The 11th wave of the global study explores the emerging priorities that will shape future consumption patterns.
- Affordability is dominating global headlines, but many consumers are defined by a desire to live sustainable or healthy lives, or to have rewarding experiences.
- Digital continues to grow in prominence, but issues of trust, cost and the continued preference for physical channels remain.
- Consumer companies will need to focus on the common ground, or shape propositions, products and services for the consumer they want to serve best.
Given the profound changes global consumers are having to cope with, it’s remarkable that they continue to be so resilient. While many feel the threat of the COVID-19 pandemic might be fading at last, they have plenty of other worries to deal with — including rising inflation, an energy crisis and the end of historically low interest rates.
People around the world are suffering financial hardship that is likely to deepen in the months to come. But it’s also true that affordability is not the defining concern for all or even most consumers. Their spending and lifestyle choices are largely shaped by other factors.
The 11th wave of the EY Future Consumer Index — which has been tracking consumer sentiment since March 2020 — shows that people remain optimistic about their lives over the longer term. But their hopes about what their future might look like continue to evolve. While 74% are looking forward to getting “back to normal,” 47% like the way some aspects of their life have changed and don’t want to go back to living exactly the way they did two years ago. And 54% say that over just the last year their values and the way they look at life has changed.
To help companies anticipate the opportunities and challenges created by these shifting attitudes, each wave of our Index has tracked and grouped consumers into five future consumer tribes, whose size and relative importance has steadily changed over time. While affordability has always been paramount for many, priorities over health have given way to pent up demand for experiences, and the proportion of consumers prioritizing the needs of the planet has risen.
In this article we check in with our five consumer groups to see what’s important to them now. While companies need to respond to the world we’re in today, they also need to anticipate the demands and desires that these emerging aspirations will create tomorrow. These consumers are defined by:
- Embracing frugality as a way of life
- Making sustainable choices for a better future
- Living life for today, not tomorrow
- Focusing on their personal wellbeing
- Making choices that benefit their community
Consumers in the Planet first segment:
- More mindful consumption
- Favouring local product
- Expecting transparency
Consumers in Experience first segment:
- Financially and socially optimistic
- Living for the moment
- Looking for personal benefit
Consumers in the Society first segment:
- Owning fewer, better things
- Believing together is better
- Considering the “bigger picture” in their doing
Consumers in the Affordability First segment:
- Financially concerned
- Saving, not spending
- Low cost sustainable
Consumers in Health first segment:
- Focus on health and safety
- Less concerned about getting sick
- (Price) conscious consumption
Chapter 1 – The “Affordability first” consumer
Embracing frugality as a way of life.
“I will try to live within my means and my budget. I will try not to buy things I don’t really need. When I do need something, I will look out for the best deals. I won’t care much about what brands I buy; I just want to know the product delivers what I need.”
“Affordability first” consumers have a high focus on cost and price. Many are pessimistic about the economic outlook of the country they live in and the prospects of their personal finances, with 40% expecting that their life will be worse in three years and only a minority planning to have a vacation in the coming year. They focus their spending on essential products and 76% don’t feel a need to keep up with the latest fashion trends. Seventy-one percent are not willing to buy new products when they can repair what they have.
This frugal mindset influences other behaviors. “Affordability first” consumers put a high priority on sustainability, but often express this in ways that are cost effective, such as using reusable shopping bags or conserving energy at home. They are more reluctant to take actions that involve financial commitments and 60% think that it costs too much to buy sustainable products.
Their shopping habits are conservative rather than disruptive. Many prefer to shop in-store and 52% have never bought groceries online. They have a higher distrust of data sharing and most are unwilling to share their personal data, even if it means getting cheaper products. With their focus on essentials, they are less interested in digital technology — 36% intend to reduce their spending on video streaming subscriptions.
Over the holiday season they plan to buy gifts that feel useful and cut their spending on going out and on food and drink.
The festive gift they would love to receive is solar paneling that will help them save money and reduce their environmental impact.
Figure 2: Affordability first consumers are reining in spending more than other segments
Across the globe, 25% of consumers identify themselves as “Affordability first,” the joint largest consumer group alongside Planet First. The group makes up a high proportion of consumers in markets such as Japan (41%) and Finland (39%) but is low in the US (26%). It is far smaller in Nigeria (11%), China (6%) and India (4%). Typically, these consumers are in lower-income groups and have spent less time in education and are more likely to be living in suburban or rural areas rather than cities.
Three Ways to Serve the “Affordability first” Consumer
- Rationalize portfolios, SKUs and categories to optimize price and simplify choice — extend the range of lower-priced alternatives as part of your brand proposition in essential categories (or, in the case of retailers, extend private label).
- Develop promotional price offerings around point of sale in-store rather than through complex digital loyalty schemes.
- Innovate and educate on sustainable products that can reduce overall costs to consumers, such as energy-saving electronics and low temperature washing detergents — apply services to extend product lifespans such as repair and resell.
