Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. THE QUEST FOR CONVENIENCE2Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. Rising internet penetration, denser urban locations, faster paced lifestyles and challenging working hours are adding more and more layers of complexity to consumers lives. According to the World Health Organization, “workplace stress is the health epidemic of the 21st century,” and multiple agencies have tracked the steady rise of anxiety related illnesses around the world. Consumers are feeling more stretched than ever before, and are increasingly striving for convenient solutions which help to simplify their busy lives. Around the globe, consumers need and look for convenience in all formswhether simplicity, time saving or suitability. When it comes to the fast-moving consumer goods (FMCG) space, convenience is not only about store formats, products or packaging. It means more than the latest technologies or new engagement strategies. Rather, it is about every encounter, interaction and action that can help fulfil consumers growing demand for efficiency. The Nielsen Quest for Convenience report looks at changing consumer needs around the world, specifically focusing on factors driving consumers increasing need for convenience, to provide global FMCG players with key insights, indicators and solutions to successfully tap into the rapidly rising need for convenience. SATISFYING MOMENTS OF TIME WITH EFFORTLESS EXPERIENCES THE QUEST FOR CONVENIENCE IN TODAYS HYPERCONNECTED WORLD, CONVENIENCE IS THE ULTIMATE CURRENCY.3Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. Around the world, todays consumers are leading increasingly hectic lives, and work-life balance is regularly cited as one of their biggest concerns (1) . Busy consumers are demanding products, places, spaces and processes to help overcome everyday obstacles to effortless living. Shortcuts, cheats, easy-to-use, automated, intelligent and digitised options for every conceivable lifestyle item, incident and interaction are the order of the day. This growing demand for convenience presents manufacturers and retailers with myriad opportunities. New, innovative and integrated convenience solutions are being brought to market at speed to address multiple consumer challenges. However, for sustained success, companies will need to adapt and enhance their convenience solutions as consumer needs rapidly evolve. To do so effectively means being ahead of the game understanding, before your competitors do, how consumer demand will change and what solutions will help. Today, convenience transcends products, services and store channels. Packaging, preparation, storage, portability, disposal, ordering, replenishment and fulfilment, as well as device, payment and application technologies are all key considerations in providing an overall convenience experience. THE HYPERCONNECTED, HYPERLIFE OF TODAYS CONSUMERS CONSUMERS REQUIRE LESS TO DO MORE FOR SUSTAINED SUCCESS, COMPANIES WILL NEED TO ADAPT AND ENHANCE THEIR CONVENIENCE SOLUTIONS AS CONSUMER NEEDS RAPIDLY EVOLVE4Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. RE-DEFINING CONVENIENCE Nairobi, near future: Its early in the morning and youre walking to the taxi rank to catch a ride to work. You stop at the corner kiosk to purchase a ready-made cup of tea, a few slices of fruit for breakfast and a tube of glue to repair your shoe. You use M-Pesa (mobile money) to pay the bill and flag down the matatu (taxi). During the commute you transfer money to your son up-country to buy stationery for school and then you connect to the taxi wi-fi to watch highlights from last nights football game. Upon arriving at your destination, you settle your taxi fare via M-Pesa.London, near future: Youre heading home after a long day at the office. Your connected watch assesses traffic conditions and identifies quick- service restaurants nearby. It selects a restaurant and meal based on your dietary preferences and a scan of your vital signs to ensure an appropriate calorie intake. The watch orders the food, pays the bill via your connected wallet and then navigates a drone to meet you on your walk to the train station. By the time you reach home your watch has received a discount coupon for your next visit to the restaurant. As these scenarios show, convenience means different things to different consumers. Circumstances, culture, location, market maturity and technology are key influences and are driving the need for FMCG convenience solutions tailored to cater to different segments of society and geographical areas. No matter where or for whom, at its essence, convenience has three core attributes: ease, utility and simplicity. In providing these, convenience solutions can