Megatrends: Middle Class Reset

January 2022

Even as the middle class in many countries are struggling financially as well as facing economic uncertainty, middle-class consumers continue to be an important (if not the most important) target for global businesses. Insights into the Middle Class Reset and associated trends can help businesses stay relevant in the long term and succeed.

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Key Findings

Middle-class consumers are shifting away from conspicuous consumption

If the accumulation of material things was previously a marker of success for middle-class consumers, the global middle class is shifting away from wasteful, conspicuous consumption towards more selective and conscious spending.

Value is not all about price

Middle-class shoppers’ purchasing decisions are driven by the pursuit of value. They are increasingly conditioned to buy on discount, but are also seeking intangible values including quality, convenience, experience, authenticity and sustainability.

The need to adopt various strategies

Either to stretch their limited financial resources or to reduce environmental impact, middle-class consumers are placing lower importance on ownership. This requires companies to be flexible and adopt a variety of business models and strategies, from repairing and reselling through to renting and offering a service.

The importance of technology

Technology empowers the consumer by giving them more information and more choices, but it also allows brands to engage with consumers, disrupt the market/industry, and exceed consumer expectations. Today, amid the COVID-19 pandemic, middle-class consumers rely on technology more than ever before.

Emerging and developing markets to rise in importance

The Middle Class Reset is a megatrend that started off in developed markets where the squeezed middle class reassessed their values and priorities. Yet the trends associated with this megatrend are also prevalent in emerging economies, making them important markets for brands whose main target is middle-class consumers.

Scope
Middle Class Reset
Key findings
Five core drivers are shaping the Middle Class Reset megatrend
Shifting Economic Power
Population Change
Environmental Shifts and Pressures
Technology
Changing Values
Middle Class Reset: key trends
Fickle consumers
Case study: Apple Inc innovating to offer immense differentiating value
Case study: Xiaomi pursuing a 3-pronged strategy to win smartphone users
Trading up, trading down
Case study: Moët Hennessey ( LVMH) launches high-end Volcan de mi Tierra tequila
Case study: Carrefour launches affordable organic range in Brazil
Glorified frugality
Case study: IKEA introduces Circular Hub selling used and discounted furniture
Case study: Second-hand app Xianyu complements Alibaba’s marketplace in China
The sharing middle
Case study: Ralph Lauren develops customer relationship through renting services
Case study: Carsharing benefits from personalisation and automatisation
From having to being
Case study: Ariana Grande headlines Fortnite’s Rift Tour
Case study: DeLonghi promotes at-home coffee experiences
Thrill of the deal
Case study: Lidl attracts middle-class deal seekers with new app
Case study: Alibaba makes bargain hunting entertaining with livestreaming
Middle Class Reset in brief
What does the future hold
What to focus on
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