Chapter 2 – The “Planet First” Consumer
Making sustainable choices for a better future.
“I will be more aware of what I do and the impact it has on the world. I will seek out other people who share my values, and I’ll buy brands that reflect what I believe. I will do what I can to cut waste and reduce my environmental footprint. I don’t mind having less choice about what I buy, if it means I’m doing the right thing for future generations.”
“Planet first” consumers are worried about inflation, but less so than other tribes. Sustainability is the issue that defines them. They have fewer financial worries, so are less likely to be cutting their spending — unless it’s in an effort to live more sustainability, which is a goal they’ve embraced in their daily life.
They’re changing how they live in many ways to be more sustainable. Some of the changes don’t cost them anything, like refusing plastic utensils; others involve greater commitment, like switching to public transport instead of using the car. They will also pay more for sustainability, with 58% willing to pay more for products if they believe they are produced in a more sustainable way. And 30% intend to buy less overall so they can be more sustainable.
“Planet first” consumers feel they have a responsibility to influence the behavior of other people and they would like more information to guide their own purchase decisions.
But their commitment to live sustainably is not always reflected in their actions. Many still want to keep up with the latest fashion or tech trends. They are also more likely than average to buy products not because they need them but because the products make them feel happy.
“Planet first” consumers are digitally savvy and are open to using digital channels to make purchases in the future — 52% of this tribe order their groceries online. They are also keen on digital experiences, such as video streaming, and 30% of them have attended immersive virtual events — a proportion only topped by “Experience first.”
Sustainability considerations will also impact their choices in the upcoming holiday season. They will be more careful that what they buy is useful and will favor sustainable food choices and local products, with 37% intending to buy locally made gifts.
The festive gift they would love to receive is a locally grown Christmas tree that they can replant to improve reforestation and biodiversity.
Figure 3: Planet first consumers are reducing their environmental impact during the festive season
Where to find "Planet First"
“Planet first” consumers are the biggest groups in China (35%), and Mexico (34%). They are as well represented in Italy (32%), Germany (29%), and Spain (28%), but there are fewer of them in the US (21%). Globally, they tend to be young to middle-aged consumers with only 19% of Baby Boomers. The majority is part of the urban middle class, with average levels of education and employment.
Three Ways to Serve the “Planet first” Consumer
- Establish traceability along the value chain and transparently report impact to encourage consumer loyalty.
- Invest in developing sustainable and recyclable solutions that reduce packaging use and in product development, including platforms that support reselling.
- Don’t lose sight of the fact that these consumers still want to keep up with fashions and other trends and will pay more for sustainability.
Chapter 3 – The “Experience first” consumer
Living life for today, not tomorrow.
“I will live for the moment and look for experiences that help me get the most out of life. When it comes to what I buy, I will enjoy trying new things. I will also look for products and services that feel like they are made just for me and what I need. The brands I buy will tell people a lot about who I am.”
“Experience first” consumers don’t have to cut back as much as other groups because they have above average income and education. One in three want to spend more on out-of-home recreational activities or vacations. Almost half of them have booked a vacation in the next six months and 48% intend to spend more money on this than in the past.
They’re also eager to go out and enjoy experiences and 63% want to catch up on everything they missed during the COVID-19 pandemic. The cities they live in offer an abundance of opportunities for this.
But they’re also enjoying in-home experiences more than other tribes. They’re much more likely to have online subscriptions — for example, 41% have subscriptions to gaming services. Half of this tribe are willing to buy nonessential products, services and experiences that make them feel happy.
“Experience first” consumers are embracing digital technologies more than other tribes. Over a third have purchased virtual products such as digital skins or interacted using virtual multiuser platforms such as Roblox. Almost half of them have bought an item directly from social media.
Despite their desire to go out and enjoy experiences with others, this is actually the most worried group. Even as they seem inclined to spend freely, 41% are extremely concerned about their household debt. But they are also the most optimistic, which helps them to forget their worries and enjoy what life has to offer. This tribe cares about the environment, but they are less willing than other consumers to scale back what they do or what they spend for sustainability reasons.
They plan to spend more during the coming festive season, particularly on gifts for children. Two out of five are worried that electronic gifts will be out of stock so are shopping online more and trying to buy them well ahead of time, even pre-ordering them before they are released.
The festive gift they would love to receive is a city break in a new and exciting place.
Figure 4: Experience first consumers are embracing digital
“Experience first” is the biggest tribe across Asia overall (28%) and the second biggest in the US (23%). You’ll find fewer of them in Europe, and they are the smallest tribe in UK (13%), Sweden (12%) and Italy (15%). They tend to be younger and two out of three live in cities, with slightly higher than average education and income.
Three Ways to Serve the “Experience first” Consumer
- Focus sustainability messaging on quality and differentiation in products, as this tribe is unwilling to sacrifice quality for the sake of the environment.
- Build services around products to create unique opportunities and add value and experience beyond the transaction.
- Use innovative and gamified tools in digital channels to convey exclusivity and fun through brand engagement.
