online retailing in Europe, the US and Canada Online Retailing: Britain, Europe, US and Canada 2017, Centre for Retail Research, 2017
Quoting Tim Knight, Managing Director, KPMG Nunwood KPMG Customer Experience Cloud, KPMG Analysis, 2017
68 Decrease in trust in traditional advertising Consumer Trust in Traditional Advertising Declines in UK, Nielsen, 2015
High on-demand expectation, but value driven Survey of 984 online respondents age 16+, Foresight Factory, 2016
Lower trust in media than the US, China or India Survey of 984 online respondents age 16+, Foresight Factory, 2016
Lower time spent with digital media compared to the US, India, China WeChat Users in China, eMarketer, 2017
Fastest adopter of digital in Europe, expected to tip non-digital media WeChat Users in China, eMarketer, 2017
consumption in 2018
News consumption through social media increase, precipitating rise How Social Media Filter Bubbles and Algorithms Influence the Election, The Guardian, 2017
69 WhatsApp and Facebook usage dominant for social KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
High use of contactless card payment and increase in mobile payments Cash No Longer King as Contactless Payments Soar in UK, The Guardian, 2017
e-commerce and click-and-collect growth continuing Report: Click and Collect UK, Verdict, 2016
Delay in traditional household formation Families and Households: 2015, Office for National Statistics, 2015
Shorter work week hours compared to the US, India, China, but Work Life Balance, OECD Work-Life Balance, 2016
increasing concern with work-life balance
High and increasing commute times for the UK workforce Daily Commute of Two Hours is Reality for 3.7m UK Workers, The Guardian, 2016
Wealth primarily owned by Baby Boomers Will the Baby Boomers Bankrupt Britain?, The Independent, 2011
High student debt Debt and Repayment Statistics for England, Student Loans Company, 2017
House prices in England, and particularly London, increasing UK Cities Housing Price Index, Hometrack, 2017
India: leapfrogging towards a 71 Population in India The World Bank, 2017

digital economy
GDP in India The World Bank, 2017
Internet penetration in India Statista, 2017
Smartphone usage in India Statista, 2017
Population in India World Population Prospects, United Nations, 2015
Population in India World Population Prospects, United Nations, 2017
Mobile payments in India KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
Demonetization announcement Full Text of Indian Prime Minister Narendra Modi’s Speech on Replacing Largest Rupee Notes, The Wall Street
Journal, 2016
72 Mobile payments in India *99# Product Overview, National Payments Corporation of India, 2016
Quote from ethnography KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
74 Discount and cashback driven, looking for the best deal Consumer Behaviour and Branding, The Indian Context, S. Ramesh Kumar, Indian Institute of Management
Bangalore and Pearson Education, 2009
Young population with high percentage of millennials Mary Meeker, KP Internet Trends, 2017
Rising trend towards individualism The New Indian: The Many Facets of a Changing Consumer, BCG, 2017
74 Lowest time spent with media compared to the US, the UK, China WeChat Users in China, eMarketer, 2017
TV still dominant but digital increasing, especially mobile WeChat Users in China, eMarketer, 2017
Mobile entertainment and live streaming on the rise Mary Meeker, KP Internet Trends, 2017
75 Lower cost of mobile data fueling dramatic increase in mobile data usage Mary Meeker, KP Internet Trends, 2017
Rise of online market places (Flipkart, Snapdeal), and WhatsApp and Mary Meeker, KP Internet Trends, 2017
Facebook as dominant social platforms
Connect with brands via social media 2017 Connected Life Study, Kantar TNS, 2017
High level of women not participating in the workforce Mary Meeker, KP Internet Trends, 2017
Relatively low number of vacation days, leisure time seems to become 2011 Vacation Deprivation Study, The Times of India, 2011
increasingly important
Average time spent in school is less Mary Meeker, KP Internet Trends, 2017
Demonetization driving move to digital wallet and payments are Mary Meeker, KP Internet Trends, 2017
leapfrogging, but cash is still vital
Growing middle class 6 Surprising Facts About India’s Exploding Middle Class, World Economic Forum, 2016
Eastern baby-boomer echo effect 77 Life event drifts The World Bank, 2017
Life event drifts Supplemented nuclear families make 16% of Indian households, The Economic Times, 2017
China: window into the future 80 Nuclear families rising Supplemented nuclear families make 16% of Indian households, The Economic Times, 2017
China’s migration to urban Urbanization and Urban Villagers: Institutional Factors and Social Identity in Urban China, 2015
China’s growing middle class The Emerging Middle Class in Developing Countries, Brookings Institution, Brookings Institution, 2011
China’s growing upper class, shrinking lower class The Chinese consumer in 2030, EIU, 2016
China’s growth and impact to global economy Benny Liu and Honson To, Chairmen of KPMG in China
Connected customers and smartphone payments China’s Connected Consumers 2016, KPMG Huazhen LLP, 2016
81 China’s 5-year plan goals The 13th Five-Year Plan For Economic And Social Development Of The People’s Republic Of China, Central
Committee of the Communist Party of China, 2016
82 Connected and ‘social’ consumers China’s Connected Consumer, KPMG analysis, 2016
Instant messaging with brands on the rise Survey of 1000-5000 online respondents age 16-64, Foresight Factory, 2015
New influencers like bloggers, videos and live stream shopping WeChat Users in China, eMarketer, 2017
embedded in business models
3rd compared to the US, the UK and India in time spent with media WeChat Users in China, eMarketer, 2017
Digital exceeds nondigital consumption, driven by mobile. TV in fast decline WeChat Users in China, eMarketer, 2017
WeChat has a highly engaged user base for news. Live streaming is WeChat Users in China, eMarketer, 2017
on the rise
83 Fast growth in mobile adoption WeChat Users in China, eMarketer, 2017
High-tech giant online platform adoption, inc. e-commerce The Center for Global Enterprise, The Cage, 2017
Still growing sharing economy, on-demand and express delivery services Embracing the Sharing Economy for Growth in China, TechCrunch, 2016
Delayed household formation and upcoming shortage of time to spend The Future of Families 2030, OECD International Futures Programme, 2011
caring for the elderly
Increase in time spent traveling Chinese Tourists Spent 12% More in Travelling Abroad in 2016, United Nations World Tourism Organization,
2017
Increasing service economy: DIFM > DIY China Says Its Service Sector Has Grown 8.2% So Far This Year, Fortune, 2017
Growing middle class The Emerging Middle Class in Developing Countries, Brookings Institution, 2011
Financial dependency of the elderly on their children China’s Aging Population Becoming More of a Problem, Forbes, 2017