enable more fulfilment, enjoyment and balance in consumers busy lives. To deliver true convenience, these three attributes must be the foundation for the entire consumption, shopping and engagement spectrum. EASE UTILITY SIMPLICITY5Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. SATISFYING DEMAND FOR EASE, UTILITY, SIMPLICITY PRIMING THE NEED FOR CONVENIENCE ENHANCING CONSUMPTION, SHOPPING AND ENGAGEMENT EXPERIENCES HOW CAN COMPANIES BEST PROVIDE CONVENIENCE? WHAT SOLUTIONS ARE CONSUMERS SEEKING? WHAT IS DRIVING CONSUMER LIFESTYLE CHANGES? CONVENIENCE UNVEILED6Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.ANTICIPATE CHANGE: WHATS DRIVING CONVENIENCE? Many factors, or drivers, are influencing the growing global demand for convenience. Although the convenience trend is evolving in various ways and at different speeds depending on the region or country, it is happening nearly everywhere in the world. By understanding what drives convenience across various marketplaces, FMCG companies can question assumptions, create better strategies and develop agile, forward-focused plans to satisfy consumer demand. Six key drivers of change are shaping the need for convenience solutions and can be used as a foundation for identifying future needs: 1. Rapid Urbanization 2. Smaller Households 3. Crowded Transport 4. Evolving Gender Roles 5. Generational Needs 6. Uptake of Technology1. RAPID URBANIZATION Throughout the world consumers are flocking to urban areas in search of greater employment prospects, better infrastructure and services, and a wider array of lifestyle options. By 2025, 58% (2)of the worlds population will live in cities or towns thats 752 million more people than today. Half of these additional people will be in Asia and nearly a quarter in Sub- Saharan Africa. The most urbanised regions in 2025 will be North America (83%), Latin America (82%) and Europe (75%) (2) . But other regions will continue to urbanise at a faster rate, especially Asia, Sub-Saharan Africa, the Middle East, North Africa and Pakistan. The majority of consumers already live in cities and towns and the evolving structure of urban living environments increasingly means a faster pace of life with more demands on consumers time. To better cope with urban lifestyle challenges, consumers will continue to seek new ways to streamline their lives. In their convenience choices, consumers KEY QUESTIONS TO CONSIDER: How might each driver of change influence our consumer and retail environments? How will a combination of these drivers play out? What is the expected impact on consumption, shopping and engagement? How should our company respond?7Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. will want more efficiency and greater utility and will increasingly use advanced technology, where available, to aid their decision making. FMCG companies need to leverage intuitive technology to identify the key consumer touchpoints and provide solutions that help consumers meet their needs.2. SHRINKING HOUSEHOLDS With increasing population density, limited space for new housing and high property prices, many consumers are downsizing their physical living areas. The need for big homes is also decreasing as a result of smaller or single-person households, especially in more mature markets. Homes in South Korea the worlds third most densely populated country average just 725 square feet. Meanwhile, the average household size there is currently 3.1 people and we expect this figure to drop to 2.4 by 2025 (3) . Worldwide, the average household size ranges from two to nine people (2)and is declining as fertility rates continue to fall. These trends are driving a shift in consumer behaviour. In smaller dwellings, for example, meal preparation, storage, disposal and eating areas need to be rationalised and this is seeing consumers reconsider their product choices, usage patterns and shopping dynamics. FMCG companies will need to focus more on space-saving packaging, multi-usage products, single-serve offerings and optimal family-sized meal options. 