Consumers are defying inflation and entering a new experience dimension
How are consumers making purchases today? What about tomorrow and beyond? And why? «PwC’s Global Consumer Insights Pulse Survey» focuses on these issues. In the latest edition in spring 2022, PwC surveyed 9,069 consumers in 25 countries, of whom 2,157 were in Western Europe (Germany, France, Ireland and Spain). The survey indicates that a company’s commitment to sustainability strengthens brand loyalty. What’s more, private consumption is defying inflation. And with the metaverse, this has entered a new experience dimension.
The protection of personal data was stated as the number one trust factor by 57% of all survey respondents. This figure might be due to increased awareness as a result of the recently publicised cases of misuse. Other decisive factors regarding brand confidence and willingness to recommend to others are environmental, social and governance aspects (ESG). The factors dominating the purchase decision are social (Western Europe: 35%, global: 40%) and governance (Western Europe: 34%, global: 41%), compared with environmental commitment (Western Europe: 22%, global: 30%). What’s more, two-thirds of those surveyed in Western Europe stated that they are prepared to spend more on regional products if this means they can support their local economy.
For Generation Z and young millennials, ESG factors carry greater weight than for Generation X and Baby Boomers. With Generation Z, a group of consumers has emerged who are open-minded to ESG topics and are forcing suppliers to become more sustainable.
“Aspects like ‘Fair Trade’, ‘free of child labour’, ‘good working conditions and fair wages’, ‘recycled materials’, ‘organic quality’ and ‘regionally produced’ are becoming more important. Just as important are approaches where companies promise to invest a portion of their profits in good causes.”
As a result of the pandemic, consumers have made huge changes to their lifestyles and their buying habits. 50% state that they are already buying more online. Western Europe is still lagging slightly behind the global trend in this respect (63%). In-store shopping is still popular here, with only 33% stating that they purchase from physical stores less often (global: 42%).
Nevertheless, one-third of survey participants anticipate that they will buy more online in future (global: 50%). This assumption is most prevalent among Generation Z (45%), followed by young millennials and core millennials in Western Europe.
43% of study participants have switched to doing activities at home in their spare time since the pandemic, and 31% will continue to do so (global: 50% and 41%).
The metaverse – a virtual universe with virtual reality (VR) and shared 3D spaces – is emerging as a new consumer world. 29% of study participants in Western Europe have used a VR channel to make a purchase in the last 12 months.
6% of VR users said that they have entered a virtual universe in order to watch a concert or visit a retail environment, and a further 6% have bought digital products / non-fungible tokens (NFTs) like avatars, digital art or digital real estate (global: 11% and 10%).
”The pandemic years have accentuated the increased use of digital channels. Although the metaverse is still in its infancy, suppliers will increasingly need to integrate it into their omnichannel presence. After all, customers expect a seamless experience across all channels.”
Rising food prices are the most frequently stated problem for 68% of purchases made in-store and for 56% of online purchases. Over 75% of survey respondents in Western Europe assume that they will consume the same or more in most categories over the next six months despite inflation. However, more than a quarter are planning to limit spending in certain areas like luxury goods (37%), dining out (30%), art/culture/sport (27%) and fashion (26%).
“In the short term, consumer behaviour won’t be too heavily impacted as people built up savings during the pandemic years. But in the medium term, consumption will weaken if wages develop below average compared to inflation”.