If you think you know consumer behavior, think again. Middle-income consumers are feeling the squeeze and worrying about inflation but aren’t holding back on splurges. Rather than sticking to tight budgets in retirement, aging consumers are splurging too. Speaking of older shoppers, it turns out that the brand loyalty they’ve long been known for is a thing of the past. And young consumers in Asia and the Middle East are more likely than those in Western markets to switch to higher-priced brands.
These are just some of the large-scale shifts taking place in the global consumer landscape. Consumers have continued to defy expectations and behave in atypical ways, keeping consumer goods manufacturers and retailers on their toes. More than ever, companies that cultivate a detailed, up-to-date understanding of today’s and tomorrow’s consumers—who they are, what they want, and where and how they shop—will be best positioned to succeed.
In this article, we draw on our ConsumerWise research to delve into nine trends shaping the global consumer sector and four imperatives to help consumer businesses move from “now” to “next.”
Nine trends defining the global consumer market
To forecast where the global consumer landscape is heading, we surveyed more than 15,000 consumers in 18 markets that together make up 90 percent of global GDP. Their answers revealed surprising nuances about demographic groups, seemingly contradictory consumer behaviors, and categories poised for growth.
Four imperatives to win the consumer of the future
In light of these nine forward-looking themes, what should consumer companies do? The most successful ones will be those that act on four imperatives:
Build microtargeting capabilities
Rather than putting consumers in predefined—and often outdated—boxes, companies should focus on microtargeting to build a richer understanding of consumer preferences. This involves taking a “smart reach” approach, whereby consumer businesses use their consumer data to target specific microsegments of consumers who may demonstrate particular shopping behaviors or preferences. Generative AI can help consumer businesses reach these microsegments at scale by increasing creative output and automating marketing outreach. Through microtargeting, companies can engage high-potential consumer groups—for example, younger people in emerging markets or wealthy aging individuals—and provide personalized experiences that build brand love and loyalty and propel future purchases.
Invest in wellness
A rise in both consumer interest and purchasing power presents tremendous opportunities in the $1.8 trillion global-consumer-wellness space. Consumer goods leaders have a chance to reevaluate their product development road maps and consider whether they have more opportunities to introduce personalized-wellness products to priority consumer groups. Consumers across the globe want data- and science-backed health and wellness solutions. Best-in-class companies should evaluate opportunities to lean into these offerings and other wellness growth areas (such as women’s health and healthy aging).
Propel the social–digital experience
Companies should take steps to engage with consumers on social media and other digital platforms. This involves identifying the right channels and platforms, creating attractive content, and tailoring strategies to meet evolving consumer needs. This is especially important as industry lines blur (for example, as consumer companies enter the healthcare space and vice versa) and as ecosystems (networks or partnerships that cut across different industries) become more important.
We see innovative, international companies testing new approaches to social commerce to connect with consumers on a local level. Some are mobilizing local key opinion leaders to precisely target consumers and create viral digital campaigns that resonate with them. Social media and private chats through platforms such as WeChat help to continually engage consumers.
Offer premium products where they matter
Offering premium products in relevant categories can help improve brand loyalty. Consumer brands should identify which categories are ripe for this, such as experiential travel—where splurge activity is common even across middle-income and aging consumers. Conversely, some categories are more suitable for value plays based on trade-down behavior or frequent brand exploration. Integrating loyalty and pricing strategies, instituting pricing tiers, and tailoring product assortments at the local and channel levels are ways that consumer businesses can provide value to consumers, while also managing economic pressures.
In this consumer landscape—one in which standards, complexity, and stakes are all higher—leaders should understand the new nuances that define who the “next” shoppers are, what they care about, and how they shop. These insights, which should then inform strategic category and channel investments, can lead to long-term, profitable growth and sustained competitive advantage.
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