On average, consumers are spending 15% of their time differently than before the pandemic. Over 95% of consumers say their purchasing has changed in some way over the past 3 years. Due to inflation and behavioral factors, consumers are rotating over $1 trillion of spend across categories creating seismic shifts for certain products and services. Further, consumers’ values have changed in terms of how they see themselves and others. Finally, they envision continued, meaningful ‘disruption’ over the next three years. The combined effect appears significant and resilient and will have a meaningful impact on how consumers seek to engage with companies in the future.
BOSTON, Nov. 29, 2022 /PRNewswire/ — The past three years have had a profound impact on consumers, both personally and professionally. Unprecedented disruption caused by the global pandemic, economic volatility, war, and supply chain interruptions has changed the consumer mindset, more than we see on the surface. While life has returned to ‘normal’ on many levels, Creo Advisors’ (www.creoadvisorsllc.com) proprietary consumer research suggests more fundamental changes in our values, how we spend our time and where we spend our money.
Successful companies have navigated this unprecedented period by being agile and making tactical changes to navigate the rapidly evolving period over the past three years. At the same time broader changes, along with less strategic planning has been underway during this period. Future success will likely require a balance between navigating declining consumption for many products & services in a challenging financial environment, with an intermediate opportunity to align with consumers though a reimagined value proposition for 2023-2025.
Key takeaways from our research include:
Disruption and Broader Consumer Change
- People anticipate disruption is part of ‘normal’ life. While they expect slightly less disruption over the next 3 years, vs. the last 3 (rated 53 vs. 64, respectively, on a scale of 1 to 100), people still anticipate meaningful disruption. People seem to be growing more accustomed to unanticipated shocks and surprises in an era that may become known as “The Great Disruption.”
- We are spending our time differently. While the level of change differs significantly by person, on average, we are spending 15% of our most precious resource differently now than in 2019 and this is projected to continue through 2025.
- We’ve become more ‘self-centric’. Over 54% of consumers are self-reporting they are thinking of themselves more than others over the past 3 years. Simultaneously, they believe more than 75% of others are thinking of themselves first more over the past 3 years.
- Our values have evolved. Over 90% of those surveyed expressed a change in values, with values generally becoming more important. Honesty and trustworthiness were the values that elevated the most in importance, followed by kindness and self-reliance. Selflessness and humility appear to be less important.
Looking Ahead to 2023
- Shift in spending: Consumers highlight meaningful changes in spending for housing, food, and other non-discretionary items. These changes equate to shifts of more than $1 trillion of spend across all categories.
- The service gap: Consumers have higher expectations for service in 2023. Companies will struggle to meet these higher expectations in a tight labor market and through newly desired customer experiences.
- Evolving segmentation: Behavioral, spend, time allocation and value changes exist across different customer segments. Not all segments have the same view for the year. Interest rates will play a substantial role and affect spending.
- Broader outlook: Consumers are somewhat more optimistic about their financial situation 12 months from now and have a modestly ‘comfortable’ outlook by year end.
Last minute thoughts on Holiday 2022
- Frugal spending. Inflation concerns loom large, and many indicated they are planning to tighten their spending. 60% of shoppers surveyed anticipate reducing their budget this holiday.
- Consumers are shopping later than last year. Less than 40% of consumers plan to be 50% done with their Holiday shopping by December 1st.
- Finish strong. Near-term, these factors will require retailers to be agile with last minute changes to marketing, promotions, and labor to maximize Holiday 2022.
Succeeding in a Disruptive Environment
With consumers feeling less financially stable, plus more anxious and cautious going into 2023, we believe companies need to take a fresh look at their value proposition and how they are positioned to best serve consumers. Additionally, they need to act now to make the appropriate investments to capitalize on market share opportunities in the latter half of 2023. “There will be greater separation between successful and unsuccessful companies. This will be based on a compelling value proposition, true organizational alignment and team speed, agility & execution,” notes Rich Vitaro, Managing Partner, and Founder of Creo Advisors. Is your value proposition ‘future-proofed’ and your company aligned to delight tomorrow’s consumer today?
About Creo Advisors
Creo Advisors is a boutique consulting firm of tenured experts who create near-term and sustainable positive outcomes for clients. We partner with ambitious Management teams, Private Equity Firms, and Boards seeking to achieve superior financial performance. Our role is to help clients move from “insights to results” on key levers to deliver peak performance. Creo Advisors provides Strategy, Growth, Supply Chain, and Human Capital services to companies across multiple industries. Please visit our website at www.creoadvisorsllc.com and follow us on LinkedIn.
For more information, please contact us at: [email protected]
SOURCE Creo Advisiors LLC
