Today’s customers are sending a wake-up call to businesses worldwide: You don’t get me
Nearly one in two customers across all generations feels overlooked by the companies seeking to serve them, according to Oliver Wyman Forum surveys. The erosion of loyalty is equally dramatic: 62% of customers will switch brands after a single poor experience, and customers in leading economies are switching their favorite brands two or more times a year.
Such rapid churn can be costly. The investment required to reach increasingly elusive customers has increased, with global advertising spend doubling from $500 billion to $1 trillion in just a decade, according to estimates from the World Advertising Research Center.
This challenging customer landscape coincides with — and may be contributing to — an era of accelerating corporate turnover. The average tenure of a company in the S&P 500 has declined by 33% since 1960, and nearly 50% of Fortune 500 companies in 2000 are no longer on that list today because they had weak revenue performance, were acquired, or went bankrupt. Even more sobering: 45% of current S&P 500 companies may face similar challenges within the next decade, according to an Oliver Wyman analysis.
The new demand drivers
Behind these shifts lies a powerful convergence of customer and technology megatrends that’s changing the nature and drivers of market behavior. Population patterns are reshaping demand — by 2025, 57 cents of every dollar will be spent by those over 50. Population of megacities is set to nearly double from 2000 to 2035.
The revolution in artificial intelligence is driving wholesale change. Nearly three-quarters of companies believe they will need fundamental transformation in the next three to five years just to remain competitive.
This technological shift extends beyond AI. Consider how a leading industrial manufacturer achieved 32% productivity gains by implementing augmented reality solutions — reducing task completion time, minimizing operational errors, and enabling workers to access expert guidance on demand. The potential is set to grow even further as organizations begin exploring AI-enabled conversational interfaces with AR, allowing workers to receive intelligent, contextual guidance for complex tasks through natural dialogue.
Meanwhile, market dynamics have shifted substantially, with the value of physical assets like land, inventory, and equipment shrinking to just 10% of S&P 500 value while intangible assets such as patents, trademarks, and software now comprise the remaining 90% — up dramatically from 17% in 1975. Environmental pressures are mounting, with an 83% increase in climate-related disasters reshaping priorities and possibilities.
Time for a shift of mindset
In light of these forces, many organizations have to reconceptualize how they view themselves and their markets. Instead of defining themselves by what they make or sell, leaders should ask what needs they serve. And let’s be clear about what we mean by “needs.” We’re talking about problems where there’s real customer value at stake; where customers or groups have clearly signaled they’re genuinely motivated to make progress.
These needs-based markets — enduring spaces centered on fundamental needs like health, security, productivity, and connection — span individuals, organizations, and nations. They remain relatively constant over time even as the ways to fulfill them continually evolve. This shift in perspective, from “what we make” to “what needs we serve,” becomes critical as organizations seek to bridge the growing gap between customer expectations and current offerings.
These converging forces are challenging traditional product-oriented thinking in unexpected ways. Consider how AI and demographic shifts are transforming healthcare delivery. Aging populations and younger generations want personalized care delivered on their terms, while AI enables precision medicine and digital delivery — making traditional one-size-fits-all healthcare products increasingly outdated. Already some 40% of new oncology drugs now emerge as precision therapies.
This pattern repeats across markets. It suggests companies can create more value by starting with a deep understanding of how converging forces are reshaping customer needs, rather than focusing on pushing existing products to market. A needs-based perspective provides a more effective lens for navigating these intersecting forces and identifying emerging opportunities.
Shaping and capturing new opportunities
There is a silver lining to these disruptive shifts. While traditional markets struggle, visionary organizations are discovering valuable opportunities in growth value pools — emerging opportunities where strong customer demand meets evolving capabilities.
Two sets of industries show how major market opportunities emerge when transformative forces intersect with fundamental customer needs. In wellness and vitality, the collision of aging populations, biotech revolution, and AI advancement is creating high-growth opportunities in digital health ($240 billion in annual global revenue, 23% annual growth in the past three years) and precision medicine ($80 billion, 6.4% growth). Similarly, in power and infrastructure, the intersection of surging energy demand and climate destabilization is driving explosive growth in renewable energy ($1.1 trillion, 7.4% growth) and climate technology ($20 billion, 24% growth).
Success depends on thoughtful timing and approaches. Each opportunity evolves through distinct phases from early experimentation to acceleration and, eventually, maturity. There is no single, “correct” route. Some companies choose to shape markets early, building strong partnerships to capture first-mover advantages. Others find success as fast followers, focusing on specific segments or capabilities where they can create distinctive value as business models mature. This strategic approach should reflect how organizations choose to compete, whether by reshaping value chains, solving specific customer challenges, or building foundational capabilities for others. Each path requires different organizational capabilities and approaches to execution.
Whatever the approach, the opportunity is clear. Companies that embrace this mindset shift and work to understand and meet customer needs in new ways can create breakthrough solutions that reshape entire industries. The potential upside is dramatic: Trillions of dollars’ worth of value creation await those who can effectively transform their approach to customers.