3. CROWDED TRANSPORT Limited land and high investment costs are major barriers for many urban areas to develop the transport infrastructure needed for their fast growing populations. In many cities, congestion is increasing, car ownership is declining and consumers are increasingly spending more time in commuting on public or shared transportation. Globally, consumers average two hours of commuting everyday (4) , with city dwellers in developing countries such as Mexico, Thailand, Indonesia, China, Turkey and Brazil face the most congestion and longest commutes globally (5) . With more time spent “on the road,” consumers have less time at home for cooking and cleaning, and meals are often consumed on-the-go. Consumption and shopping choices are evolving to match their busier lives, opening up opportunities for manufacturers and retailers to consider more multi-tasking home products, ready-to-grab meals in transit and transport zones, as well as e-commerce opportunities for commuter shopping.8Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.4. EVOLVING GENDER ROLES Today, 53.8% of working-age females participate in the labour force, up from 50.2% in 1980 (6) . This trend is occurring in countries around the world, and across all socioeconomic groups. With more women in the labour force, the traditional role of women to take care of shopping, cooking and other domestic duties is shifting to a shared role between men and women. And with the increase in dual working couples, convenience is factoring more importantly in their choices. Manufacturers and retailers need to understand how shopper roles are evolving and execute new marketing strategies to suit consumer demand across genders in order to win a share of wallet. 5. GENERATIONAL NEEDS People today are living longer than ever before and the global proportion of consumers aged over 50 is increasing, especially in the more developed countries. In North America and Europe, almost 40% (2)of the population will be aged over 50 by 2025. Meanwhile, in some regions, younger generations will remain the dominant age segment. For example, consumers aged 19 years or younger will comprise 51% of the population in Sub-Saharan Africa in 2025 and 40% in the Middle East, North Africa and Pakistan (2) . Shifting age demographics also drive changes in consumer behaviour. Technology adoption, spending ability and spending focus varies considerably between generations and their convenience needs differ too. For example, in markets with ageing populations, easy-to-open packaging and home delivery may be more highly sought after, while in markets dominated by the millennial segment, consumers are more likely to look for space saving packaging, ready-to-eat meals and automated offerings. For the infant and school age households, healthy snacking and lunch box options may become more important to consumers. A solid understanding of evolving demographics in markets is essential for FMCG companies to tailor their convenience offerings to the needs of different age segments. 9Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.6. UPTAKE OF TECHNOLOGY “TECHNOLOGY IN THE FMCG MARKET IS AT THE HEART OF CONVENIENCE. IT IS ESSENTIAL FOR MATCHING CONSUMER DEMAND FOR PRODUCTS AND SERVICES THAT ARE RIGHT HERERIGHT NOWAND RIGHT FOR ME” PEDRO MANOSALVA RETAIL VERTICAL, DEVELOPING MARKETS, NIELSEN“To date, most solutions are based on consumer search matching solutions to a consumers geo-location,” adds Manosalva. “But consumer inputs are becoming increasing automated, factoring in consumers past purchases and preferences, connecting to other parts of their lives including health considerations, price history, daily schedules and much more. Soon consumers will simply get a prompt from their device asking whether it should order a salad to be picked up at the store as they travel to their 1:30 p.m. meeting. This type of customization and programmatic consumption based on consumers data wont just happen in mature markets either. It is equally relevant in emerging markets as local players adapt to circumstances and connectivity via internet and personal devices continue to grow.” The scope and scale of technology has exploded in recent years, driving a fundamental transformation in the way consumers incorporate and utilise digitisation in their lives. Global internet access will reach 52% by 2020 (7) , while growing smartphone penetration and the rise of smart homes, buildings and cities, in both virtual and physical worlds, will escalate consumer capability and connectivity to services and help streamline their lives. In this increasingly “on-demand” environment, consumers will have more control to customise, personalise and summon products and services where and when they need them. Retailers and manufacturers will need to match these “in the moment” needs, leveraging individual data to develop solutions for, and deeper relationships with their consumers.10Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. WHAT SOLUTIONS ARE CONSUMERS SEEKING? Consumers dont articulate “convenience” as the ultimate outcome they seek. Instead, they express the different activities within their day that they are trying to manage with greater ease, simplicity and utility. The major convenience solutions consumers are seeking can be framed under three core areas for FMCG businesses: consumption, shopping and engagement. Equipped with this knowledge, manufacturers, marketers