The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
The 2010 consumer is a seasoned thrift practitioner who is now leaning towards a more positive post-recessionary [nearly] optimism.
Living through 2009 has left many craving for a happy ending including visible environmental improvements in the real world.
Technology is the luxury many no longer do without, even if traditional high-end luxury feels like it’s in rehab. Consumer homes are temples of technology-led entertainment while cyberspace continues to fascinate more and older consumers, flattening world culture while connecting people in ways more local.
Meanwhile, the recession has pushed consumers to take a long hard look at their own ‘personal brands’ in an uncertain world of shaky currencies and jobs. These concerns extend to health and wellness as consumers realise cosy retirements are no longer a guaranteed part of their future.
Undoubtedly, many consumers will return to pre-recession spending patterns but for some, their views on consumption and their behaviour may never be the same again. Globally, people under 35 will largely retain the values of thrift, simplicity-seeking and green spending that they have been shocked into learning during the recession when they’ve been forced to focus on price and value.
At the January 2010 US Annual Golden Globes awards James Cameron scooped the best director gong and best drama film award for his blockbuster, set to become the most successful film ever made:
“Avatar asks us to see that everything is connected, all human beings to each other and us to the Earth,” he said. A sizable chunk of consumers agree, and feel proud that sharing a passion and receiving recognition from other consumers for their green lifestyles and social responsibility may have replaced ‘taking’ as the new status symbol. Challenging times see people craving care, empathy and generosity and the downturn has made many distrustful of corporate ideology and keen on “cause consumption”. These consumers want to buy from brands who care about society and who are striving to reduce the negative impacts of their products and services on the environment. Companies need to reflect this societal shift which integrates personal values into purchasing choices to stay relevant to this growing global demographic. By aligning themselves more closely to a host of personal and community values close to shoppers’ hearts, they will give their customers a sense of purpose through their purchases.
While the longer-term impact of what’s been called the ‘Great Recession’ remains difficult to discern, it has clearly forced people to re-evaluate their behaviours and attitudes. According to one US blogger: “I’d just rather spend my time and resources on non-material things, a choice that also happens to be better for the earth since I don’t need to consume oodles of resource-gobbling stuff to be happy.” These feelings are just part of a mass of anecdotal evidence suggesting that some are reacting by reorienting their personal goals away from consumption and towards experience and rediscovering feelings of compassion for society and their environment. Significantly, The EU is working on a new indicator that moves ‘beyond GDP’ to account for factors such as environmental progress.
Cause consumption is impacting relationships. US therapists note a rise in bickering within families over the extent to which they should change their lives to save the planet. Thomas Joseph Doherty, a US clinical psychologist affirms that the environment “touches every part of how they live: what they eat, whether they want to fly, what kind of vacation they want.”
These feelings of concern are increasingly felt by consumers in emerging markets beyond the USA and Europe who have an increased appetite for green products. Their sentiments are strengthened by the visibility of the effects of ‘ungreen’ behaviour like pollution and deforestation. Recent months have seen the launch of the first two green supermarket chains in Brazil, with O Mundo Verde launching in January 2010 with 150 branches across the country. “Finally we Brazilians are realizing that no growth is possible without sustainability”, affirmed a woman attending a natural food course. Environmentally oriented working vacations are a new fad in Taiwan, with growing numbers of people choosing to spend their days off with their sleeves rolled up working the land. An early 2010 Polish Foreign Ministry poll found that 83% of Poles favour more financial support being sent to poorer countries, up on the 63% sum in the same poll in 2004.
In 2010, with collaboration and giving such a part of the zeitgeist, it is likely that more brands will embed sustainability allied with generosity in their products, allowing customers to donate to worthy causes. Already IKEA, for instance, match solar-powered desk lamps sold with a gift of one to UNICEF. Climate change concerns are set to become more entwined with everyday life too. Groceries and restaurant menus across Sweden, for instance, are declaring the CO2 emissions per kilogram along with calories in a bid to give equal importance to climate and health.
Source: Euromonitor International from trade sources/national statistics. Note: Market sizes based on retail value RSP. Historic regional/global values are the aggregation of local currency country data at current prices converted into the common currency using y-o-y exchange rates.
Good health and wellness are centre stage. It’s not just about exercise but the empowerment of self-treating and exploring new medical techniques. Spa visits, spiritual fulfilment, social tourism involving volunteering, medical tourism and assorted therapies such as pet therapy, anti-stress therapy, anti-obesity retreats and life quality evaluation form part of an extending ‘long tail’ of wellness treatments. The Argentinean expo-natural digital magazine explains wellness as: “more than a trend, it is a need”.
