12 minute read 17 Nov 2021

The global pandemic is far from over, but consumers are ready to move on, according to the latest EY Future Consumer Index.

A photograph of a boy catching snowflakes out of a car window.

People are moving on; be part of their normal

Kristina Rogers
By Kristina Rogers

EY Global Consumer Leader

Global leader for consumer industries. Marketing strategist. Worked in 20 countries. Harvard MBA. Photographer. Scuba diver. Canadian fiction reader. Mother of two.

12 minute read 17 Nov 2021
Related topics Future consumer index Consumer products and retail Sustainability Customer Digital
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The global pandemic is far from over, but consumers are ready to move on, according to the latest EY Future Consumer Index.

In brief
  • People want to start making consumption choices born from aspiration rather than necessity – to stop reacting to events and start creating the life they want.
  • Consumers care less about affordability and their own health and more about the quality of what they buy and how they use their time.
  • Companies that take four key actions now can become an integral part of the consumer’s post-pandemic life.

After two years of acute economic and social instability, it’s still too soon to say that the COVID-19 pandemic is behind us. While some countries have brought the virus under control, in others infection levels remain high. And there’s always the risk of dangerous new variants emerging. Even so, it does finally look like consumers around the world are starting to move on.
People throughout history have bounced back from era-defining events like plagues, wars and natural catastrophes. First there’s a shock that has to be survived. Then there’s a period of crisis that has to be endured. Finally, there’s a rebound – changed by the events they’ve experienced, people try to create a new life for themselves, and a better world for future generations.

We’re entering that third phase now. Our eighth EY Future Consumer Index suggests consumers have come to expect this kind of uncertainty and disruption; there’s nothing the pandemic can throw at them that they’ve not already seen. They want to make consumption choices that are born from aspiration rather than necessity. They want to stop reacting to events and start actively creating a normal life again. They care less about affordability and their own health, more about quality of experience and the future of the planet. Our research identifies three underlying considerations that consumers will have front-of-mind as they shape their new version of normal:

  • Risk and threat have become everyday concerns.
  • People value quality more – of product, experience and time.
  • Digital is becoming life’s default channel.

For consumer products companies and retailers, this is a key chapter in the COVID-19 story. Will your business rebound too? Can you reimagine your strategies for long-term value creation, aligning your purpose and portfolio around the consumer’s emerging post-pandemic priorities? This is an opportunity to become a relevant partner in the consumer’s effort to shape a new life. For many, this will require a profound transformation. Here are four actions to consider:

  1. Analyze your festive sales season data with a different lens.
  2. Invest in the data and technologies that can make you a trusted part of the consumer’s life.
  3. Make it easy for people to move back and forth between physical and digital channels.
  4. Transform your business model for an age where people want to consume better, not buy more.

Consumers want a better version of normal

Consumers around the world want to get back to a feeling of normality, with 77% saying this is something they are looking forward to. But what will that normal look like? Life won’t simply return to its pre-pandmic norms. The fabric of daily life has changed in so many ways, from how people travel and seek entertainment, to how they work and how they educate their children. Consumers now aspire to something different.

Many consumers want and expect at least some of their forced changes to stick. As a result of the pandemic, they are enjoying the chance to live and work more flexibly, they have a better work-life balance, and they have saved money. Looking to the future, 30% want to keep working more flexibly and 31% expect a better work/life balance.

The new behaviors they’ve had to adopt now feel normal to 63%. Once the pandemic is brought under control, 50% expect their lives to remain significantly changed. For these consumers, the “move to normal” is not a return to how life used to be, it’s an active effort to create something new.

Throughout the pandemic, the Index has tracked how consumers want to live once the crisis is over. Over the last 18 months we’ve seen a significant change in consumer attitudes, which will impact their future behaviors, purchase decisions and preferences. Recently, there’s been a compelling shift from a focus on “my health, my wallet” to a focus on “me and my planet.”

Three consumer changes will shape a new normal

So, what will the new normal look like? It will be different across countries and consumer segments, but three features stand out:

1. Risk and threat have become everyday concerns

The experience of living through a pandemic has changed the way many consumers think and feel about risk. They will maintain a heightened sense of awareness to risks to their health, mobility and financial situation, and they’ll be more focused on not wasting their time.

