Consumer values have changed permanently during the pandemic, driving a desire for a more responsible form of consumption, according to the latest EY Future Consumer Index.
The survey of more than 1000 UK consumers, which has been tracking consumer behaviour since April 2020, found the pandemic has prompted consumers to realise they can live with less and consume ‘better’ with almost half of respondents saying they will buy fewer physical items because they don’t need them (49%) and a similar share saying they are more likely to repair things instead of replacing them (45%).
The EY research also found that 67% of respondents said new behaviours adopted over the pandemic have become embedded within mindsets and now feel ‘normal’.
Ongoing uncertainty caused by the pandemic, combined with accelerating inflation and increased price sensitivity, has also led to a focus on affordability with 56% seeking more value for money. And, while essentials will be judged on price, successful brands will need to bring additional value to the consumer.
Silvia Rindone, EY UK&I Retail Lead, comments: “It has become clear that consumer values have changed permanently during the pandemic, driving a desire for a more responsible form of consumption. There is a growing trend that consumer spending is no longer driven just by affordability but increasingly by factors such as sustainability, social impact and actual need. Consumers have had the time and inclination to stop and reconsider what, and how, they buy and are moving towards mindful consumption. Retailers and brands must now ensure they are ready to react and deliver on changing expectations.”
The survey also revealed that UK consumers are expecting to buy better longer-term. Forty-six per cent said that high quality was the purchase criterion they are most willing to pay a premium for in the future.
Consumers are also increasingly prioritising sustainability and fulfilling experiences for their purchase decisions, indicated by the growth of ‘planet first’ and ‘experience first’ segments. The ‘planet first’ consumer segment of those surveyed, which is concerned about sustainability issues such as climate change, increased from 18% to 26% between May to October 2021, potentially accelerated by the recent COP26.
However, while sustainability is becoming more prominent, there remains a gap between consumer intentions and actions. Over half of consumers said they will pay more attention to the environmental impact of their consumption (51%), but 75% said they would not pay a premium for more sustainable goods and services.
There is also evidence of an income inequality: higher income consumers are more likely to prioritise sustainability and climate change in their purchasing decisions, while lower-income households are understandably more focused on finances and are consistently adopting an affordability-first mindset.
Customer experience remains key
The rapid growth of e-commerce, accelerated by the pandemic, has also continued: 45% of respondents said they were visiting stores less frequently and 72% plan to make purchases during the next big shopping events with a mix of online and in-store purchases. The majority of consumers surveyed (55%) would also share some level of personal data for a completely customised online experience.
Silvia Rindone adds: “Retailers need to ensure they analyse the data generated from this Christmas trading period as it is likely to be the most accurate snapshot yet of how consumer behaviour has changed. This will allow them to evolve their business model to take advantage of new opportunities. Our research has shown that the post-pandemic consumer is looking to consume better rather than more, but that doesn’t mean they are not spending. There is greater demand for quality and a willingness to pay for it and savvy retailers will need to adapt to ensure they stay relevant.”