The overlapping crises and tighter regulations that have emerged over the past four years have disrupted companies in consumer sectors such as retail, manufacturing, automotive or technology, media and telecommunications (TMT ), emphasizing the importance of adaptation, digitization and sustainable development. Many companies around the world are currently struggling to maintain growth, explore new markets and discover new revenue streams in an environment where consumer confidence is low and economic signals are uncertain. Implementing a customer-centric transformation strategy is the logical answer, and PwC’s research shows it. The most effective companies prove that this approach brings results. The key differences between the market winners and the rest of the companies come from how the former embrace challenges, embrace transformation and use new technologies such as AI.

As inflation and interest rates, which are still high, continue to erode purchasing power, the appetite for spending is expected to diminish and consumers will become more focused oncost, maximally digital services, accessible and adapted to personal preferences. While connecting with customers through devices is important, the human presence is still vital to building loyalty: a third of people say that a positive interaction with a company’s employees is a big factor in their decision to buy from a brand again. In addition, consumers expect the organizations they buy from to reflect their own values, so trust and loyalty in consumer relationships are more important than ever.

Thus, retail has seen new ways of shopping and strong local supplier networks have developed, automotive sales of electric and connected cars have grown exponentially, and in TMT streaming platforms have gained momentum, the wider use of 5G and the emergence of more and more applications based on artificial intelligence.

Four macro trends will continue to influence the future of consumption: technology, supply chain, brand relevance and environmental, social and governance (ESG) initiatives. Looking at each of these separately, we see that technology will be necessary to bring together the best elements of the physical and online worlds, create the omnichannel experience of the future, and enable hyper-personalization. The pandemic has also highlighted the need to make supply chains more resilient, transparent, sustainable and digital, and increased consumer demand for healthier products.

The way in which companies in the technology, media and telecommunications (TMT) sector conduct their business is in a continuous (re)evolution, and changes in this sector cause transformations in most sectors of the economy. The forecast for the coming years gives us a picture of an increasingly digital industry dominated by advertising. Amid continuous change and disruption, the industry has re-evaluated its strategies and is seizing opportunities for growth through the use of new technologies. Over the years, technology discussions at TMT have focused on the transition from analog to digital and from landline to wireless. Now the potential for growth lies in the convergence of existing and new technologies – especially artificial intelligence and especially generative artificial intelligence. We’re all familiar with the algorithms for personalized recommendations on platforms like Spotify and Netflix, as well as the use of artificial intelligence in Internet search and ad delivery. But generative artificial intelligence goes even further, using neural networks, advanced learning models and other technologies to create or create texts, scripts and notes, etc.

As such, the technology sector remains the vector driving transformation in most industries, benefiting from its status as a “critical investment” on the agenda of most CEOs. The stakes are higher the faster the introduction of artificial intelligence or machine learning, for example.

Telecom operators, a mature sector, are once again faced with the challenge of having to invest very large sums in 5G technology to support a tripling of mobile data traffic (especially video) in a few years, with no guarantee that they will be able to capture a sufficient share of of the total cost of digital content that will pass through their networks.

The digital age continues with a new mobility ecosystem—sustainable and intelligent—where electric vehicles, connectivity, and new technologies are changing the way we move. And the automotive industry is in constant development and innovation. Technology-enabled smart mobility involves the integration of various technologies, including artificial intelligence, sensors, the Internet of Things, and data analytics, to create more resilient and sustainable transportation systems. Consumers are increasingly valuing the comfort and technology that their cars are equipped with, and this fact is driving the development of the connected, autonomous and electric car segment in the medium to long term. Safety and navigation are the most important, followed by vehicle management and vehicle-as-a-service. PwC estimates show that more and more consumers want connectivity services, prioritizing security and navigation. Driving assistant functions (autopilot) or a pilot for parking assistance are of great interest, and the function of mirroring the phone on the car screen is gaining more and more importance.

The rapid changes caused by the pandemic have led to an accelerated digitalization of factories, as well as an increase in cyber attacks and a transformation of consumer behavior, highlighting vulnerabilities and the need for resilience and flexibility. In this context, cost control comes first, while demand forecasting and supply chain transparency remain important. Manufacturers are also prioritizing technologies that work together to drive intelligent manufacturing, such as IIOT (Industrial Internet of Things), data analytics and the cloud, as well as automation to improve efficiency, such as predictive maintenance that prevents costly downtime. Today, the modern factory is already a very complex environment. Today’s machines and robots are equipped with a wide range of sensors connected to cloud-based performance analytics programs that measure productivity, manage production schedules, support supply and orchestrate all activities in the factory. As the manufacturing industry moves into the digital age, it is becoming both a supplier of goods and a producer and seller of data and information. Today, manufacturers are moving to another level, looking for new ways to sell not only their traditional products, but also the new digital and IoT-based services that come with those products.

Of course, in addition to their own transformation strategy to meet consumer needs, companies face the impact of macroeconomic instability, rising energy and raw material prices, fragmented supply chains, or labor shortages. Higher financing costs, energy transition and sustainability costs, and supply chain costs reflect significant challenges that add to the need to transform the business model to meet changing customer demands. Companies that manage to simultaneously manage cost pressures and customer transformation while embracing digitization and sustainability will stand out and become market winners.

The article is signed by Ruxandra Tarlescu, Florin Deaconescu and Doina Birsan.

Article supported by PwC Romania