How global consumers are responding to the rising cost of living

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We haven’t just been dealing with a global pandemic in 2022. Economic uncertainty has come to the forefront as consumers across the globe grapple with the effects of rapid inflation.

As consumer behaviours continue to change, it’s critical for businesses to keep in touch with their target audience in real time. That’s why we field our Global Consumer Barometer, which provides a regular glimpse of global consumers to help guide smarter business decisions.

Now in its 19th wave, the most recent Barometer features topics including consumer confidence, the rising cost of living, supply chain challenges, brand values, and more. Below, we take a look at the findings of the study, which was fielded in March 2022.

The importance of brand values in today’s environment

Global consumers are purchasing with care and expecting more from brands than they have in the past. They look to engage with brands that support them and share their values – and act on them, too.

• Eight in ten believe that brands should be accountable to consumers

• 64% go out of their way to engage with brands that align with their values

• Three in four globally agree that it is important to them that they invest time and care into the decisions they make as a consumer

• 67% would stop using a brand because of its negative environmental and social activities

These data show that, to stay relevant and competitive in today’s market, brands must be proactive about positioning and marketing themselves accordingly.

Supply chain issues are changing how and where buyers shop

Today’s businesses are faced with limited resources and materials, staffing shortages, price increases, and other challenges that make all kinds of goods and services hard to come by. In turn, when products are in stock, they are more expensive for consumers to purchase.

More than half of global consumers (52%) report being extremely or somewhat frustrated with products being unavailable – and this frustration is felt most in grocery retailers and supermarkets. What are the other ways in which supply chain issues are impacting global consumers?

• Four in ten had difficulty buying pantry/dry products based on availability in the past three months

• 35% had difficulty buying fruit and vegetables, and 31% fresh meat and fish

• Three in four expect product unavailability issues to last up to six months

• Almost half of global consumers expect to spend more on groceries over the next few months

The volatile supply chain and unreliable product availability are making buyers rethink how and where they do their shopping. Sixty percent of global consumers say they’re willing to switch to in-store shopping because of products or brands being temporarily unavailable online, and six in ten consumers who experience online availability issues would switch to in-store shopping. This presents an opportunity to both physical and virtual storefronts – as long as they are able to keep supplies in stock.

Cost of living increases are causing consumer concerns

Financial concerns have persisted into the spring of 2022, with 37% of global consumers reporting that they’re very concerned about their personal financial security in light of the current economic circumstances. More than four in ten consumers say they have less money now than they did before the pandemic, and one in five report that they are still worried about their employment.

Additionally, cost-of-living increases are affecting the prices of everyday goods and services. Sixty-three percent of global consumers have experienced price increases in stores, while 42% have experienced this when shopping online. Utility bills are another area in which consumers are feeling the pain, as 42% say they expect to spend more in that area this year.

With prices rising across the board, it’s important that brands keep product offerings as affordable and accessible to their target audience as possible. Re-evaluating price structures and product offerings can help businesses ensure they will fit into more stringent budgets and cater consumer concerns.

Competing brands could be well positioned for growth

In discouraging news for well-established brands, brand loyalty is at a new low. Price increases are forcing consumers to forego their favourite stores and brands in favour of more affordable options. This presents a significant opportunity for competing brands that are looking to increase market share.

With buyers highly motivated to put value first, here’s what businesses can expect over the next three months:

• 48% will increase their purchasing of cheaper alternatives to their usual choices

• 34% will visit more stores in search of value, with 31% seeking out cheaper supermarkets

• 32% will decrease their purchasing of premium brand products to save money

Brand loyalty is being sacrificed in favour of cost efficiency in today’s market, which is a trend that looks set to continue. This may inspire bigger or premium brands to offer more affordable options to stay competitive, while emerging brands may consider innovative ways to increase visibility and capture new customers.

Consumer confidence remains on the rise

Despite the persistent economic concerns, there’s a light at the end of the tunnel in terms of consumer confidence. Overall, consumer life satisfaction is up 10 points compared to March of 2021, and 41% of global consumers report feeling very optimistic about the future.

As brands navigate the present and the economic landscape continues to evolve, it’s important to stay on top of changing consumer behaviour and sentiment.

By Toluna

This article was first published in the Q2 2022 edition of Asia Research Media

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