The Opportunities of America’s Next Commercial Revolution

After a tumultuous decade featuring the rise of e-commerce and m-commerce, and the challenges of developing a full omnichannel experience, retailers may be hoping for smoother sailing to come. However, our A.T. Kearney study, America’s Next Commercial Revolution: Influence vs. Affluence, shows an oncoming gale — and without the right preparation and tactics, some companies could get blown far off course.

Once driven by mantras such as “I am what I own,” consumers will be increasingly interested in creating change and building communities through the influence and wallets of their social networks. With the new mantra, “I am what I do,” they’ll be moving from affluence to influence.

We studied this shift as part of our Consumers@250 initiative, seeking to describe what American consumers will look like in 2026, when the nation celebrates its 250th birthday. At that point, the emergence of Generation Z (those born between 1998 and 2016) from a cultural outlier to an economic powerhouse will be nearly complete.

Gen Z’s oft-discussed characteristics include being more diverse, more urban and more unequal than predecessors. With childhoods shaped by the 2008 financial crisis, they’re more likely to distrust the establishment, including brands. But perhaps most significantly, their world has always been not only digital, but also socially networked.

Where their predecessors lived by top-down rules, in which change, messaging and definitions of value flowed from a small number of experts to a vast mass market, the Gen Z world is more bottom up, full of smaller, self-selecting nodes of community, each with unique influencers and dynamics. We see its beginnings today with trends such as crowdsourcing, Kickstarter and open innovation.

As a result, markets of the future can no longer rely on the inherent value of products and efficient transactions. They must turn to trust-based relationships with shared lifestyles and values. Marketing will be more personalized, and business models more dynamic. Commerce will thrive on three new principles: influence, personalization and trust.

• Influence is the ability to move markets through the outsized power of an individual voice. As traditional boundaries such as geography and media access have fallen, individuals gain an unprecedented opportunity to exert this influence at scale.
• Personalization rejects the one-size-fits-all mentality. Consumers will increasingly center on who they are and then find purchases to express that character. This is a subtle but profound difference from the old method of centering on purchases to find out who you are, usually in context of the crowd.
• Trust is the new consumer currency. Previous generations had relatively anonymous interactions with retailers, centered on transactions. With the explosion of data and personalization, however, relationships with retailers are more dependent on trust.

To meet these new consumer demands, retailers must capture data in the least intrusive manner, and then create new models and metrics to translate data into insights about needs and desires. They must redefine scale, abandoning the search for a 100-million-customer market and instead develop consumer cohorts into multiple smaller community-based markets that can be managed concurrently.

For many retailers, these actions require cultural change — e.g., thinking more about trust and maximizing the ability of employees to innovate and create community. Indeed, success will require fundamental and radical rethinking of product development, sales, marketing, HR, IT, and more. However, the most important transformation is in customer service: it’s now a new culture for front-line retail associates who interact with consumers throughout the transaction journey.

Companies will need to embrace a cultural shift to become more data-driven, flexible, lean and innovative. That may sound like a tall order, but given the size of the headwinds, it’s an essential one.

Greg Portell is the lead partner for A.T. Kearney’s Consumer Products & Retail Practice in the Americas. He can be reached at greg.portell@atkearney.com.