Climate Change, Cost of Living and Spending Top The Bill for Consumers: EY
Climate change and the cost of living are top the bill for Irish consumers who are now more intentional about what and when they buy, seeking to take advantage of discounts and deals while simultaneously bringing a sustainability lens to their purchasing decisions. That’s according to the 13th edition of the EY Future Consumer Index, which surveyed more than 22,000 consumers across 28 countries.
The latest edition of the Future Consumer Index finds the cost of living (94%) and climate change (89%) are front of mind for consumers. More than half (54%) of consumers globally say they are responding to their concerns by planning to buy less in the future. This is for a number of reasons, including as part of an effort to save money (73%), because they feel they don’t need new items (49%) or as part of an effort to help the environment (39%). Fashion accessories topped the list of product categories consumers plan to spend less on (61%), followed by toys and gadgets (51%) and clothing and footwear (44%).
Approaching Christmas, sales events are becoming even more attractive to consumers, with six in ten (61%) respondents globally planning to take part in Black Friday, Singles’ Day or similar sales campaigns. Seven in ten (71%) now say they plan to hold off on making some purchases until these periods, compared with half (48%) in November 2021. The report also reveals an increase in consumers shopping mostly or only online this festive season (up 16%), and a decline in shoppers purchasing items “mostly or only in-store” when compared with last year (down 14%).
Colette Devey, EY Ireland Partner and Consumer Products and Retail Lead, says
“This latest Future Consumer Index reveals a more Purposeful Consumer, keenly aware of both ongoing cost of living issues and the impact of climate change. Consumers are carefully considering what and where they buy, prioritising value for money, sustainability and asking themselves if a purchase is really necessary.
“The impact we have seen globally where more than half (54%) of consumers are planning to spend less to save money and seven in ten (71%) of them are planning to delay purchases until festive sales events to support their saving efforts is also apparent here in Ireland. While we had high spending in the summer months, there has been a decline in consumer spending in September and October ahead of the excepted discounting season. Globally, we are seeing consumers looking for ways to stretch their budgets, whether that is switching to private label goods to save money (61%), cooking more at home or planning to order fewer takeaways (42%).
We’re also seeing consumers increasingly looking to spread the cost of Christmas and other major events, taking the opportunity to buy early and take advantage of discounts and deals as part of seasonal sales such Black Friday and Cyber Monday. We expect a large number of consumers in Ireland to take part in festive sales this year. Interestingly, festive sales seem to be starting sooner than ever– already a range of retailers in Ireland have kicked off their discount season. This is why pricing and inventory will be a key priority for both consumer products companies and retailers as we head into the festive season.”
Consumers are adapting to climate change-related needs – but differ across generations
After a year of extreme weather events consumers are increasingly being confronted with the real-time impacts of a changing climate. More than four in ten (42%) global consumers report they are thinking of changing the food they eat because climate change has pushed up prices or limited availability, and almost three in ten (29%) say they have been forced to make new choices already. More than two-thirds (67%) of respondents attribute their efforts to drive change to their deep concern for the fragility of the planet.
Interestingly, the report finds differing responses to this concern across the generations. Older generations are more active in adopting lifestyle behaviours to reduce their impact: 65% of baby boomers bring reusable bags to the store compared with just 43% of Gen Z, and 63% of baby boomers recycle or reuse packaging after use, compared with 48% of millennials. Yet, when it comes to spending more sustainably, younger generations are speaking with their wallets and double-checking company claims. Thirty-seven percent of Gen Z indicated that they are willing to pay for more sustainable goods and services compared with 29% of baby boomers. Thirty-one percent of Gen Z have checked the sustainability ratings of products compared with 18% of baby boomers.
Devey says: “Today’s consumers are making purposeful purchasing decisions in the face of real-time effects of climate change, as weather systems in Ireland and abroad become warmer, wetter and wilder. Historically, there has been a gap between intention and action for governments, companies and consumers in their efforts to address sustainability. However, consumers are now increasingly willing to take sustainability actions which will either save them money or which do not cost them, and are more willing than ever to comply with government schemes which are designed to encourage sustainable behaviour. This is a positive sign ahead of the introduction of Ireland’s Deposit Return Scheme in early 2024 and whose success will be heavily reliant on consumer engagement with the scheme.
Digital Retail Powered by Generative AI
The report also finds a continued increase in the numbers of consumers shopping mostly or only online this festive season and a related decrease in those who shop in person. For retail businesses it is essential that they take this opportunity to meet their consumers where they are and technologies like Generative AI can support this.
Devey says, “Disruptive technologies including Generative AI offer consumer-facing businesses the opportunity to help clients make purposeful purchasing decisions. Whether that is hyper-personalistion of websites (making them unique to each individual visitor) or retailers using AI to offer clothing try-ons or to preview furniture in a consumer’s own home, there are a myriad of possibilities– and it is the businesses that seize the opportunity that will continue to delight the future consumer of tomorrow.”
The latest edition of the EY Future Consumer Index is available at: EY Future Consumer Index | EY – Global