“Middle-aged people don’t get old anymore,” the head of gerontology at King’s College, London told the UK’s Times newspaper. “They try to make midlife go on by expanding their lifestyle and extending their midlife values for as long as possible.” Many “middle youth” have also taken up new careers, new hobbies and, sometimes, new spouses and families in their 40s and 50s.
Although the recession has been delaying these projects, there is no doubt that we are near to the point when people around the world will think of hospitals and medical treatment as a global commodity, as international standards together with the feeling that an uncomfortable treatment can be turned into a more pleasant experience along with lower prices make this idea more appealing. An interesting development is the convergence of wellbeing and health; an example is the Longevity Wellness Resort in the Algarve. Alongside a spa are services such as blood profiling, and food intolerance analysis.
The commercial impact of the consumer interest in health and wellness will continue to grow, both in terms of services (such as the exercise industry) and in terms of products (healthy eating, diet and organic food). Consumers in advanced economies are increasingly trying to balance indulgence with healthy consumption. Many national and local government policymakers such as the Mexico City mayor, Marcelo Ebrar and tourism officials in the Bulgarian government are encouraging the exploitation of the consumer interest in wellness and lengthier medical tourism visits. Consumers’ own content at blogs such as the eco-tourism-themed yourtravelchoice.org confirms that wellness is high on tourists’ priorities.
In 2010, for the millions of consumers around the world who’ve been forced to downsize, the home is the new entertainment hub. It’s frequently the staycation setting too. This summer’s World Cup will provide an ideal opportunity to see this trend played out.
This year will see even more consumers eating in and socialising in the home cocoon. “People are retreating back into the home,” said Andrew Warner of electronics brand LG, at the January 2010 Consumer Electronics Show in Las Vegas. “Nothing is recession-proof, but people are still buying televisions and audio equipment,” he explained. An October 2009 Irish Times survey found 23% of people are much more likely to be entertaining at home compared to a year ago.
The home is also a meeting place, where one can embrace community, and fits in snugly with a resilient, if thrift- and green-tinged consumer interest in things local. There’s a sense of pulling inwards in neighbourhoods as consumers are reducing their radius. At the same time, the internet and social media can turn anyone into an activist in the big, ‘real world’ although big brands will be forced to engage with local culture if they want to prosper.
Importantly, the home is also the site of an expression of consumer identity through activities linked to décor improvements. For mounting numbers of consumers worldwide, home is also the place to satisfy a whimsical desire for a back to nature feel and for wellness achieved through bringing nature closer to home. In Germany, for instance, the Burda Group is planning a title called “Landglück” (country bliss). This will join four other recent German consumer publications for country-lovers, often urbanites. One of New Zealand’s top nutritionists, Jacquie Dale, in response to the rising local spend on gardening believes: “Home gardens provide a great opportunity for the family to spend time outdoors together away from the couch and the TV screen.”
Source: Euromonitor International from European Audiovisual Observatory/national statistics
Consumers in 2010 will still be chasing happy endings and purchases that make them feel better. Fear of the outside world, of financial troubles, job loss and pollution make them crave a delightful escape from reality. Things like their fascination with cinema-going and vampire films, with celebrity lifestyles and celebrity-endorsed products and reality shows where folks like themselves grab an unpredictable happy ending in real life or “pet parents”, beautiful people social networking and risk free racing in the warmth of their homes lived out through gaming are all part of this hunger for happiness that lingers within recession-fatigued consumers. Online dating sites such as eHarmony who noted hits increased when the Dow Jones Industrial Average fell by more than 100 points highlight the link between financial stress and the consumer appeal of website dating. This happiness quest is global. Think of the joyful consumer reactions to ‘spontaneous’ flash mobs (A group of people who gather suddenly at a predetermined time in a public place to dance or play out another unexpected activity).
This desire for happiness also explains why the feeling that Tiger Woods has let people down has animated US conversations in the New Year. Despite the high divorce rate, Americans prefer the fairy tale. In September 2009, French president Nicholas Sarkozy told the French national statistics agency to include metrics of happiness and quality of life in their measurements of overall economic health.
Savvy consumers in advanced economies know the difference between brands who want to sell happiness and brands that want to facilitate it, and they will endorse those brands that help them find and create happiness within themselves. Values that cannot be bought such as family, love, and friendship are very much at the forefront. This provides a challenge for companies to capture such emotions in their products. Brands would do well to associate themselves with something carefree, possibly to the extent that it makes people “feel like a child again”.
