![]() Typically, when finances are tight, people cut their spending in a narrow range of categories and still reward themselves with “treats.” But now we’re seeing consumers apply their money-saving tactics across all categories. 35% expect to spend less on grocery delivery.42% expect to spend less on out-of-home recreation. ![]() 48% are purchasing cheaper alternatives.49% would consider buying private label packaged food.This creates a challenging context for many brands. In many ways, consumers are turning back to what worked for them over the past two years – they were able to save money by working from home, spending more time at home, eating at home, and not feeling the need to buy new clothes. Many consumers (33%) are substituting their normal purchases with new brands or trading down to private label (21%). Rather, they are looking to express them in new ways – which we explore in more detail below. Our latest data show that they are not willing to simply abandon their new values as their household budgets come under pressure. In particular, people are now far more committed to living sustainable lifestyles and their interest in material goods has waned. Previous iterations of our Index have shown how deeply the pandemic experience has changed consumer values. ![]() Consumer values have fundamentally changed At the same time, the digital world can also amplify panic, exacerbate uncertainty and overwhelm people with information and opinions. Today, it’s much easier for consumers to get information, find alternatives, share their experiences, work together and learn from each other. The smartphone was a rudimentary device and broadband was running at a snail’s pace. The digital world is giving them more optionsĪt the time of the last global financial crisis – in 2008/9 – the online world was a remarkably primitive space. They’ve found levels of resilience they didn’t know they had. More now live with what we call an “always on emergency mindset.” They have become used to making drastic changes to how they live – from daily choices to long-term plans – and are more open to abandoning long-established habits and forming new ones. People are growing used to uncertainty and volatility. ![]() The pandemic experience has made consumers more adaptable Compared to previous financial crises, we think there are three fundamental changes at play: 1. While they’re becoming more careful about their spending, they’re also feeling bolder about taking action to protect their values and lifestyles. Increased working from home has given consumers more autonomy over how they structure their time they’d also like to be in the driver’s seat in other parts of their lives - notably, how they use their money and how they share their personal information. The percentage of consumers that align with each segment has been particularly volatile over the last year, as people react to a volatile world. Since the start of the pandemic, we’ve been tracking five different consumer segments. They are worried about the future, with 63% not expecting the economy to recover within the next 12 months and 62% expecting their living costs to increase over the next six months. This latest edition of the EY Future Consumer Index (Index) – the 10th in the series – shows that people have become used to living in a context of relentless crisis and uncertainty. In the minds of consumers, the distinction probably doesn’t matter. It’s debatable whether this combination of factors is creating a new crisis or simply extending the one we were in already. The global economy is slowing down, interest rates are going up, inflation has returned on a scale not seen for decades, geopolitics is playing out on the global stage, and new variants of COVID-19 continue to emerge. And when it looked as though the clouds were slowly starting to lift, people started to prioritize a new set of “post-crisis” values, especially around sustainability.īut that post-crisis era is yet to arrive. As the economic impact of the pandemic took its toll, they shifted their attention to affordability and the cost of living. When the COVID-19 pandemic first emerged, people put their health first, adopting very different behaviors and attitudes almost literally overnight. For consumers around the world, the last few years have been an unwanted rollercoaster ride.
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