Chapter 4 – The “Health first” Consumer
Focusing on their Personal Wellbeing
“I will make choices that protect the health of myself and my family before anything else. I will focus more on what I think are the important things in life and what feels right for the long term. I will choose brands and products that I trust to be safe. I will minimize unnecessary risks and will prefer to shop online rather than in store.”
“Health first” consumers prioritize their physical and mental wellbeing. They think health and wellbeing are the most important issues in society, together with combating climate change. Fifty-four percent of “Health first” consumers intend to prioritize health and wellness as a key factor driving their purchasing behavior in the coming years.
Despite their health focus, they are not more concerned than other tribes about their own health. This is perhaps surprising, but they likely feel they are being proactive about staying healthy. However, they are worried about inflation, which makes them feel more vulnerable. For example, 61% are very concerned about the rising cost of groceries.
They’re afraid that these cost pressures will be a longer-term issue and are significantly limiting their nonessential spend, particularly on less healthy products, with 44% intending to spend less on alcoholic drinks. Overall, they’re moderately pessimistic about their country’s economic outlook and are very concerned about increasing costs — only topped by the Affordability First tribe.
“Health first” consumers are comfortable with established digital services, such as online ordering or video streaming. But they are less likely to subscribe to online fitness or health services, despite their focus on health. They are also less open than other groups to try new digital assets: 74% have never purchased virtual products such as Non-Fungible Tokens (NFTs) or digital skins. Only Affordability First is more averse.
They will try to avoid the upcoming festive crowds for health reasons. But otherwise, their plans for holiday season shopping are in line with those of other tribes.
Their inflation worries and lingering uncertainty caused by the pandemic make them more hesitant to book vacations over the festive seasons. If they go away, they prefer to use their car and stay in their own country.
The festive gift they would love to receive is an annual subscription to healthy personalized meal kits.
Figure 5: Health first consumers are focusing on their personal and mental wellness
The percentage of global consumers in the “Health first” tribe has fallen. In June 2020 it was the second largest, now it is the second smallest. In some countries, very few consumers are in this group. They account for 15% in Italy, 13% in Vietnam, and 10% in Denmark. “Health first” consumers tend to be more or less average in terms of living area, education and distributions of age. Less than half are employed full-time; only Affordability First has a lower employment level.
Three Ways to Serve the “Health first” Consumer
- Develop innovative products that combine mental wellbeing and physical health benefits by embedding functional ingredients such as nootropics and adaptogens — use scientifically backed health claims to create trust around their health-giving properties.
- Offer health services such as dietary and fitness advice to supplement healthy product offerings.
- Reduce the need for physical contact by creating digital services that use touchless and contactless fulfillment for payment and delivery.
Chapter 5 – The “Society first” consumer
Making choices that benefit their community.
“I will be a strong believer in the idea that we should all work together for the greater good. I will buy from organizations that are honest and transparent about what they do. I will want proof that they are putting the needs of society and the community on par with profits. I will want to do things that benefit society, like sharing data to stop the spread of diseases.”
“Society first” consumers are the least concerned about the rising cost of living, but they’re changing their habits to reduce costs anyway, by choosing cheaper brands or buying only the essentials. They’re cutting back where it doesn’t hurt them and 37% are trying new brands to reduce costs. This cutback on non-essentials gives them the funds to spend more on what they think is important.
Their defining concern is the health of society, but they appreciate that a healthy society needs a healthy planet. So, they are highly interested in ethically produced goods, and 56% are willing to pay more for sustainable products. They are very active when it comes to small initiatives like turning down plastic utensils, but they don’t shy away from bigger lifestyle changes, such as restricting their travel by airplane.
“Society first” consumers want to actively encourage companies to become more sustainable. Seventy percent consider and make purchase decisions based on the ethical behavior of an organization, but two-thirds also think they need more information to help them make more sustainable choices. They are happy to reach out to companies through email, chat bots or social media messaging to get this information.
They feel a responsibility to encourage their friends to adopt more sustainable behaviors, and two out of three will tell their friends about products that are good for the planet.
This spirit of connection and activism is reflected in their digital behavior. They aren’t more likely than other consumers to use digital technologies, but they are more likely to use them to interact with other people, with 55% reporting that they recently socialized with friends and family on video platforms.
The festive season is an important opportunity for them to positively express their social values, in what they buy and how they bring people together.
The festive gift they would love to receive is membership to a local society or charity.
Figure 6: Society first consumers are shaping the views and behaviors of those around them
“Society first” consumers are the smallest tribe in all regions and most countries. They reach their highest shares in China (18%), Nigeria (18%) and Vietnam (17%). They tend to be slightly weighted to males and have slightly higher levels of education.
Three ways to serve the “Society first” consumer
- Focus product portfolios and supply chain transparency on the delivery of locally sourced and sold goods.
- Engage with policymakers to ensure that company activities and initiatives are beneficial to communities.
- Find ways to connect consumption of your products and services with the local causes people care about.