This “always on emergency” mindset is not only a result of living under COVID-19. The geopolitical and economic landscape has become increasingly unstable and unpredictable. Concerns about inflation are growing. Supply chains continue to be fragile. Climate change is becoming a priority for everyone.

Consumers might be worrying less about COVID-19, but they have plenty of concerns to take its place.

  • Thirty-five percent feel lonelier now than prior to the pandemic
  • Fifty-two percent are much less likely to go out now unless they have to
  • Seventy-five percent are concerned about their finances

Their financial and mental well-being is under stress, they are exhausted by the pandemic, and this is affecting how they feel about spending money. The majority of consumers want to build up their savings, and it’s the younger generations – often seen as the most spendthrift – who are most determined to pile up a cash reserve.

2. People value quality more – of product, experience and time

Post-pandemic consumers are setting new priorities around how and when they use their money and time. Many learned to live with less during the pandemic, now they want to buy better rather than more. People also want to consume less overall. 59% are thinking more carefully about how they spend their money.

Being at home more has shown many people that they own too much stuff. They want a space that’s less cluttered, and they are more aware of the environmental impact of throwing things out. Others have had to cut back because their finances are tight.

Consumers are avoiding spending on unnecessary products and experiences – not just because that’s good for their finances, but because it’s good for the planet. Ownership no longer confers status. There’s growing interest in products and services that can be kept in circulation longer, through rental, subscription, or resale. For example, 53% say they are more likely to repair something than replace it, if they can.

Saving money is the top reason for no longer purchasing physical goods, but there are nuances across geographies with consumers in India, China, Mexico and Brazil doing so from a need to help the environment.

At a category level, the shift to new priorities is pronounced. For example, 48% say the pandemic showed them they have more clothes than they need; 47% say they do not need to rely on beauty products or cosmetics because they feel more comfortable in their own skin.

3. Digital is becoming life’s default channel

The pandemic has changed the consumer’s relationship with digital technologies. For months on end, it was difficult – or impossible – to shop, work, learn or socialize without a digital interface. In some cases, this was a small and welcome change. In others, it has been a profound and difficult adaptation. But either way, digital technology is now accepted as a normal way of having these interactions.

Researching a product and then buying online with click-and-collect or home delivery has become part of a normal shopping experience. The capability existed before COVID-19, but its adoption has been massively accelerated. As COVID-19 evolves and new crises emerge, consumers will continue to rely on digital to stay safe as well as manage their personal and professional lives.

  • Fifty percent of consumers say the way they use technology has changed for the better since the pandemic.
  • Forty-six percent continue to work remotely.
  • Thirty-seven percent are shopping online for products previously bought in stores.
  • Thirty-four percent have increased their spend on streaming video services in the last six months.

Flexibility is an increasingly important priority. Consumers will incorporate brands into their lives that give them flexibility they can control, whether they are working, shopping or looking for entertainment. This will change travel and consumption patterns as consumers recalibrate their physical and digital footprints.

With more consumers accepting the value of digital experiences, there’s more attention on the quality of those experiences. People want digital to give them the high levels of service and experience normally associated with the physical world, and they want a seamless and consistent experience across both realms.

But these expectations are not borne out in reality. Consumers are frustrated by the disconnect – from the cost of delivery and shipping associated with digital to the lack of in-store product availability and poor experiences. Clearly, there are challenges for companies to address across supply chain, inventory and logistics so they can improve the quality of experience and service they offer for their physical and digital touchpoints. Given that consumers are now much more discerning in how they spend their money, it’s imperative that brands make removing these points of friction a priority.

How EY can help

Customer experience

When it comes to serving the customer of the future, the answers lie in being client-centric, especially in today’s world.

