EY Future Consumer Index: Consumers learning to live with less as climate change and cost-of-living reality hits home
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- 71% of consumers planning to delay purchases until festive sales events
- 54% of consumers planning to spend less to save money
- 46% of consumers extremely concerned with growing climate change
While 80% of consumer respondents globally remain concerned about their finances, almost half (46%) are extremely concerned about climate change. This is according to the 13th edition of the EY Future Consumer Index (FCI), which surveyed more than 22,000 consumers across 28 countries.
Over half (54%) of consumers are responding to their concerns by planning to buy less in the future, in an effort to save money (according to 73% of respondents) and because they feel they don’t need new items (49%). However, 39% of respondents from across the globe attributed spending less to helping the environment. Fashion accessories topped the list of product categories consumers plan to spend less on (cited by 61% of respondents) followed by clothing and footwear (44%). In addition, 80% of consumers are planning to spend less on items for socializing as they look to spend more time at home (cited by 41% of respondents, an increase of 6 percentage points from October 2022).
Seeking ways to stretch their budgets, respondents also plan to cook and entertain more often at home when compared with October 2022 (up 9% and 5%, respectively) and are sacrificing takeout food, with 43% now planning to order less, (up 12% from October 2022). Despite 61% of respondents stating private label is helping them save money 64% stating that these products satisfy their needs just as well as branded goods, consumer interest in private label has declined across all categories. Results from the study now show that 35% of consumers are increasingly willing to pay extra for brands they trust — up 10% from February 2022.
Festive shopping events drive consumer participation
This festive season, large sales events will continue to attract consumers, with 61% of respondents globally planning to take part in events such as Black Friday and Singles’ Day (75% in China, 54% in Europe, 50% in the US), an increase significantly in China compared with November 2021. Seventy-one percent stated that they plan to hold off on making some purchases until these event days, compared with just 48% in November 2021. FCI 13 reveals a 16 percent point increase in consumers shopping mostly or only online this festive season, with a 14 percentage point decline in shoppers purchasing items “mostly or only in-store” when compared with last year. However, with little changes to overall planned spending this season, respondents remain highly conscious of their available budgets. Consumers in the US and Europe are planning to spend less this festive season (39% and 35%, respectively) when compared with Chinese consumers, (11%), many of whom plan to spend more (45%).
Kristina Rogers, EY Global Consumer Leader, says:
“Consumers have proven time and again their ability to adapt to the cumulative disruption they have faced. They are constantly re-evaluating what they deem to be essential and are increasingly avoiding non-essential impulse purchases. But experience remains critical as a deciding factor for consumers when choosing to shop online rather than heading to a store.”
Consumers are adapting to climate change-related needs
After a summer of extreme weather events, rising energy costs and continued changes to harvests and crops, consumers are confronted with the real-time effects of climate change. Forty-two percent are thinking of changing the food they eat because climate change has pushed up prices or limited availability, and 29% have been forced to make new choices already. The percentage of consumers that have already started to buy products that protect them from the impact of climate change is also high, at 25%. The impact felt goes beyond food and products, with 48% of consumers aged 18-42 (Gen Z and millennials) relocating or thinking about relocating to an area with a milder climate, and 62% adapting or thinking about adapting their homes to accommodate climate upheaval. More consumers cited considering making these changes compared with those who have already done so, indicating more adaptive behavior is to come.
Generations act and spend differently on sustainability
The FCI further highlights that consumers want to buy better for themselves and the planet – a notion often proclaimed by younger generations but acted upon by older generations, according to current FCI data. Older generations are more active in adopting lifestyle behaviors to reduce their impact: 65% of baby boomers (58-76 years of age) bring reusable bags to the store compared with just 43% of Gen Z, and 63% of baby boomers recycle or reuse packaging after use, compared with 48% of millennials. Of these two examples of sustainable actions, European consumers were the most active, when compared with the US and China. Yet, when it comes to spending more sustainably, younger generations are speaking with their wallets and double-checking company claims. Thirty-seven percent of Gen Z indicated that they are willing to pay for more sustainable goods and services compared with 29% of baby boomers. Thirty-one percent of Gen Z have checked the sustainability ratings of products compared with 18% of baby boomers.
Responsibility for change
More than two-thirds (67%) of respondents attribute their efforts to drive change to their deep concern for the fragility of the planet. While 56% of respondents believe consumers should be pushing companies to achieve better social and environmental outcomes; 73% say companies need to lead the change and 77% say government should lead the change.
“We are now seeing a tangible change in consumer perceptions and behaviors. They are not just looking to consume more sustainably but are having to adapt their lifestyles to help address the challenges that climate change is bringing. Historically, there has been a gap between intention and action for governments, companies and consumers themselves in their efforts to address sustainability, but the real effects of climate change on people’s lives is narrowing that gap and will force an acceleration in the actions taken by consumer companies to build business resilience and support the necessary changes consumers will make in what they buy and how they buy it.”