Understanding Consumers’ Earning and Spending Patterns
Insights into consumers’ spending patterns are essential to business success, helping companies understand their target markets and devise long-term strategies based on their consumers’ potential purchasing power. Income and expenditure data not only allows businesses to determine market size and forecast its growth but also provides a uniquely detailed picture of consumer spending patterns. This type of information can help segment the market, assess consumer demand and pinpoint opportunities.
Silver consumers in the beauty and personal care industry
People aged 65+ represent a large and growing consumer group, due to lower birth rates and longer life expectancy. As well as growing in number, older people are generally in better financial health than some younger segments of the population, with a rising number of older people continuing to work and earn an income beyond the age of 65. Additionally, older people have a propensity to save less and spend more in their later life.
The beauty and personal care industry has always been focused on the youth, but businesses are now waking up to the fact that older consumers are the ones with high discretionary spending power. This has been seen in a growing cluster of brands that cast older models in their advertising campaigns. L’Oréal Groupe, for example, has gathered together actress Andie MacDowell (aged 58) and models Helena Christensen (47), Tatjana Patitz and Karen Alexander (both 50) and Amber Valletta (42) to front a campaign for its new, most potent anti-ageing product, Revitalift Laser Renew The Double Care.
Rising opportunities for African internet retailing
Africa’s young, fast-urbanising population, with a burgeoning middle class and strong consumer expenditure growth have led to the narrative of “Africa Rising” and captured the attention of businesses as a key future market. During the 2018-2030 period, real consumer spending in the Middle East and Africa region is expected to grow by 51.5%, equivalent to 3.5% per year on average (compared to the global average of 2.7% per year).
Online retailers such as Jumia, Kunga and Spree have been growing exponentially in Africa to cater for the continent’s young, growing and connected middle class, with rising demand for a wide range of products that store-based retailing cannot meet, due to a lack of shopping malls and gridlocked cities.
Auto-makers bring women on board
Women will still earn 35.7% less than men on average in 2030 and women’s annual disposable income will rise by 29.4% in real terms between 2016 and 2030. Even though the gender income gap is hardly narrowing, the global female consumer market – with 3.6 billion consumers and rising incomes – is too large for businesses to ignore.
Female consumers are becoming increasingly prominent in the automotive industry where cars are not traditionally designed by women with the female consumer in mind nor marketed to them. A growing number of automobile manufacturers including Citroen, Honda, Jaguar Land Rover, Nissan and Volvo now have women working at the top levels of their design teams. By bringing female designers on board, the automotive industry recognises the influence women have on important household buying decisions that include car purchases.
Income and Expenditure Insights
Income and expenditure insights, such as who the consumers are, where they live, how much money they earn and what they spend their money on are truly critical to business success. These insights help companies understand market potential, target consumers within appropriate income bands and devise long-term strategies such as whether to enter a prospective market or which products and services to offer and at which price points.
Euromonitor’s Passport database helps identify key changes in consumer income and spending patterns. For additional insights on Income and Expenditure, request a demonstration of Passport.