Herbert Yum, Euromonitor APAC spokesperson & Research Manager
Where Consumers Place Value
The evolution of technology, inflation, climate change, global conflicts and the economic landscape are just a few factors that have slowly but surely led to shifts in what consumers now value and place importance on in today's post-pandemic world.
Among the trends revealed in Euromonitor International's 2024 Global Consumer Trends report, price hikes from inflation and recent technological innovations over the past year have been identified as having the most significant impact on the grocery and fast-moving consumer goods (FMCG) sector. This underscores the need for companies to better understand consumers' evolving values, how this affects their behaviour, and redefines their shopping motivations and needs.
Ask AI – Leveraging generative AI
Generative artificial intelligence (AI) has taken the world by storm, giving rise to an ecosystem reset. New tools are evolving into co-creators for consumers, and this, in turn, influences consumers' decisions, reshaping their expectations of brand engagement.
Within the first two months of ChatGPT's launch, the platform amassed 100 million users, becoming one of the fastest-growing consumer applications in history. Such platforms have already become increasingly integrated into consumers' daily lives, and this technology is expected to become even more deeply woven into the daily lives of consumers.
According to Euromonitor's 2024 Global Consumer Trends report, 72 percent of consumers used technology to improve their daily lives in 2023, and 42 percent would be comfortable with voice assistants providing personalised product information and suggested products. As such, there is a clear need and opportunity for businesses to utilise generative AI to enhance personalisation and improve the overall customer experience. Fifty-three percent of professionals said their company plans to invest in generative AI over the next five years.
Several grocery and FMCG industry players have already begun to leverage such technologies. For instance, French retailer Carrefour has integrated OpenAI technologies to launch its new online shopping assistant, Hopla. On the application, shoppers can use natural-language AI to help them with their daily shopping by asking for help choosing products for their basket based on their budget and food constraints or even asking for menu ideas.
Additionally, drink company Coca-Cola created its Y3000 Zero Sugar drink edition with the help of AI. The limited-edition beverage pulled inspiration from human and machine intelligence to develop a unique flavour profile that depicts a utopian future.
As such, brands must identify opportunities to leverage opportunities to integrate generative AI into their businesses, adopt the relevant tools to automate and enhance the customer experience, and further look into data from generative AI for new product development opportunities, moving into 2024 and beyond.
Value Hackers – The search for Dupe and deals
In 2023, price hikes left consumers struggling to cover their expenses, with nearly 3 in 4 or 74 percent of consumers expressing concern about the rising cost of everyday items. As people were forced to make sharp cutbacks and trade down to cheaper options, they became budgeters to keep up with the cost of living. In the past 12 months, data reveals that 53 percent of consumers cooked at home more instead of eating out, 33 percent switched to buying private label products, and 28 percent bought products in smaller quantities.
Euromonitor International has identified this trend as 'Value-Hacking', where consumers hunt for the best deals, extending beyond price tags. Value Hackers find clever ways to maximise their budgets without sacrificing quality. These consumers actively look for cheaper alternatives or knockoffs, pay with credit cards or rewards points, and participate in free activities to make the most of their income. Given these consumer motivations, businesses will have to step up incentives and innovate around affordability to cater to cost-conscious needs moving forward.
Adopting cost-effective and added-value solutions will help businesses meet these consumer needs. For example, affordable options outside traditional markdowns, such as bundle-and-save deals, will allow shoppers to purchase multiple products at a discount. Additionally, subscribe-and-save plans take a similar approach to automatic replenishment. Private label lines can also deliver comparable quality at a lower rate, while referral or early-bird rates also entice shoppers whilst putting cash back in their pockets. Such strategies are highly applicable to the FMCG and grocery industry, given the nature of products in the industry being continuously in high demand and sold quickly in high volumes.
While pricing is a key component towards leveraging this trend, other factors, such as loyalty programs, come into play. Loyalty programs allow consumers to earn points towards future purchases, effectively ensuring customer retention. Therefore, finding extra perks that matter to consumers is important. Overall, knowing how to strike a balance between cost and quality while communicating the value proposition is what will help brands attract Value Hackers.
Consumer preferences are evolving and closely linked to multiple factors. For the FMCG sector, this is especially the case when it comes to technological innovations and cost of living issues. With several successful cases of adopting ChatGPT in businesses among FMCG companies, more organisations are expected to adopt AI in their businesses. Consumers crave private label products with advanced quality more than ever and aggressively look for new lifestyle 'hacks' to save their budget in the ongoing cost of living crisis. In all, companies need to be aware of these changes in consumer sentiment while staying true to their brand's core values, Alison Angus, Head of Innovation at Euromonitor International, shared.
See more insights from the 2024 Buyer's Guide below:
