An uncertain economic and geopolitical climate paints a mixed picture for international retail. Rapid inflation and rising living costs have caused many people to cut back on spending and increase their focus on essential purchases. In 2023, consumers prioritized grocery shopping, discount stores, and more time at home, sacrificing spending on travel and luxury goods. Many of these trends will continue in 2024, although optimism varies across different regions.
"Consumers are more heterogeneous than ever. Global success demands fit-for-purpose strategies from retailers and brands."
These are just some of the findings from a recent global survey by Roland Berger and Potloc. Conducted in November 2023, the study contains detailed insights into consumer behavior trends in Brazil, China, Germany, the United Arab Emirates, United States, and United Kingdom.
Despite the widespread uncertainty, almost half of respondents feel at least somewhat optimistic about the current situation, especially those aged 18-24. This picture varies by region: participants from China, the US, and the UAE show the most optimism, while consumers in Germany and the UK have a somewhat gloomier view.
After cutting spending in numerous areas in 2023, consumers don’t expect to change drastically in 2024, although some alterations are likely. Interest in personal wellbeing and conscious consumption is set to rise further, with almost half of respondents expecting to buy healthier products more frequently. A similar number intend to travel more often for leisure in 2024. And support for local stores and businesses will increase, reflecting a growing focus on community, sustainability, and the local economy.
Consumers in China and the UAE are the most optimistic about their finances, with Brazilians the most pessimistic. Meanwhile, younger shoppers are the most likely to loosen their purse strings in 2024.
Digitalization is affecting consumer behavior more than ever. Social media dominates media consumption in every country surveyed, although traditional media such as broadcast TV and radio, books, and magazines still retain considerable popularity in Germany and the UK.
"Levels of media consumption don't always match their impact on purchasing decisions."
When it comes to media impact on purchasing decisions, TikTok now has the biggest influence, ahead of company websites and online video tutorials. Social media is particularly influential in the United States and China, although podcasts now hold the most sway for Chinese consumers. Germans favor company websites, which are also especially influential in the UAE and UK.
So what does this mean for brands and retailers in 2024? We have compiled six key insights to help market participants excel in 2024, ranging from consumer product priorities to ways of boosting the appeal of physical stores.
Adaptability and a tailored regional approach will be crucial for businesses to successfully navigate the rapidly changing retail landscape. Based on our findings, retailers and brands should first focus on enhancing their operating model and value proposition, with a strong emphasis on quality. Promotions and exclusive member benefits can attract more customers, with digital technologies vital to leveraging data for more personalized offerings across all platforms.
More details on the biggest trends, and their regional variations, can be found in the full third edition of our “Decoding Consumer Behavior” report. It also contains valuable insights on how your company can enhance its appeal amid an increasingly competitive, dynamic, and uncertain retail landscape.
Together with the research company Potloc, we conducted our global consumer behavior survey. Explore the full data set with multiple individual drill downs using Potloc´s interactive dashboard .
Register now to access the full study, that explores how retailers and brands can navigate economic uncertainty and varying consumer expectations in 2024. Furthermore, you get regular news and updates directly in your inbox.
