EIGHT in 10 consumers say that inflation and the rising cost of living are their top economic concerns, according to global professional services firm Accenture’s 2022 Consumer Pulse Survey.
Accenture said its most recent survey suggests there are three consumer trends retailers should pay attention to as they drive the business forward.
The company surveyed more than 11,000 consumers from 16 countries: Brazil, Canada, Chile, China, France, Germany, India, Indonesia, Italy, Singapore, Spain, Sweden, United Arab Emirates, the United Kingdom, the United States and Vietnam.
One consumer trend to watch out for is “the anxiety pivot”. Here, the report gives emphasis on consumers’ shifting behavior. At the height of the pandemic, consumers were concerned about their own health. However, the report noted that nowadays, “they are more anxious about the economy, which is also not surprising given the turbulent times we are living in.”
The survey shows 46 percent of consumers across nations are concerned about their personal health, while 51 percent worry about their personal finances, and 56 percent worry about their country’s economy.
The survey also noted that people’s concerns about personal finances vary widely depending on where they live. For one, in Latin America worry the most consumers, with 69 percent of saying they are concerned or very concerned.
This is followed by consumers in North America, where 56 percent are concerned; the Middle East and Africa with 56 percent and Europe with 53 percent. Meanwhile, consumers in Asia Pacific worry the least about personal finances, but it’s worth noting that the Asian countries included in the survey are China, India, Singapore and Vietnam.
Under this consumer trend, the report highlighted, “It is a critical time for retailers to reinforce the relationships they have with customers by recognizing and responding to their economic concerns.”
The report also cited the strategies of supermarkets to provide consumers more room for purchasing power amide inflation woes. For instance, two UK supermarkets—Asda and Iceland—have made changes to help consumers.
“Asda is ‘dropping and locking’ prices of more than 100 items through the end of the calendar year in response to consumer worries about inflation. In addition, the grocer has launched its ‘Just Essentials’ line, which is a new line of budget-friendly basics,” the report noted.
Iceland’s strategy, on the other hand, is offering a 10-percent discount for customers 60 and over all purchases every Tuesday. “By helping seniors who often struggle with cost-of-living increases, the grocer is building loyalty by treating shoppers in a positive way that they will appreciate and remember,” the report stated.
According to the report, another consumer trend that retailers should be aware of is “the spending shuffle,” as spending patterns have shifted dramatically.
“As consumers feel squeezed by the economy, they are making new and sometimes difficult spending trade-offs,” the report noted. In fact, the survey shows that consumers with low incomes are most likely to do this.
The survey showed consumers with low income plan to spend less money in 2022 on luxury items; on socializing in bars; on big-ticket or one-off purchases such as car, house, laptop; eating out in restaurants; and leisure and travel.
Amid the spending trade-offs among consumers, especially the low-income earners bearing the brunt of economic stress, the report noted that retailers will certainly feel the impact of the “spending shuffle.”
With this, the survey revealed that this situation has a “silver lining for sustainability.” It shows that 38 percent of consumers who face budgetary pressures said they are repairing and upcycling their possessions; 38 percent said they are buying reusable and refillable products; 30 percent said they are buying second-hand items; and 29 percent are purchasing recycled or refurbished things.
Meanwhile, the report also shows that regardless of their income, there has been a “redefinition of essential categories” among post-pandemic consumers who now embrace the importance of self-care. The survey shows that on average, consumers expect to spend 27 percent more on “health and fitness” in 2022.
The report added that consumers now consider things like gym membership and vitamin subscriptions to be essential spending like food and groceries.
As for sustainability, the report also unveiled consumers that regardless of financial situation, are more conscious of and intentional about what and how they buy. The survey showed 28 percent of consumers have realized they can live happily with less—and reduced consumption as a result.
With this, the report noted that retailers can play an active role in promoting conscious consumption. One way to do this is by developing strategies that help customers extend the life of the products they buy.
Citing the practices of some retailers, the report noted that Givenchy and Celine will repair all products bought at authorized boutiques for up to two years after purchase. Apple, one of the world’s largest technology companies, is now selling 200 iPhone parts so that consumers have the option to repair their own phones at home. Nike, for its part, is accepting returns of gently worn shoes as part of its refurbishment program.
The last consumer trend mentioned in the report is the “virtual reality check.” Under this trend, the report revealed that 51 percent of consumers are interested in shopping for digital clothes to wear in a virtual environment in the next 12 months.
“What’s surprising is that people of all income levels and generations are interested in shopping for real-life products in virtual worlds,” the report stated.
“In addition to changing what they buy, consumers are also interested in and willing to change how they buy. We saw this during the pandemic when consumers turned to digital channels out of necessity,” the report added.
The report says retailers respond to this trend by experimenting with the best ways to blend virtual and real-world experiences so they are seamless for customers.
With the evolving consumer trends, Accenture underscored the critical role that reliable data sources play in challenging times. It said, “They [retailers] should understand that consumers’ channel preferences will ebb and flow over time, and that the emerging virtual world is becoming more relevant—more real—all the time.”