Paris, January 9, 2023 – 61% of consumers are concerned about their financial situation, along with Millennials (66%) and Generation X (64%) being the most worried, and baby boomers (55%) the least. To navigate these pressures, nearly half (44%) of consumers say they are reducing their overall spending; an increase from 33% of respondents who said the same in November 2020. According to the second edition of the Capgemini Research Institute’s annual consumer trends report, ‘What matters to today’s consumer,‘ which reveals the the impact of an increase in the cost of living on consumer spending habits and preferences. The report says that while retail organizations continue to face disruption, there is a need to transform operations to meet changing consumer expectations for affordable products and pass cost benefits on to customers.
Nearly three-quarters of consumers reduce non-essential purchases in difficult times
Purchasing behavior is also changing. Based on its survey of 11,300 consumers in 11 countries, the report found that nearly three-quarters (73%) of consumers are making fewer impulse purchases, while 69% are reducing non-essential spending such as electronics. , toys and restaurants. , as well as delaying the purchase of luxury items. Saving money is a priority for many people, with 64% of consumers buying products from hypermarkets and discount stores and 65% buying cheaper private label or discount brands.
“There is an opportunity for retailers to radically rethink their operational strategy in order to weather this storm and pass the price benefits on to consumers. By identifying new sources of revenue, creating new markets, transforming operations and optimizing costs, companies can succeed without compromising sustainability or the overall customer experience,” saide Lindsey Mazza, Global Retail Lead, Capgemini Group. “Harnessing technology for intelligent demand planning, inventory management and automated operations can not only help reduce costs and maintain marginsbut also bring sustainability benefits for organizations.”
Consumers will not pay more for sustainable products
Sustainability continues to be an important factor when deciding which retailer or brands to shop with, but only 41% of consumers globally say they are willing to pay more for a product than they consider sustainable. This is a marked decrease from the report’s findings in 2020, when 57% of consumers said they paid higher than average prices for products they perceive to be sustainable. The report highlights that brands and retailers need to re-evaluate their pricing strategies to provide affordable yet sustainable options to consumers and deliver loyalty programs that help customers through the current crisis while building long-term customer loyalty.
Retailers need to rethink their operational strategy around cost reduction, sustainability and experience
Businesses also face challenges such as rising energy, labor and transportation costs, but according to the report, 67% of consumers say brands and retailers should offer lower prices for the products their families need. The report highlights that retailers and consumer products companies will need to transform their operational strategy to achieve cost reductions in a way that also meets consumer expectations for sustainability and convenience. Transforming the way organizations use the workforce, adopting a technology-driven supply chain, and automating warehouse operations can also go a long way toward improving last-mile delivery while reducing costs.
Opportunities to unlock new channel growth with custom social media strategies
The report also suggests that by leveraging the power of social media influencers and expanding into new channels to reach customers, brands can unlock new revenue streams and growth opportunities. According to the study, 70% of consumers purchasing products on social media said they trust influencers when using the product and sharing their own experiences and reviews. For example, Gen Z shows the highest engagement here, with nearly half (48%) discovering new products through online influencers and 32% making the purchase.
Read the full report here.
The Capgemini Research Institute surveyed 11,300 consumers over the age of 18 in 11 countries: Australia, Canada, France, Germany, Italy, Japan, Netherlands, Spain, Sweden, United Kingdom and United States. To be eligible for inclusion in the survey, consumers must have purchased groceries and/or health and beauty products within the previous six months. The global survey took place in October and November 2022.
 Survey respondent aged 25-40 in November 2022
 Survey respondent aged 41 to 56 in November 2022
 Survey respondent aged 57 to 75 in November 2022
 Capgemini Research Institute, How sustainability is fundamentally changing consumer preferences, June 2020.