Read more

The festive season as a bellwether

How quickly will these new behaviors become embedded? The festive shopping season will give us valuable insights into how fast consumer sentiment and behavior is changing. Pent-up demand could drive sales higher, with consumers looking to make up for lost time, but this has to be balanced against the prevailing economic headwinds and continued supply chain shocks. And as we’ve seen, the EY Future Consumer Index suggests many people are fundamentally changing how they feel about consumption:

  • Forty-nine percent plan to shop online during the next big shopping/sales event.
  • Forty percent expect the festive season to be more like it was pre-pandemic.
  • Twenty-seven percent say they plan to spend less during the holiday season.

Additionally, this year it will be Millennials and Gen Z who plan to spend more during the festive season; 38% of them say buying more things makes them happy. As these generations are likely to have young families and/or are finally making higher wages, they will be looking more to physical goods or experiences to create long-lasting memories.

Consumers are moving on; will you be left behind?

As consumers move on to define a new version of normal, consumer products companies and retailers can rebound too, shaping a new future for their organizations and their brands. Here are four actions to consider:

1. Analyze your festive sales season data with a different lens

This year’s festive trading period is more important than ever. It’s likely to be your first big opportunity to see how emerging consumer behaviors are impacting your brands and understand your future consumer. But getting to those insights will require a deeper layer of analysis. Can you go beyond the typical metrics to learn about the future consumer’s mindset, values and habits, and how changes here could influence purchase decisions? Better analysis now will help you deliver against consumer and investor expectations in 2022 and beyond.

2. Invest in the data and technologies that can make you a trusted part of the consumer’s life

Consumers are moving on but are still cautious. They want brands and experiences they can trust, brands that follow through on their promises – whether it’s a delivery that arrives on-time or the provenance of a product. Those companies that win and secure trust will become an integrated part of the consumer’s life. It’s no longer about the customer being in the center of your world, but you being in theirs. It requires a shift in mindset. Where can you generate value the customer appreciates (and that works for you, too)? What technology capabilities will it take to make that happen?

3. Make it easy for people to move back and forth between physical and digital channels

Finding ways to connect to the consumer directly has never been more critical. With people shopping more online and spending more time at home with their mobile, tablet or laptop, traditional ways to engage no longer hold the value they once did. Consumers will be increasingly able to pick and choose where, when and how they engage with brands – and they want to move seamlessly between the physical and digital worlds. With the lines between the two blurring, whether it’s replicating real life on digital or the immediacy of digital in store, consumers expect the best of both worlds. Creating a cohesive experience and removing any points of friction that interrupt it will be fundamental to success.

4. Transform your business model for an age where people want to consume better, not buy more

More people are reshaping their consumption habits. Some want to do more to preserve the planet; others just want to buy less, but buy better quality. Understanding what’s driving customers’ purchase behavior could require a radical response from you. For instance, could you streamline and rethink your portfolio to deliver products that last longer – through redesign, or subscription, rental or resell models? It could take a refreshed approach to quality, sourcing and service to successfully drive this shift, to keep existing customers happy or attract new ones, and to maintain their loyalty. If you move to a ‘better rather than more’ world, what new services, content and experiences will you create to drive new sources of value and revenue?

  • Methodology

    We surveyed 16,000 consumers across the South Africa, Mexico, France, Japan, Germany, Indonesia, UK, Brazil, China, India, Australia, US, Saudi Arabia, Italy, Canada, New Zealand, Spain, Sweden, Finland and Denmark during the weeks of 6 October through 25 October 2021. The survey questionnaire covered current behaviors, sentiment and intent.

Summary

The COVID-19 pandemic isn’t over, but consumers are ready to move on. People are desperate to create a sense of normality in their lives, but that doesn’t mean they want a return to life as it used to be. The pandemic experience has changed people in profound ways. Faced with deep economic uncertainty, a growing climate crisis, and a heightened sense of risk in general, consumers now have a very different set of priorities. Organizations that take four key actions can become an integral part of the way people consume, work and play in the years ahead.

About this article

Kristina Rogers
By Kristina Rogers

EY Global Consumer Leader

Global leader for consumer industries. Marketing strategist. Worked in 20 countries. Harvard MBA. Photographer. Scuba diver. Canadian fiction reader. Mother of two.

Related topics Future consumer index Consumer products and retail Sustainability Customer Digital
Upvote