In 2022, industries struggled to maintain their bottom line, as inflation, rising costs of raw materials, production and distribution problems and the energy crisis hit businesses hard. With many forced to transfer their rising costs to their customers, consumers were compelled to refocus their priorities and cut back on discretionary spending.
Euromonitor International’s Voice of the Industry: Lifestyles survey of industry professionals around the globe highlighted six consumer-driven trends having the most influence on their corporate strategies and objectives.
Focus on the shopper journey and engaging with the online community is critical for success
According to industry experts, new approaches to the shopper journey was one of the most influential trends impacting their sales in 2022, with 67% of professionals citing it as having a very or extremely high influence on sales. As consumers continue making purchases across multiple platforms, businesses are accelerating their digital transformation and develop tactics to engage more successfully with their customers and expand their brands’ reach. In order to close the gap between consumers and their products, companies are investing in a seamless omnichannel strategy that addresses the needs of all shoppers.
The total retail value of global e-commerce goods and services is set to expand by 56% in real terms over 2022-2027, and consumers are set to continue making purchases across many different platforms (eg social media, livestreaming, last mile delivery) and merchants must be prepared to engage with them anytime and anywhere.
Price sensitivity drives consumers to change their shopping habits
As inflation continues to diminish the value of consumers’ incomes, business professionals expect many to rein in their spending and prioritise purchases of more essential items and services, such as groceries, transportation and housing/accommodation rather than, for example, purchases of items such as clothing and footwear. Even if inflationary pressure eases later in the year, it is likely that many cautious consumers will stick with their frugal spending habits.
Businesses expect that an increasing number of price-conscious consumers will change their shopping habits in order to ensure they achieve their spending targets and stay within the bounds of their squeezed household budgets. In addition to reducing their overall purchases of products and services over the next 12 months, consumers are also expected to shop smarter and emphasise value when choosing to buy essentials by increasing the number of visits to discount stores, buying more private label/store brand goods, and buying more second-hand products.
As many businesses have increased their prices to cover rising costs of raw materials, consumers are economising and looking for ways to stretch their household budgets. Companies are aiming to implement cost-saving solutions to keep prices down and maintain their place in consumers’ minds while still managing to maintain growth. Adopting new marketing strategies and focusing on profitable categories will allow companies to achieve sustained growth.
Industry professionals around the globe identify their most important industry objectives
Industry professionals expect 2023 to become a year of adaptation to new economic realities, cost reduction and search for even higher efficiency. Having spent the last year reacting to disruptions caused by the pandemic, geopolitical threats, stock market volatility and peaking energy costs, companies across industries are now bracing for a year of slowing economies, peaking costs, tightening consumer spending and shrinking margins. As a result, top objectives for companies looking ahead include revisiting potential cost saving routes, adopting new strategies for building their brand and searching for growth in new, current and external markets.
For more insights from professionals across the world, read our report Voice of the Industry: Consumer Lifestyles