Many consumers associate ostentatious consumption with the corporate greed that they blame for the downturn and numerous commentators see this as a shift in consumer psychology that will endure. Dr Clive Hamilton, a visiting scholar at Cambridge University stresses, the “suffering rich” feel poor which doesn’t bode well for luxury brands. A new generation of Japanese fashionistas does not even aspire to luxury brands and enjoy perusing second-hand clothing stores that have sprung up across Japan. “People used to feel they needed a Louis Vuitton to fit in, but younger girls don’t think like that anymore,” says Izumi Hiranuma, 19.
Status is now expressed instead by lifestyle choices, time, space and knowledge, cultural capital, products with a ‘story’ to tell and the enjoyment of “ecolux” items. At the same time, more discreet classically luxurious items or artisan-made products will still be a symbol for members of your own ‘tribe’ and ‘curated’ luxury ranges will continue to appeal to the wealthy.
While the old rich may be tightening their purse strings, 2010 is simultaneously witnessing a new tranche of consumers. Millions of newly established middle class consumers, particularly in India and China are sampling ‘affordable’ luxury via self-treating on ‘entry level’ luxury products. A slice of luxury could be a short spa treatment, luxury pet foods or chocolates which in themselves don’t signify a luxury lifestyle.
While Western consumers can be expected to take small and tentative steps back into the luxury industry, Asian consumers are embracing luxury in a way that was previously only found in the Middle East. The BRICs and other developing economies are breeding grounds for emerging middle classes that are drawn to the consumption of high-end goods in their more traditional, ‘blingtastic’ sense. With BRIC and many developing economies more buoyant, millions more people have discovered the delights of shopping as entertainment, and consumption as identity rather than necessity. According to Sidney Toledano of Christian Dior, couture is so strategic today because “The emerging countries are becoming sophisticated in a very fast way”.
Several global luxury brands are continuing to inject a local feel into their wares to resonate with local demands. Chanel launched a new collection in Shanghai in December 2009, inspired by Chinese fashion of the 1930s and 1940s. The South Korean online newspaper, The Chosun Ilbo, insightfully headlined the report on the launch: “Chanel Turns to China for Inspiration and Cash”. The Chinese are also becoming expert online luxury consumers. Ten thriving luxury sites include Beijing-based eushophq.com (which saw 40% growth in 2009), Shanghai-based 51bangde.com and Guangzhou-based yide.com. In the scramble to lure Russia’s rich, luxury executives claim to have understood a few basic principles. One is the creation of a personal relationship with wealthy consumers, who are typically younger than in the developed markets of Europe, Japan and the United States. These consumers are increasingly savvy about products they desire, and demand impeccable service.
Source: Euromonitor International from national statistics. Note: Values of fewer than 500 households are rounded to zero. Data for 2010 onwards is forecast.
Consumers are transforming themselves like brands – revising the presentation of themselves and what they are about/they offer online and in the real world. They can do this through what they wear, what they know and have recently learnt through training and retraining, and via attention to wellness and even plastic surgery. Consumption is still about defining yourself through what you buy in terms of sending out signals to others, but it’s gotten more personal.
Consumers care less about brands. They want self-focused content but it will now be more up to them to embody a story with what they consume. Buying from niche brands means they can’t rely on products or services to provide them with that instant recognition and admiration from their peers. The ‘mass’ that consumers are willing to put up with is typically made up of products they don’t really care about (and, can get for less at discounters).
The idea of the person as a product ties in with the current stress away from the group and on individuality, especially among Asia-Pacific consumers. The ‘me as a product’ trend is also linked to the fascination with Web 2.0 and mobile communications. Me as a brand is not only but largely an online phenomenon as so many fellow consumers, potential partners and increasingly company brands we communicate with are online, while every posting and blog comment is glued onto our online personas. Expected debates on privacy reveal a clear generation chasm with younger consumers less worried about safeguarding it.
The economic downturn has meant that millions of consumers now recognize lifelong training i.e. constant rebranding as a fact of life and are going for “edutainment” offerings (personalised and playful learning tools). Consumers in emerging markets are exploiting a wide range of self-development tools in order to learn, earn, and achieve the aspirational lifestyle they desire. This trend takes in:
The thinking on globalisation has matured. While consumer analysts have stressed a renewed consumer interest in things local, our world, largely through the influence of cyberspace, continues to be driven by global influences and lifestyles.
