ITV

Tag: Capgemini Research Institute

  • Retail continues to undergo incredible shifts driven by changing consumer behaviour – Report

    Retail continues to undergo incredible shifts driven by changing consumer behaviour – Report

    Mumbai: Capgemini Research Institute published a report on 2023 consumer behaviour for products in retail industries. It is a navigating experience for consumers at large here are a few highlighted observations. Consumer behaviour is paramount for identifying market trends and analysis for future market anticipations.

    Importantly, this research report is based on five basic themes of purchasing patterns, cost of living, raising concern over essential products, fulfilment beyond in-store experiences, and rise of social media influencers.

    According to report observations and key findings, the majority (61 per cent) of consumers globally are extremely concerned about their personal finance situations. For Millennial (66 per cent), Bommer (55 per cent, and Gen Z (60 per cent) consumers as a whole. Consumers are worried about the increasing cost of living. 73 per cent of consumers are making fewer impulse purchases. 69 per cent of consumers are cutting costs on non-essential items such as electronics, plants, toys, and other non-essential products. More particularly cost-cutting measures or delaying the purchase of luxury items with convenience.

    Interestingly, the new trendsetter part of the report highlighted more than half of consumers (65 per cent) of consumers said that they are buying products preferring cheaper private label products over branded products. 64 per cent of consumers prefer to buy products from hypermarkets, and discount stores. Over 75 per cent of consumers are spending more time and energy to fund deals and discounts from physical stores. Consumers are navigating different ways to adopt affordability. The cost of living crisis forces consumers to lead to more sophisticated purchasing patterns or behaviours.

    Commenting on report findings, Unilever CFO Graeme Pitkethly said, ‘ We are starting to see consumers down trading and looking for greater value. Sales volume are beginning to fall as some shoppers switch from branded goods to own-label products in a bid to make ends meet. In another observation, 44 per cent of consumers said that they are reducing overall spending this year as compared to 33 per cent in November 2020.’

    A paradigm shift in consumer patterns after Covid 19, consumers started spending less since the pandemic period. The majority of consumers globally expect companies to help them through this difficult time.

    Also while navigating the best options for in-store and online sales for discounts and deals, still consumers’ preference for in-store shopping is declining amid the cost of living crisis. The slight decline from 67 per cent to 58 per cent in 2023 is an indicator of declining purchasing behaviour for in-store experiences. According to a survey in Capgemini Research in November 2021 survey, 38 per cent of consumers said they have significant interactions with retailers’ online channels. Consumer interactions with online retailer’s channels came down to 33 per cent in November 2022. But the long-term outlook increased to 38 per cent suggesting stabilisation and growth more from pre-pandemic times.

    According to last year’s survey, consumers are spending their purchases across physical and online channels. As per the latest data, 40 per cent of consumers spend less on groceries across all channels. As per report identification, consumers can shift to physical channels in case of non-available basic necessity products. Around 40 per cent of consumers are more likely to switch stores or online stores as per contingencies.

    According to the report section on sustainability and affordability parameters, more than half 54 per cent of consumers globally, they are preferring affordability over sustainability when making purchasing decisions. Rural consumers are buying less and recurring purchases of brand products as compared to urban consumers.

    According to reports, social e-commerce generated 724 billion dollars in revenue in 2022. Social commercial revenue is expected to realise a CAGR (Compound Annual Growth Rate) of 30.8 per cent.

    It is clear from the data Gen Z is considerably influenced by social influencers at large. 34 per cent of all global consumers learned about brands over social media while 22 per cent found new brands through TV ads.

    According to research consumer behaviour is concerned with financial decisions, price consciousness, and changing adaptability.

    Retail continues to paradigm shift in recent years which is driven by changing dynamics of consumer behaviour and expectations. Brands have to respond to ever-changing patterns of customer demand, shifting geographical situations, and global supply chain pressures. Inflation globally forces consumers to increase concern over affordability.

  • Majority of millennials, Gen Zs prefer buying products directly from brands: Report

    Majority of millennials, Gen Zs prefer buying products directly from brands: Report

    Mumbai: More than two-thirds (68 per cent) of Gen Zs and over half (58 per cent) of millennials have ordered products directly from brands in the past six months, compared to 41 per cent on average across all age groups. The findings were published by Capgemini Research Institute in its latest report.

    The report titled ‘What Matters to Today’s Consumer’ explores the impact that the pandemic has had on consumer behaviour and buying trends. According to it, consumers have reported a better buying experience, and access to brand loyalty programmes, as a major factor compelling them to bypass traditional retail channels.

    Interestingly, the report also found that almost half (45 per cent) of all shoppers they interviewed said they are willing to share data on how they consume or use products and more than a third (39 per cent) say they are willing to share personal data such as demographic information or product preferences. However, 54 per cent of all shoppers say that offers, deals, and/or discounts would make it more likely for them to share their data directly with brands.

    “Younger consumers’ willingness to go straight to brands when purchasing goods presents a real opportunity for consumer product companies. This enables them to collect consumer data and helps create a more mature direct-to-consumer channel,” said Capgemini head of consumer goods and retail Tim Bridges. “Being data-powered enables the consumer product and retail organisations to translate supply and demand trends into intelligent decisions on where best to stock their products, customise products and services, and enhance customer experience.”

    Online not likely to replace in-store shopping entirely

    Contrary to popular notions, the report also found that the majority of consumers (72 per cent) expect to have significant interactions with physical stores after the pandemic subsides. In fact it indicates that the surge in e-commerce over the last two years due to safety concerns and the desire to avoid physical stores has now plateaued, and more consumers anticipate a return to in-store shopping experiences.

    At least 72 per cent of all shoppers expect to have significant interactions with physical stores once the pandemic subsides – up from 60 per cent pre-Covid levels. Globally, all age groups expect their level of in-store interactions post-pandemic to be higher than their online interactions.

    Delivery and fulfillment services gain importance in certain segments

    With convenience remaining a key priority for consumers, delivery and fulfillment are increasingly being transformed from a cost center to a growth driver for many organisations. In the health and beauty and grocery segments, shoppers place greater importance on delivery and fulfillment than in-store experiences. This is especially true for groceries shoppers across all age groups, where 42 per cent of shoppers say that delivery and fulfilment are the most important service attributes.

    To add to it, convenience of delivery is a major factor that can push shoppers to try new and emerging models of shopping. Slightly less than half of consumers (47 per cent) who have purchased products via subscription services do so for the convenience of home delivery.  However, shoppers are less willing to pay a premium for fast delivery. Across all shoppers, 3.3 per cent of the total cost is the average they would be willing to pay for two-hour delivery, down from 4.6 per cent in 2019. While younger shoppers with children remain the most willing to pay a premium, consumers increasingly expect fast delivery as a standard part of the customer experience.

    Health and sustainability are top of mind for consumers

    Health and sustainability look set to continue influencing consumer decisions going forward, and organizations should consider investment in empowering customers to make informed choices around these, cites the report. At least, 44 per cent of consumers are willing to pay a premium for grocery products that have sustainable packaging. This is more pronounced amongst Gen Z (64 per cent) and Millennials (54 per cent) than older generations like Boomers (30 per cent).

    As many as 10,000 consumers over the age of 18 years were surveyed by  Capgemini Research Institute in 10 countries around the world, including Australia, Canada, France, Germany, Italy, Netherlands, Spain, Sweden, the United Kingdom, and the United States. Consumers were qualified as “shoppers,” meaning they must have made a purchase of groceries, household and toiletries products, and/or health and beauty products at least once in the past six months.