Mass to micro

Moving away from a mass approach

Post-World War II, the consumer industry, from retail to automotive, evolved to meet a specific set of “more”-focused requirements: more consumers, more consumer spending, growing GDP, and expanding geographic markets. That era’s consumers, largely middle class had relatively uniform preferences, central to a bell curve of shared demographics and cultural norms. Competition in the industry hinged on scarcity, so requirements were focused on distribution, product availability, and scale, catering to a relatively homogenous market with few choices.¹

THE FOUNDATIONAL REQUIREMENTS THAT ONCE DROVE THE INDUSTRY ARE NO LONGER ADEQUATE TO MEET FUTURE DEMANDS.

Consequently, the industry was built on economies of scale, mass production, mass distribution, and mass marketing. This approach worked within these market dynamics, but now, as we look to the future, the requirements on the horizon appear to be very different than those for which the industry and traditional organizations were built.

Today’s diverse consumer profiles and a fragmented tech-driven market are driving many in the industry to transition from a supply-focused to a demand-driven model. This pivot marks an important transition from mass-market approaches to strategies that can prioritize relevance for specific consumer groups. For many consumer industry organizations, they refer to this as striving to provide her with “what she wants, when and where she wants it.” We refer to this shift as an industry moving from mass to micro. While at first read, this may sound like micro-targeted marketing, how a consumer company builds highly relevant offerings and becomes more consumer-centric moves well beyond personalized marketing. 

The shift from mass to micro can affect the heart of the business, crossing the value chain, including functions like real estate, merchandising, experience design, menu management, new product development and customization, pricing, inventory, maintenance, and more. Our research indicates that this is merely the beginning, with unprecedented changes looming and forces accelerating the industry toward a more consumer-centric, fragmented, complex, and demand-driven future.²

The six forces

Over the past two decades, the consumer-facing industries have acclimated to an environment where change seems to be constant. Confidence that your organization has learned to navigate this environment may be comforting, but the next 10 years could potentially eclipse the changes of the past in terms of scope, speed, and intensity. Through our client experience, we’ve identified six major forces³ that are expected to drive consumer market shifts in the coming years. Through this work, it has become clear that the industry may face unprecedented degrees of economic, demographic, technological, political, and cultural change—and it is poised to happen simultaneously.

The result could be a highly complex mosaic of consumers, increased competition, and a level of technology-enabled complexity that could likely redefine the industry for years to come. 

Examples of unprecedented change:

• Generation Alpha will be the first generation in US history in which the white demographic is not the majority. The youngest generation born today is roughly 48% white —making it the most diverse generation ever.⁴
• The racial makeup of the five largest US markets by GDP—accounting for nearly 50% of US GDP (Florida, Texas, California, Illinois, and New York) is looking vastly different, with the Gen Alpha population of 32% non-Hispanic white people (down from a cross-market average of 78% of baby boomers ).⁵
• The largest and most concentrated wealth accumulation to ever occur happened in the last 10 years. This massive wealth accrual, primarily among baby boomers, is making the wealth gap much more pronounced along generational lines. Between 1989 and 2019, the median household wealth of families headed by 65 to 75-year-olds grew by 54%, while wealth in families headed by 25 to 35-year-olds declined by 11%.⁶
• For the first time in US history, the population will include more people age 65 and older than under 18.⁷
• Women, for the first time in history, are projected to control more wealth than men (from 49% in 2019 to 65% by 2040).⁸
• The fertility rate in the United States is now below the replacement rate, implying a future with potentially “less” and not “more.”⁹
  

These shifts no longer are represented by a standard bell curve, but instead demonstrate dramatic diversity in the needs, wants, sizes, tastes, and desires of the new consumer. Gone are the days of the “average” consumer. Today we are witnessing a new battle for consumers that is happening at a more granular level.

The mass to micro future

The consumer industry’s evolution from a mass-market approach to a more nuanced micro-focus necessitates a fundamental shift in the way businesses make decisions. Future operations likely will require a transformation from mass, periodic, manual, and reactive decision-making to a more dynamic model that is continuous, automated, and predictive. This shift signifies a departure from traditional, hypothesis-led strategies, ushering in an era of data-driven, real-time adaptability.

Embracing this change is more than a strategic choice; it is also likely an important move for sustained relevance and growth in the rapidly changing consumer landscape. The journey toward a micro-focused approach requires a broad reevaluation of operational processes, leveraging technological advancements and insights from vast data pools. This evolution marks a paradigm shift that is increasingly in line with the industry’s future trajectory: moving those organizations that adapt to the forefront of consumer engagement and market innovation.

This path, while challenging, offers a significant opportunity for businesses to refine their agility, develop innovative strategies, and excel in their market offerings. The leaders in this new era will likely be those who can effectively integrate continuous, automated decision-making with agile, real-time execution. By doing so, they can navigate the complexities of today’s market and potentially set new benchmarks for success in an ever-evolving consumer industry.

1. Kasey Lobaugh et al., Buying into better: The future of the consumer industry, Deloitte, 2023.
2. Ibid.
3. Six forces shaping consumer markets and consumer industry | Deloitte US
4. The Annie E. Casey Foundation (AECF), “What is Generation Alpha?,” AECF Blog, updated January 19, 2024.
5. Kids Count Data Center, “Population by birth cohort generation and race and ethnicity in United States (2017–2022),” AECF, last updated July 2023.
6. Cheyenne DeVon, “Here’s Americans’ net worth at every age—for people under 35, it’s up 142%,” CNBC, October 28, 2023.
7. Jonathan Vespa, Lauren Medina, and David M. Armstrong, “Demographic turning points for the United States: Population projections for 2020 to 2060,” Current Population Reports, P25-1144, US Census Bureau (Washington, DC, 2020).
8. Elizabeth Dennis, “Women, wealth and investing—a story of evolution,” Morgan Stanley, June 28, 2022.
9. Vespa et al., “Demographic turning points for the United States: Population projections for 2020 to 2060.”
10. Cliff Saran, “Stanford University finds that AI is outpacing Moore’s Law,” Computer Weekly, December 12, 2019.
11. Meredith Somers, “How generative AI can boost highly skilled workers’ productivity,” MIT Sloan Management, October 19, 2023;
12. Ethan Mollick, “Secret cyborgs: The present disruption in three papers,” One Useful Thing Substack, March 8, 2023.