Future Enterprise

Identifying Opportunities in the Growing Consumer Addressable Market

The Consumer Market Model quantifies consumer engagement and spending across dozens of opportunities, and IDC can help target opportunities through custom segmentations, competitive analysis, and consumer needs assessments.
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IDC’s Future Consumer team just released the latest version of the Consumer Market Model (CMM). The CMM is a unique dataset that provides insight into the size of the consumer market and opportunities in individual market segments.

The data set quantifies the future consumer by providing the following data points: socioeconomic profile, internet users, home internet access, devices used to access the internet, hours spent online, internet user online activities of dozens of digital services and experiences, internet buyers of the same digital services and experiences, and B2C ecommerce spending.

This research also quantifies consumer engagement with dozens of online activities and ecommerce categories. For online activities, engagement is measured across total users, those users that spend, and aggregate spend for each activity across 51 countries with 7 years of historic data and 5-year forecasts.

The world population is now roughly 8 billion, with nearly 5.5 billion being between the ages of 15 and 64. There are over 2.3 billion households. Each individual and household is a potential customer of consumer goods and services.

With nearly 5.5 billion internet users worldwide, the overall addressable market for online, or digital, consumer goods and services is massive. Moreover, the addressable market continues to grow with internet users forecast to reach 6.2 billion in 2027 as roughly 800 million net new users come online through the 2022-2027 forecast period.

Growth in Mature and Emerging Market Opportunities

Consumer engagement is growing across mature and emerging digital experiences. Among the mature user experiences, video streaming (4.7% CAGR), music streaming (8.0% CAGR), e-books (8.5% CAGR), gaming (6.7% CAGR), podcasts (5.8% CAGR) and cloud backup (10.8% CAGR), hundreds of millions of net new users will be added to the worldwide market during the 2022-2027 forecast period.

Tremendous growth is forecasted for emerging consumer market opportunities as well. Telehealth (12.0% CAGR), online fitness (6.3% CAGR), smart home services (7.5% CAGR), and micro mobility (9.3% CAGR) all are forecast to post strong growth in terms of worldwide users. Not all these users will be paying users, but this speaks to the need for strategies and technologies to support content, service, and experience monetization inclusive of paid a la carte, paid subscription, ad-supported, and hybrid models.

Consumer Trends to Watch

Beyond the continued growth of consumer market segments and monetization models, other key trends to watch include:

  • Content creation. Consumers as content creators and consumer engagement with independently created content is a key transformative digital experience. This represents a risk not just to legacy news platforms such as digital newspapers but also high-engagement digital services such as streaming video subscriptions. As individuals continue to engage as creators and consumers of content, overall time spent on social and content sharing platforms and share of advertising dollars will shift from other services.
  • Impact of artificial intelligence (AI). AI’s potential impact on the future world can hardly be overstated at this point. Its impact on the consumer market will be felt across everything from optimized customer segmentation and recommendations to content creation. AI-assisted creator solutions will surely come into play as will the continued growth of content created entirely by AI.
  • Generational shifts. IDC’s consumer team keeps an eye on how younger generations engage with technology in ways different from older generations. The behaviors of Gen Z and younger Millennials appear likely to be transformative and drivers of new opportunity growth and legacy behavior decline.
  • Economic uncertainty. While the outlook for the economy remains uncertain, this does not necessarily mean the growth of digital consumer service engagement will decline. Some may prove to be relatively recession-proof just as legacy pay TV generally was. Shifts in consumer spending to home health monitoring, online fitness, less expensive banking and financial services are among the key areas to watch.

Next Steps

Opportunities in the consumer market range from B2C to B2B2C. Of course, there are opportunities for companies that sell direct to consumers, whether content, applications, experiences, goods, and services. While the consumer market for digital applications and experiences can sometimes appear to be dominated by large companies, scores of smaller ones actively drive innovation and achieve success.

IDC is beginning to map out the extent to which these large companies offer products and services in the various segments of the consumer market to show their relative strength and their weaknesses or gaps. Opportunities also exist for vendors to provide the enabling technologies, in a B2B2C context, that support consumer services. For these companies, understanding emerging trends in the consumer market is critical to staying ahead of demand and creating innovative solutions that enable B2C companies.

For example, winning opportunities associated with the growth of consumer content creation range from providing tools (devices, software, and services) used by creators to enabling content distribution and monetization.

IDC can help you identify opportunities in the consumer market. The CMM quantifies consumer engagement and spending across dozens of opportunities, and engagement with the analyst team can help you target these opportunities through custom segmentations, competitive analysis, and consumer needs assessments.

Greg Ireland is a Research Director for the Future Consumer research program at IDC. In this role, Mr. Ireland focuses on the adoption of and engagement with consumer digital technologies, services and applications that transform consumer experiences, business models, and market opportunities. He also has expertise in and provides in-depth analysis on the ways in which digital video content is distributed, consumed and monetized across traditional pay TV and over-the-top (OTT) services.