NEW YORK — The pandemic may be mitigated thanks to public health measures like vaccines, inflation may be on the wane and supply chain woes may be easing somewhat. But 2023 is nevertheless set to be defined by uncertainty, according to Michelle Evans, Euromonitor International global lead of retail and digital consumer insights.
The firm released a report on the top 10 global consumer trends, a few of which will especially impact retail, Evans said, speaking at the National Retail Federation’s major industry conference last week.
“The number one was the evolving economic landscape,” she said. “A close second was the ever-evolving, shifting consumer priorities. I do think those two as well as technological advances are probably the most dynamic drivers in place today when we think about consumer trends.”
Artificial intelligence has already emerged as a major theme of the year, but retailers should be wary of downplaying the importance of humans, according to Evans.
“This is all about finding that balance between human versus bot,” she said. “Machines obviously offer more convenience and speed. But really we shouldn't underestimate the power of that emotional connection with a brand. So certainly it comes down to authenticity. I think this is a key word that we see across a lot of these trends.”
Furthermore, while younger consumers may seem wedded to their devices, they are increasingly more selective about when, how often and how they use them, Evans said.
“Where could you automate and where should you automate? Those are two different questions you have to answer,” she said.
In fact, after years of getting disrupted by technology, retailers face disruption from morphing generational attitudes, according to Evans. Environmental and social issues are important motivators for an increasing number of consumers, especially younger cohorts, which retailers and brands can’t ignore, according to Evans.
“You have to take a stand, but also believe in it,” she said. “Because if you don't come across as authentic, it doesn't matter if you took that stand or not.”
There are also several forces that are leading consumers to hit the brakes on acquiring discretionary goods. While Euromonitor analysts don’t expect a global recession this year, the cost of living continues to sap purchasing power. Last year, three quarters said they won’t increase their overall expenditures, per Euromonitor’s report.
But many consumers are also simply in a different mindset around consumption, after seeing that lower energy use and other cutbacks during the height of the pandemic had a sustainability upside, Evans said.
“We are moving towards a more cautious and conscious consumer,” she said. “Clearly the economic reality is making consumers more cautious. And as a byproduct of that they're also becoming more conscious.”
Still, the year will also be defined by consumers’ interest in joyful pursuits after dealing with restrictions imposed on them by the pandemic and macroeconomic forces, she also said. The fashion and beauty industries are poised to be direct beneficiaries, as are food and beverage, hospitality and travel, and other service players, she said.
“There's ... basically the ‘Yolo’ trend —‘You only live once,’” she said. “We've been cooped up for so long, one crisis after another, and now you're telling me the economy's in the tank? You know what, I'm gonna still take that trip. So certainly consumers are maybe throwing some caution to the wind and getting out there. And that's where experiential retail and food service stand to benefit.”