Drivers of cultural flows include urbanisation and global mobility, particularly the “extreme commuters” – real citizens of the world, as well as the spread of media devices, immigration and social integration and increased exposure to other cultures. The exchange and blending of cultural influences – brands, products, art, books, lifestyles – at a global level – exposes individuals and societies to new ideas and ways of thinking.
The biggest change in South Korea, for instance, is arguably an increasing multicultural Korean society. Euromonitor International figures show that the number of foreign residents neared one million in 2009, and that this segment grew by 73.6% between 2003-2009.This figure includes expatriates, foreign students, and Korean men marrying foreign wives.
The new outward-looking middle class in many African cities, the so-called Afropolitans, for instance, are the face of a renovating Africa. Today’s growing upwardly mobile class are both globalised and localised in their aspirations and anxieties, proud of being African and ready to bring a new image of the continent to the world. As a witness to this trend, Kenyan retail chain Nakumatt keeps expanding with malls in Uganda, Tanzania and Rwanda. “It’s psychological – people want upward movement,” said Thiagarajan Ramamurthy of the company.
The latest wellness trends have to do with the consumer demand for a spiritual vibe and even ancestral cultures, competitive advantages that many tourist destinations are now enjoying as the economic downturn has also brought another need: mental health. Budget airlines and accommodation and extended travel are also part of this consumer interest in exotic lifestyles.
Many consumers have found that they’ve quite liked holidaying at or closer to home for their holidays even though thrift was the main driver. Many stressed out and exhausted consumers relish the idea of spending their free time at home; often it’s the widely travelled that are realising their own country’s vast potential for tourism. Staycations are also ideal settings for ‘experience consumption’. Rather than buying things, consumers are increasingly engaging in shared activities that can occur in places ranging from the hiking trail to the cinema, galleries and museum and their kitchens and gardens. The growing sophistication of personal gadgets has also encouraged a trend towards “outdoor cocooning” as netbooks, smartphones and media players allow consumers to shut off their physical surroundings and enter their own world as they do in the home. Staycations also fit nicely with the knowledge among the environmentally-aware that faraway holidays aren’t green.
Staycations are now a global phenomenon that goes beyond countries like the USA, UK and Germany. The Japan Times reports that Japanese consumers are seeking to economise and ease the stresses of daily life by shopping online, watching DVDs and eating in, converting their homes into comfortable ‘nests’. This phenomenon is known as “sugomori”. Unlike staycationers in the USA and Europe, Japanese “nesting” is all about staying in and home entertaining and online mail order companies selling FMCG like baking ingredients and bread makers are reaping the rewards.
Economic anxieties mean that many young Chinese are also opting for a staycation. “In the past, a lot of students would go to Europe for a holiday after they graduated from university,” says Hu Yang, the co-founder of a chain of youth hostels and budget hotels. “But this year it’s not so easy to find a job. So now more young people want to wait until their life is more stable before going abroad.” The tastes of young Chinese travellers are also changing, says Hu, and they are seeking more relaxed and unique holiday experiences. Destinations such as Naked Retreats, a new eco-resort west of Shanghai, are becoming popular with young urbanities, offering outdoor activities such as trekking and climbing, and the opportunity to eat fresh, simple, local food. In South Korea, a trend regaining popularity is “experience leisure”, taking in exploration, nature and eco-travel.
Consumers globally have had time to become adept at practicing thrift to the extent that for many it has become routine. Even if 2010 will be seen as a post-recessionary period in many countries, a tendency to flit from one offering to another is likely to be lasting as consumer loyalty to brands and traditional ways of shopping had become diluted.
Even timid consumers have become skilled at bartering, fluent users of comparison websites and comfortable with online group buying. A bargaining culture is taking hold in major US stores like Best Buy according to the New York Times. Thrift has the bonus of making consumers appear greener to their peers too. Online resale sites such as eBay have been joined by niche sites such as Ex-Boyfriend Jewelry.com while the trend for “swishing” – finding new homes for trendy clothes by swapping them – is on the rise and a hit with fashionistas via sites in countries like the USA, China, South Africa and Brazil. In addition to being consumers, many onliners are sellers too. According to China’s top auction website Taobao, a total of 63 million Chinese were running internet businesses at the end of June 2009. Thrift has also altered consumer aspirations. Tens of thousands of what Mexican newspaper El Financiero calls “Migrant consumers” are taking advantage of stronger currencies to shop across borders. Mexicans and Canadians are coming to the USA and Australians are going on “shopovers” all over Asia.
