The numbers are often quoted, but still remain staggering. The United Nations predicts that today's global population of 7 billion is going to rise to roughly 9 billion by 2050. In 2010, 3.6 billion people lived in cities. Fast forward forty years, and this will rise to 6.3 billion, 70% of the world's population.
In many developing countries, new cities will be created from scratch. Elsewhere cities will sprawl outwards and upwards. This will bring new challenges, ranging from the threat of unprecedented levels of pollution, to a massive demand for already scarce natural resources, and dangerous pressures on public services. Human ingenuity and creativity has always stepped up to find answers to societal problems. It will need to do so again. The good news though, is that urbanisation will also bring plenty of opportunities for those prepared to grasp them.
In his book "Arrival City", Doug Saunders shares intriguing observations on how urbanisation can succeed. Infrastructure, as simple as water and electricity distribution, economic freedom, education, and access to real estate albeit small, will create new economic opportunities and progress to many.
The urban migration can be a blessing for brands. It will stimulate idea sharing, entrepreneurship, and ultimately the emergence of new services, creating a raft of new aspirational consumers.
Our analyses show that in cities there is a higher proportion of consumers who want to make a good impression, who want to celebrate, and enhance a social occasion. They are looking for exciting and innovative brands, which are stylish and aspirational. Cities will act as a nucleus for trends, activated by truly global companies. They are increasingly becoming the natural hunting ground for top brands.
The estimated annual 60 million additional city-dwellers - roughly six new cities the size of Chicago per year - will represent 35% of global GDP growth. In 2025, 60 % of the wealth of the global economy- estimated at $64 trillion - will be created in the top 600 cities of the world.
Again, these are good news for brands. The beer industry is a microcosm of what is happening across the globe. In 2012, we saw the start of an interesting development in the premium segment in cities versus the national average. In the UK, 48.4% was premium nationally, while in London this was higher, accounting for 58.7%. This is a trend we also see in the developing world.
With more people living closer together, engaged with new forms of media, we see increased interdependence, and a higher rate of mutual influence. This phenomenon will continue at pace. Social interaction platforms, such as our latest service '@wherenext', show how this is manifesting itself.
City-dwelling consumers know and enjoy what they know about their home towns. But increasingly, they want to know what they don't know about their city. Brands that can help them unlock these secrets, are the ones that will survive and prosper. Cities will either be the catalyst for brands to grow or, if they get it wrong, to go up in smoke.
To grow in this exciting new environment, the traditional play book will need to be ripped up. Brands need to reinvent the way they become entwined with and in people's lives. They need to be seen as exciting, innovative, whilst staying authentic and relevant. Not an easy task. To successfully ride the urbanisation wave, brands will need to understand 5 new truths and be prepared to move out of their comfort zone.
First, the way consumers decide will continue to change, based on urban proximity as well as the pervasiveness of social media, facilitated by mobile communication and wearable tech.
Second, the city has become a new identity - I am a Berliner has a different connotation than I am German - and as such represents an increasingly relevant source of provenance.
Third, the city is not a monolith. To be city-focused will require a level of granularity and sophistication, by area, neighbourhood, social class, ethnicity, gender. Most companies today are not equipped to deal with that type of challenge.
Fourth, from a 'nice to have', sustainability will become a matter of survival for urban dwellers and city planners, as density will likely keep growing. Sustainability will need to go beyond current clichés to become a bespoke strategy by city, which is actively and collectively enforced. Brands will have a key role to play in this.
And finally, the city will increasingly be a nucleus from which trends will emerge, and connect to other cities, much faster than they will connect intra-nationally. The top-cities network will supersede the traditional national order. This means a lot is at stake in getting this equation right for a global company. Indeed, to address this challenge, companies need to take a serious look at their governance and organizational structures.
The urban migration will mean that speed of thought and action will be of the essence to ride the trends wave. This will challenge organisations, and will determine the winners and losers.
This will be an exciting journey because this is how progress is made.Suggest a correction