2014, a year of major contradictions in consumer behavior
According to Euromonitor’s latest Top 10 Global Consumer Trends, 2014 will be a year of contradictions in terms of consumer preferences and behavior. They show a desire to indulge in luxury and instant gratification, expressed by the need for an even smarter
smartphone, a passion for apps, a faster route to purchase and a craving for the visual.
However, in parallel are struggles for better work/life balance, the concerns of eco-worriers, an appreciation of frugality and imperfection and a longing for the authenticity of home and community. Other dominant consumer trends include the importance of eating right, the “people’s choice” ruling the online world and a set of adaptive post-recession consumer coping strategies that have become the new normal for many.
In 2014, consumers are buying faster as the gap between first being interested in a product or service and actually buying it contracts. Brands, of course, are keen to encourage this quest for instant gratification, with a host of enticing Pinterest-style visuals and tools to make self-treating more tempting, and faster payment options to prevent caution getting in the way of impulse buying. Brand initiatives aim to take consumer convenience and impulsiveness to new heights, allowing consumers to buy what they covet on the spot.
Brands are trying to connect with consumers on social networks, hoping to turn followers into buyers. Research shows that consumer engagement with brands via social networking positively impacts their attitudes and buying behaviour. Brands are eager to reach consumers in a space where friendship and commerce are easily combined.
Appealing to ideals that consumers cherish help sell products faster. The idea of plying freedom through consumption, for instance, isn’t new. The promotion of domestic white goods in the 1950s and more recent Nike ads have been high profile examples, but this notion is spreading to encourage emerging market consumers to buy more. In China, a growing number of brands are using this
message. For example, local smartphone maker Oppo recently told consumers to “Enjoy freedom” by buying its new handset.
An unfulfilled work/life balance will be a widespread source of consumer stress in 2014. The jury is out on whether being “always on” due to mobile connectivity is collapsing the work/leisure divide or if technology is a godsend in relieving the pressure on working consumers. The ad for the Samsung Galaxy S4 promises to “Make your life richer, simpler and more fun.”
More emerging consumers continue to aspire to luxury consumption. A survey conducted by Japanese advertising agency Hakuhodo during August 2013 found that over 50% of young 18-34-year-old female respondents in Ho Chi Minh City Vietnam expressed a preference for luxury brands. In summer 2013, “Tiny Times,” a hit film about the hedonism of China’s urban youth, resonated with the
“me” generation aspiring to the lives of its female protagonists tottering around in expensive stilettos and buying each other designer gifts. While the film was criticised for its moral bankruptcy, microbloggers defended their dreams.
The pursuit of luxury can be a burden. According to a survey conducted in May 2013 by the Korean Chamber of Commerce among those aged over 20 years who had recently purchased luxury goods, almost 30% of respondents were experiencing difficulties paying off their credit card debt with around 25% having considered buying counterfeit goods or second-hand luxury goods to save money.
In 2014, consumers still express their identity and personality through consumption and signal betterment through luxury purchases. However, in line with a trend for less conspicuous consumption, luxury consumption is becoming more nuanced. While the Chinese are known to have a strong appetite for luxury goods, some status-conscious consumers have begun to favour subtlety.
Consumer interest in the local aspect of luxury will become more discernible in 2014. The Ritz Carlton hotels have, according to company president Herve Humler, been reflecting the customer interest in a more authentic, local experience. In doing so, the group is following a popular trend in high-end hotel design; rethinking its approach to ensure that interiors reflect hotel locations and local heritage. This caters to the consumer preference for “local luxe” rather than a bland homogenous luxury style.
More consumers want to get their hands on luxury for less. Japanese consumers are opting for “affordable luxury” in greater numbers, with popular purchases including cashmere sweaters at fast-fashion retailer Uniqlo, and gourmet coffee and ice cream at 7-Eleven convenience stores.
On the limits and powers of blogosphere, Geoffroy de la Bourdonnaye, chief executive of Chloé, says that the idea of an outfit or a brand being “in” or “out” according to the whims of bloggers is hard to swallow for fashion companies. “You know instantly if something is a hit or a flop…the online response is very quick,” he explains. Brands crowdsourcing their designs are one approach to the power of the people’s vote.
In the post-recessionary climate, the convergence of consumer trends and behaviour in developing and developed markets is apparent. The phenomenon of consumers spending via credit cardand getting into debt to keep up with lifestyle “needs” is a rising trend in countries like the UAE, Thailand, Malaysia, South Africa and Brazil where this habit was less widespread until recently. Euromonitor data showed that in Latin America, consumer credit for non-mortgage loans jumped by 61.3% between 2008 and 2013. Across the Asia Pacific region, growth was 52.8% over the same period.
As smartphones are bought by more consumers globally, we can expect even more apps designed to cater to the tastes of emerging market consumers welcoming online access via basic smartphones. Apps are becoming ever more niche. Newer dating apps like Weesh seek to meet the “date night” needs of established couples. In tune with a growing consumer interest in privacy and the search for more meaningful communications, a new app called Twine claims to be the modern alternative to a blind date. Twine matches people based on common interests rather than looks by initially blurring profile photos.
Faced with headlines like “70% of Pinterest Users Are There For Shopping Inspiration,” brands are keen to ride the visual wave. More brands, for instance, are turning to social media in place of events to launch products, an approach that has been called “social unveiling.” “CrowdSend” is a new social network that tries to identify objects on online images. Users are encouraged to tag photos with any information they have about the products depicted and gain rewards for correctly recognising items on the photos. “With more than 1,500 images hitting Facebook every second alone. The time for images is now,” explains its website.
adapted from Euromonitor International 2014