In 2010, all successful consumer products and services will be thrift-savvy to appeal to the sustained consumer association of value as quality, not just price. This awareness is reaching younger ‘digital native’ consumers. A popular iPhone/iTouch app, for instance, is called My Shopping Lists. “Have you ever been shopping and ended up not buying what you originally set out to buy?” reads the promo. This product steers consumers away from consumption temptations with tips leading them back to the straight and narrow path of their original shopping lists. Another app for frugalistas, RedLaser, allows mobiles to read barcodes before coming up with a list of comparable prices of that product from a range of websites. Thrift has also made it onto school curriculums. 2010 will see UK schoolchildren from primary school onwards given compulsory lessons in budgeting and avoiding debt.
An early 2010 NY Times piece profiles “New Poor” middle class US consumers who have learned to value experiences over purchases. These include a former “buy, buy, buy” family in Miami whose “priorities have shifted from products to activities” and who are pictured in the used canoe they bought through Craigslist. Attendance at cultural venues and events, already up for the first time in several years in 2009, is expected to soar in 2010. “It’s a different kind of recession,” said Richard Florida, author of several best-selling books about the economics of cities. “It’s not like in the ’30s when people stopped going to concerts. Now people seem to be keeping up with experience consumption and cutting back on other necessities.” For more on the New Poor, please refer to the following Euromonitor International pieces: Special Report: The “new poor” in developed economies as the risk of poverty increases among middle class households and Bye bye bling bling: Middle class New Poor struggle to cope with recession.
Source: Euromonitor International from International Telecommunications Union/World Bank/Trade Sources. Note: Data for 2010 is forecast.
Euromonitor International figures show that there were 1.8 billion global internet users in 2009. All of these have shifted parts of their lives online. Our hunger to stay connected persists. More older people are internet-savvy and overcoming security and privacy concerns to buy online. The fastest growing segment on Facebook is 55-65 year-old females. At the same time, the rapid pace of technology is creating ‘micro generations’, where even teenagers are left behind by younger siblings. California professor, Larry Rosen, shows 16 to 18-year-olds can perform seven tasks on average in their free time (texting, checking social networking sites, watching TV etc.) overtaking people in their early ’20s (6) and those in their early ’30s (5.5).
Pope Benedict XVI will use his World Communications Day message in May to encourage the clergy to start blogging and using the internet and social media to connect better with their flocks. For millions of consumers, having an audience for their online output is a status symbol. Social networking is predicted to play a huge role in this summer’s football World Cup. Several studies have confirmed that people feel cut off when the internet goes down, or mobile coverage is scant.
The documented consumer reliance on peer review when planning purchases continues to challenge and transform advertising and brand behaviour. Consumers are partners now. As head of US ad agency Droga5, Dave Droga says: “The best type of advertising is participation advertising. The day when we were just storytellers is over.” Despite a recent legally-enforced transparency in the USA on what is known as “blogger payola” – bloggers praising brands in return for cash/giveaways – consumers remain keen to blog about their good and bad consumption experiences.
Consumers now crave being updated in real time which explains the millions of sites, services, instant verdicts on products and services, allergen updates and apps that facilitate instant checking, tracking, alerting, visualizing and mapping. Singer John Mayer puts it well: “You don’t go, ‘ I’m gonna put this conversation with the woman I love on my iPod and listen to it on the subway’. You have to be present, in this synthetic, listen-later sort of world.”
Another billion people in developing nations can’t wait to join the digital bandwagon: soon their phones and low-cost netbooks will come equipped with some kind of online connection. The recent launch of Facebook Lite, a pared down version of the site for users with slow internet connections hopes to boost membership numbers in areas such as India and South America.
The impact of this Web 2.0 revolution is spilling over into the ‘real world’ which is adjusting to and mirroring the increasingly dominant online world, taking in everything from tone of voice to product development to customer relationships. Big brands have digital care directors and corporate Twitterers etc.
Web 2.0 is free time for millions. Gerd Leonhard, futurist and writer, points out: “Kids now only listen to music, they don’t download it. Developments like WiFi, 4G iPhones, fancy Nokias, have all turned streaming music into the new radio.” Consumers skip television ads, but they will listen to a sponsor message when they get free music in return. Consumers have also demonstrated that they will upgrade to technology they perceive as desirable that keeps them connected. More than half of 3,000 Britons surveyed before Apple’s new iPad tablet computer was unveiled at the end of January 2010, said that they wanted it, no matter the price; the hype surrounding these devices transforms launches into cultural events.