The state of global consumers in 2024 can be described as unsettled. We’ve grown accustomed to terms like “unprecedented” as we navigate various challenges, including health crises, inflation, fluctuating interest rates, stagnant wage growth, extreme weather events, and geopolitical tensions. Amidst this uncertainty, defining a “new normal” has become increasingly difficult for consumers.
With further disruptions looming, consumers are understandably cautious about their spending habits. The year ahead will likely be characterized by a focus on safeguarding finances, devising action plans, and strategizing to overcome socioeconomic obstacles.
However, consumer priorities extend beyond mere financial solvency. There’s a growing emphasis on holistic well-being, encompassing financial, physical, and mental health. For many consumers, financial health and job security rank equally with mental and physical wellness. It’s crucial to recognize that financial stability often underpins our ability to nurture our well-being.
In the current socioeconomic climate, extreme events have skewed our perception of normalcy. Many consumers are uncertain about health, safety, or financial security concerns. NIQ’s Economic Divide research categorizes consumers into distinct groups based on their financial resilience in response to recent pressures.
Despite varying financial situations, rising prices have impacted everyone to some extent. Average global prices across consumer packaged goods (CPG) have surged by 13 per cent in the past year alone. As financial disparities widen, understanding the needs of both “Strugglers” and “Thrivers” becomes increasingly crucial for brands.
Many consumers perceive themselves as in a worse financial position this year, with increased living costs cited as a primary reason for their struggles. This erosion of financial stability could shift consumer behaviour, particularly among the “Cautious” segment.
Recessionary concerns loom large in the minds of consumers worldwide. A substantial majority (62%) already feel like they’re living in a recession, with many expecting this economic downturn to persist for at least a year. These sentiments influence spending habits, with cautiousness prevailing across various regions.
NIQ’s 2024 Global Consumer Outlook survey identifies hotspots where recessionary sentiment is particularly strong. For example, in Turkey and South Korea, 89 per cent of consumers perceive their countries to be in a recession. Brands must adapt strategies to align with local consumer sentiments and spending behaviours.
Despite financial pressures, consumers remain resilient. They are committed to maintaining or increasing spending on categories essential for long-term health and prosperity. While discretionary spending is expected to decrease, investment in financial services, debt repayment, groceries, household items, and education is set to rise.
Although consumers face mounting expenses, they prioritize categories offering potential stability and growth. The prevailing sentiment for survival underscores a cautious approach to finances. As we delve deeper into the 2024 Global Consumer Outlook findings, it becomes clear that adaptability and resilience are key to navigating disruptive times.
Mike Ljubicic is managing director for Canada, NIQ
