Here are the top 5 global consumer trends expected to gain traction in the year ahead as identified by Euromonitor.
- Budgeteers: Rising inflation see change in consumer behaviour
Budgeteers have emerged as inflation and economic uncertainty force consumers to rethink how they spend and save.
Across the region prices skyrocketed due to the Russia-Ukraine war, climate change disrupting crop yields and supply chain constraints lingering following the pandemic.
Changes in shopping behaviour are evident as consumer adapt to rising prices. Informal markets appeal to consumers looking for small quantities with a lower out of pocket expense.
Bulk buying offer better value for money while smaller pack sizes allow consumers to indulge in more expensive products. Multipurpose products attract budget-conscious consumers while affordable substitutions replace products deemed unaffordable by consumers.
While changes are seen in consumer behaviour, retailers are driving the change by offering personalised discounts with loyalty programs and increasing affordable private label offerings.
In South Africa food and drink saw an average increase of 30% in private label share growth since 2020 as consumers look for more affordable options.
- Eco-Economic: Cost effective solutions are more environmentally friendly by proxy
Eco-Economic describes consumer behaviour where the most cost-effective option is also more environmentally friendly by proxy.
More than 20% of the population live below the international poverty line of less than USD3.10 per day.
Navigating poverty by making sustainable choices has become a norm rather than a trend in SSA.
During times of hardship consumers gravitate towards familiarity which traditional dishes offer and given that they are mostly plant based it is more affordable and sustainable.
The cost of living along with lower modern retail penetration continue to boost well-established second-hand clothing markets across the region.
According to Euromonitor’s Voice of the Consumer: Lifestyles Survey 2022, Nigerians buy and sell used items more frequently, with 10% doing so at least once a week.
- Here and Now: Consumers allow themselves to live despite constrained budgets
Consumers are giving themselves permission to live a little. They are not abandoning financial responsibility, but they are taking a short-term buying approach with discretionary items.
Consumers are allowing themselves indulgence at an affordable price.
Home consumption of alcoholic drinks are on the rise as consumers treat themselves by removing the on-trade markup.
Smaller pack sizes of more premium brands make products more accessible, for example Hennessey, a premium spirit which is available in a 50ml bottle.
Anticipated recovery in the African tourism industry in 2023 is expected to be supported by the “Here and Now “ trend, across developed markets.
In response to the trend, governments across east Africa formed a partnership to offer a single visa to tourist travelling to Kenya, Rwanda, Uganda and Tanzania.
- Young and disruptive: Gen Z consumers drive change in beauty and apparel industry
As a social media-native and smartphone-driven generation, Gen Z tends to embrace individualistic expression, whilst at the same time being influenced by external opinions and outside pressures.
The colour cosmetics routines of Gen Z highlight, how values surrounding personal expression and individualism are impacting product usage, with a dichotomy emerging between expressive make-up and natural aesthetics.
Euromonitor’s Voice of the Consumer Beauty survey, fielded June to July 2022, found that 37% of Gen Z daily make-up is “natural or barely there” in style.
- Authentic automation: SSA poised for growth of automation thanks to greater smartphone connectivity
While still in its infancy SSA is seeing a surge of automation innovation across multiple industries which improve efficiency and increase convenience for consumers.
In the beauty industry augmented reality is used in selecting make up while machine learning algorithms are used to advise clothing size.
Recently in South Africa, Woolworths launched a virtual try on lipstick experience while Superbalist added a feature using Fit Finder to help customers select the right size.
In the tourism industry, automation is used in the form of robot concierge with Hotel Sky in South Africa pioneering this technology.
Automation is also spreading fast in the banking sector, where more operators are adopting AI empowered chatbot.
For instance, Zenith Bank introduced Ziva (Zenith Intelligent Virtual Assistant) in Nigeria, which helps customers to open bank accounts, check account balances or buy data and airtime via WhatsApp.
Understanding the regional landscape will allow businesses to harness the potential available in SSA.
The population in SSA is young with increased spending power from female consumers. Urban consumers are tech savvy and digitization is commonplace.
Local heritage remains important to consumers and will see ‘traditional’ and modern products competing for share of wallet with Optimizing logistics and last mile delivery are key to unlock opportunities.
