The Future Consumer Index is a report put together for the BRC by Ernst & Young and it’s derived from a survey sample of 18,000 consumers across the most developed retail markets in the world.
It’s both accessible and engaging, and it’s particularly useful because it paints a picture of what the behaviour of consumers is now, and what it is likely to be over the next 6-12 months.
I have drawn out a few headlines, considering the data from the point of view of the MI space – but only as a lead in as I think it is well worth investing a little time to read it all through.
- Living with Covid
Whilst the report clearly points to changes in consumer habits brought about by the last couple of years, this is an early post-pandemic view and as such it is interesting to start to see how certain trends have begun to revert back.
Consumers appear (on the whole) to want to return to some kind of pre-lockdown flavour of normality, but with caveats. Experiences are high up on the the list of ‘to-do’s’ which potentially bodes well for the high street (as well as the travel companies) but there is still underlying concern, which means people need a good reason to venture out.
- Cost of living has cut through
Even before the outbreak of war in the Ukraine 68% of people of those surveyed were concerned about their finances, with 44% spending less on non-essentials and 42% citing the increasing cost of goods and services.
Some consumers were starting to feel more upbeat, but this is not distributed evenly across the income groups, with 81% of those in lower income groups feeling there were the same or worse off compared with a few months earlier. By contrast 43% of the high income group felt there were in fact better off than in previous months.
If you take consumer electronics as an example that is somewhat comparable to MI, 56% of people had noticed price rises already, and a further 44% expected more to come. As a result 24% of people were consuming less in this category and 7% had stopped purchasing altogether.
- Joining the dots, but digitally
According to the ONS the e-commerce penetration rate of 40% that we saw at the height of lockdown has dropped back to 28%, though this is still above the pre-pandemic level.
However online experiences are not necessarily living up to expectations with many consumers looking for more individual and customised shopping experiences. 33% say they only plan to visit stores that offer great experiences, and 29% are planning on ordering online for inshore collection more often.
- Sustainable intent
Mindful consumption is real, with consumers expecting transparency about the impact to the planet of the products available to them. 52% are intending on shopping more locally on the future and 66% say company behaviour is as important as what it sells.
However there is a disconnect between what consumers say they want and how they actually act, exacerbated by the immediate pressures on disposable income. 77% of consumers are not in a position to pay a premium for ethically sourced goods and 44% are still more likely to replace than repair.
- Introverted.
69% of people are spending more time at home, and 70% of people are socialising less than before the pandemic.
30% say that their work routine has improved as a result of the pandemic and as such flexibility is the top consideration for employees when considering a new job. 22% expect their work like balance to become more flexible over time.
How brands & businesses interpret what is outlined in reports like the Future Consumer Index will ultimately determine whether it is a driver for changes in commercial activity.
Certainly there is plenty here worthy of consideration, but it is early in the post-Covid journey and it will be interesting to see how the retail sector responds in the short term.
You can download the full report here
