As the world emerges from the COVID-19 crisis, consumers plan to fundamentally change how they spend money and live their lives. According to the sixth EY Future Consumer Index, people are more worried about their health, families and futures than they were in October 2020, when the last Index was published. Many expect life to get harder, not easier. People’s concerns and what they value will continue to evolve, including:
- 63% of consumers said price will drive their purchasing choices three years from now;
- 69% of consumers believe brands must positively change the world; and
- 62% of consumers would share personal data for healthier product recommendations.
Consumers Are More Concerned, Not Less
Compared to the EY Future Consumer Index from October 2020, people are more worried than ever: the percentage of people who think they will live in fear of COVID-19 for at least another year has risen from 37% to 40%. Some 59% of people now said the pandemic has changed their life significantly, up from 53% in October. And 64% of those who said COVID-19 has changed their life believe it will remain changed even after the pandemic has been brought under control.
“The big question is: what might the impact of a largely vaccinated population and a renewed sense of freedom be for future of consumerism? Some say we’re in store for another era like the ‘Roaring ’20s,’ while others believe that it will take time for some to feel comfortable setting aside social distancing practices,” said Kathy Gramling, EY Americas Consumer Industry Markets Leader in an interview with Retail TouchPoints. “According to our Future Consumer Index, 39% of U.S. consumers expect that life will be the same after receiving the vaccine and 15% think life will be worse. There is still a significant level of discomfort doing everyday activities, as more than half of all Americans are still uncomfortable exercising in a gym (57%), going to a theater or cinema (62%), going to a bar or pub (64%), going to experiential events (64%) and traveling on public transportation (66%).”
Consumers will continue to make deep and permanent changes to their lives. While some of these shifts have been forced on them, many are the result of choices to live differently. Some 48% of consumers globally believe post-vaccine life will be better than before the pandemic, and 36% say COVID-19 accelerated changes they had always wanted to make, reflected in their attitudes around online shopping, product affordability, personal health and sustainability.
How Consumer Behaviors Will Change by 2024
Beyond the pandemic, consumer spending will reflect the different ways people expect to live their lives, including how they will make choices and what really matters to them. Asked to look ahead three years, most consumers said they will prioritize affordability or their health. Others will focus on environmental or societal purpose, but a minority intend to catch up on lost time and live in the moment.
While geographic differences around affordability, health, sustainability, social impact and experience define consumer segments, these issues apply to all consumers globally:
- Affordability: Globally, 58% plan to be more aware and cautious of their spending in the longer term, and 63% said price will be the most important purchase criteria for them three years from now.
- Health: 57% of consumers want to make healthier choices in their product purchases in the longer term; 43% said health or “what’s good for me” will be the most important purchase criteria.
- Sustainability: 49% will prioritize the environment and climate change in how they live and the products they buy; for 26%, sustainability will be their most important purchase criteria.
- Social impact: 56% will be more likely to buy from companies that ensure what they do has a positive impact on society; 38% will buy more from organizations that benefit society, even if their products or services are more expensive.
- Experience: 37% will be less inclined to get involved in experiences outside the home on account of health and safety concerns; 76% have changed the way they stay entertained.
“As we look to the future, we need to acknowledge that consumer trust is still fragile — and the uncertainty that the last year brought will take time to repair,” Gramling said. “When we first launched the Index in April 2020, nearly a quarter of U.S. consumers said they completely trust brands (23%) and retailers (24%). One year later, the trust picture is much worse, with only 10% of U.S. consumers who completely trust online-only retailers and chain retailers. What’s more, once trust is lost, companies risk losing the consumer completely: 47% say when an organization damages trust, they decided not to purchase from them at all.”