How Single Homes Affect Consumer Spending Trends
Globally, household structures are changing and having diverse effects on consumer behaviour, spending patterns and priorities. One of the key changes is the rise in single homes. Since 2010, the number of single homes has been rising faster than any other household type globally, as people focus more on their career and leisure time than on starting a family or living with a partner. The steep increase in their total numbers offers a lucrative and under-penetrated opportunity as well as shaping new consumption needs and trends.
Despite rapid expansion, singleton homes will record the weakest increase in spending
Between 2019 and 2030, single-person households are set to expand by 23.4% and yet their average spending per household is set to rise by only 9.8% in real terms – the weakest rate of increase of all household types. There are several factors behind this:
• Single-person homes have the weakest purchasing power of all household types. They do not have the potential to generate multiple income streams as couple households do and do not have the same access to state subsidies and welfare opportunities as single-parent homes do.
• A dominant and growing proportion of single-person households globally are persons aged 65+. Living mostly off their pension or savings, senior singletons have limited capacity to increase their income and thus must be frugal in their spending habits.
• The second largest demographic typically making up single-person homes are young people (students or young professionals), who can be burdened by debt and are only at the beginning of their earning potential. Thus, they also have limited opportunity to increase their spending over the forecast period.
Opportunities: Targeted campaigns, new markets
Segments ranging from real estate, digital commerce and food to vacations and healthcare are all set to be disrupted by growing demand stemming from single-person homes. This demographic already has a major share in advanced economies and is the fastest growing in most emerging countries.
• Unlocked potential: Few brands target single-person homes directly, preferring to generalise their campaigns towards Millennials or older consumers. There is an opportunity in building products specifically for this demographic, with the benefit of an early-mover advantage.
• New singleton markets: In emerging countries like Bangladesh and India, single-person homes were almost non-existent until recently. Now, rapid growth in this demographic in previously conservative markets dominated by families offers surging potential, particularly in areas like appliances, food and leisure.
• Cost-conscious products: Singleton homes will frequently have a frugal approach to expenditure. Products must, therefore, offer value and sense. For example, multibuy deals (like “buy one get one free”), a popular strategy among supermarkets, are less likely to be attractive for a live-alone buyer than straightforward price cuts.
To learn more, download the report: Future of the Family: Trends in Consumer Spending