November 11, 2023
Amidst global economic uncertainties, a new report from EY indicates that while 94% of respondents remain “concerned about the cost of living,” nearly 89% are also concerned about climate change.
The EY Future Consumer Index (FCI), in its 13th edition, draws insights from over 22,000 consumers across 28 countries, shedding light on evolving consumer behaviors and priorities.
Higher climate change concerns, fewer non-essential purchases
As the EY survey shows, a significant 54% of consumers are planning to cut down on future purchases as a result of their climate change concerns. This decision is made in an effort to save money, as 73% of respondents say, and a belief that new items are unnecessary, held by 49% of surveyed consumers.
What products are consumers planning to spend less on? Around 61% of respondents say they are planning on spending less on fashion accessories; 51% would reduce spending on toys and gadgets and 44% would avoid buying clothing and footwear.
Furthermore, 80% of consumers intend to decrease spending on socializing items, with 41% saying this is because they are trying to spend more time at home. As EY underlines, this represents a 6% increase compared to October 2022.
The report also reveals a rise in home-based activities, with an increase of 9% in cooking and 5% in home entertainment compared to October 2022.
Simultaneously, there is a 12% uptick in consumers planning to order less takeout food compared to October 2022, with 43% of respondents now saying they are planning to order less.
“Consumers have proven time and again their ability to adapt to the cumulative disruption they have faced,” said Kristina Rogers, EY Global Consumer Leader. “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.”
Although 61% acknowledge private labels as cost-effective and 64% say that the products meet their needs just like branded goods, the EY report shows that consumer interest in these products has “declined across all categories”: Around 35% of consumers are now willing to pay a higher price for products from brands they trust, 10% more than in February last year.
Festive season buying: Americans and Europeans planning to spend less, Chinese consumers to spend more
Despite ongoing financial concerns, however, consumers globally are gearing up for festive shopping events, with 61% planning to participate in events such as Black Friday and Singles’ Day.
This reflects a 16% point increase in online shopping during the festive season, contrasting with a 14% decline in in-store purchases compared to the previous year.
Notably, consumers in the US and Europe plan to spend less this festive season (39% and 35%, respectively), while Chinese consumers are more willing to spend more (45%).
Consumer adaptation to climate change
In the wake of extreme weather events, rising energy costs, and changes in harvests, 42% of consumers are considering changing their food choices due to climate change’s impact on prices and availability.
Disturbingly, 29% have already been compelled to make such changes. A quarter of consumers are proactively purchasing products to protect themselves from climate change effects.
Furthermore, 48% of Gen Z and millennials are contemplating or have relocated to milder climate areas, while 62% are adapting or considering adapting their homes to climate-related challenges.
The report also underscores generational disparities in sustainable practices. Older generations are actively adopting sustainable behaviors, such as bringing reusable bags to stores (65% of baby boomers) and recycling or reusing packaging (63% of baby boomers).
Younger generations, while vocal about sustainability, are translating intentions into actions, with 37% of Gen Z willing to pay more for sustainable goods compared to 29% of baby boomers.
“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,” Rodgers said.
Driving change: Whose responsibility?
A substantial majority of respondents, 67%, say their efforts to drive change are a result of their “deep concern for the fragility of the planet.”
Around 56% say consumers should play be compelling companies to enhance their social and environmental impact while a resounding 73% assert that it is the responsibility of companies themselves to take the lead in driving change.
Additionally, an overwhelming 77% believe the governments should be leading the change.
“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,” Rogers said.
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This article was originally published on IMPAKTER. Read the original article.