As the cost of living continues to rise globally, consumers have drastically adjusted their spending behavior, with the majority (53%) of global consumers “putting off” non-essential purchases.
According to the 2023 PwC Global Consumer Insights Pulse Survey, which involved 9,180 consumers in 25 countries, 15% of consumers have completely stopped buying non-essential goods.
Sectors such as luxury and high-end products, travel and fashion will be hit the hardest over the next six months by consumer spending cuts, with groceries expected to be least affected.
Specifically, consumers expect to reduce purchases in the next six months in all retail categories surveyed: the largest reduction in spending is expected for luxury / high-end or design products (53%), travel (43% ), online virtual businesses (42%) and the fashion sector such as clothing and footwear (41%). However, a desire for future spending persists, with 40% indicating they will look to make purchases for themselves or others, while 39% consider them to be of higher quality. The food sector (24%) is the one that has recorded the smallest expected reduction in spending.
Despite an expected reduction in spending and a challenging economic environment, consumers say they are still willing to pay more for sustainable products. Incredibly, over three-quarters (78%) are willing to pay more for a product that is made/sourced locally or made from recycled, sustainable or eco-friendly material (77%) or from a company known for its ethical practices (75 %).
A different survey conducted by BCG estimates that while less than 10% of consumers choose to buy sustainable products, the number increases approximately two to four times (20% to 43% of consumers) when sustainability is linked to other benefits such as health, safety and quality. The number still increases two to four times (up to about 80% of consumers) when sustainable products are comparable to more common products in terms of convenience, presence of origin information and costs.
Analyzing the key takings of a different study conducted on responses from 10,000 people in ten countries, aged between 16 and 40 (this group now accounts for 48% of global consumer spending and could reach 69% by 2040), we also found out that the level of commitment to the sustainability issue is higher among consumers belonging to the group of Millennials and Generation Z in emerging economies compared to those living in developed countries.
The share of environmentally conscious consumers, willing to accept possibly stricter regulations if necessary, to pay a higher price for sustainable products and to shift consumption towards more sustainable products is highest in Mexico, India and China. For young consumers in France, Germany and the United States, the opposite seems to be emerging.
The survey reveals a high level of anxiety among younger consumers in relation to sustainability: in all ten countries, 65%-90% of them say they are worried or very worried about the environment. But confidence in a more sustainable future is low: less than 30% believe that long-term goals to combat climate change will likely be achieved. Nonetheless, around 75% of environmentally conscious young consumers intend to live sustainably in the future, while 25% will try to convince family and friends to do the same.
Young consumers show a strong willingness to spend more on sustainable products and believe that it is necessary to ban and tax unsustainable products, as well as impose stricter governance and reporting requirements on companies. Skepticism about the data published by companies and their way of reporting on sustainability remains high.
According to the survey results, more than 40% of consumers consider the fashion industry unsustainable and, in net terms, an even greater share of respondents expect to reduce their consumption of fast fashion.
Source:
2023 PwC Global Consumer Insights Pulse Survey -Bcg.com -esg360.it -credit-suisse.com
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