One app to rule them all? 85 WeChat usage Number of monthly active WeChat users from 2nd quarter 2010 to 2nd quarter 2017 (in millions), Statista,
2017
WeChat usage KPMG Survey with Intuit Research of 10,000 respondents for Customer Insights Program, KPMG, 2017
WeChat usage Number of monthly active WeChat users from 2nd quarter 2010 to 2nd quarter 2017 (in millions), Statista,
2017
WeChat usage WeChat Users in China, eMarketer, 2017
A perfect storm 87 China urban population 2030 China’s Urban Billion, Zed Books Ltd, 2012
India population out of poverty 2030 70% of India’s population could be middle-class by 2030: Report, Business Today, 2015
88 Millennial population and workplace statistics Millennials overtake Baby Boomers as America’s largest generation, Pew Research, 2016
Connected consumer forecasts for China The Chinese consumer in 2030, EIU, 2016
Equity markets at 16 year high Bloomberg Markets, 2017
Millennial trust levels in traditional advertising Engaging Millennials: Trust and Attention Survey, The McCarthy Group, 2014
89 Insights from KPMG Global CEO Outlook Global CEO Outlook, KPMG, 2017
Alibaba Group Singles’ Day Sales Alibaba’s Singles Day is Amazon’s Prime Day — on steroids, CNBC and eMarketer, 2017
Alibaba Group Singles’ Day Sales Singles’ Day Scorecard, Forbes, 2016
WeChat and Alipay user metrics Is WeChat Pay Taking Over Alipay?, Forbes, 2017
Technology acquisitions by nontechnology companies over time Startup acquisitions data, Pitchbook, 2017
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in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
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Publication name: Me, my life, my wallet
Publication date: February 2018

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Me,

customer behavior — motivation, » 05 My wallet How consumers Customer wallet

The three dimensions of how Influencing

The multidimensional customer Customer centricity Chasing customers

A closer look at the signals of change

Generational surfing 32–37

Life event drifts 38–39

and actions — and a preview of

While greater anxiety is associated with losing one’s wallet globally,

Percentage who would rather lose phone China India UK US

Percentage who would rather lose wallet

29% 57% 61% 74%

millennials glance at their phone screen

First thing I do in First thing I read in of millennials in China open

in the morning is check what 26%

notifications I got. If I posted

Trust in platforms and devices used regularly

Payment methods used

72% 90% 72% 88% 38% 60% 34%

Frequency of using mobile device to pay for goods and services

Total US UK China India

Boomers 1940–1965 Gen X 1965–1980 Gen X 1965–1980 Millennials 1980–2000

Low unemployment Tax cuts Comprehensive Northern UK

70% 41% 30% 48% 77%

Find ways to make it easy for me to

The sheer volume of information,

Knowing how to get

» How do I help customers get

Getting smarter about

Often in a symbiotic relationship with » How do I identify how my customers

The Five Mys profiles

Millennial comparison: India

Shikha, 32, millennial

My connection My attention My connection My attention

Tom, 68, boomer

My connection My attention My connection My attention

In India, the figure

Share of wallet by generation

Millennials (1980–2000) Gen X (1965–1980) Baby boomers (1940–1965)

Leisure and entertainment

Health and well-being

Savings and investments

Source: Innovation Lab at KPMG Ignition, KPMG in the US

The customer wallet

Consumer loans Home improvement

Student loans Food and beverage

Clothing Loyalty programs

College and education Delivery

Leisure Platform business models

Pets Source: Innovation Lab at KPMG Ignition, KPMG in the US

generations approach and move and liberation. Notwithstanding the

The trade-off between time and money between generations

Student Single Married/ Kids Empty Retirement

Salary increase + Prime saving years Retirement

More free time Some free time More free time

The way I learn is

UK US Fast forward to the present, shared the wonders of Amazon Prime

Life event drifts

HS College First First child

Birth First job First house All children Last child

HS College First First child All children

Birth First job First house Last child

HS College First house First child