Managing Director & Senior Partner
Five years after the onset of the global recession of 2008–2009, the sluggish pace of recovery and worries over employment and financial security continue to weigh heavily on consumer sentiment in developed economies. Consumers remain highly concerned about their jobs, personal finances, and economic future.
Yet amid the lingering angst expressed in The Boston Consulting Group’s 2013 Global Consumer Sentiment Survey, there are also encouraging signs. Consumerism has proved to be remarkably resilient. Yes, people from the U.S. to France to Japan said that they plan to forgo some luxuries, eat out less, and save more. But consumers in the world’s richer countries also said that they intend to upgrade their consumption in the product categories that they care about most. Consumers, especially those members of the Millennial generation who are 18 to 34 years old, continue to place a high importance on brands. And they do the same for consumerism: majorities of those surveyed said that buying makes them happy and that spending is good for the economy and society.
Our findings suggest that the fears of a few years ago—that prolonged economic crisis could permanently scar the consumer psyche and usher in a generation of retrenchment—have failed to materialize. It is true that consumers in developed economies are still tightening their belts, and we don’t expect the retail exuberance of 2006–2007 to return in the near term. But this is a symptom of the present economic condition, not some fundamental shift in peoples’ desire to buy or a wholesale rejection of consumerism.
To gauge global consumer sentiment, BCG recently surveyed more than 35,000 people in 20 countries. Among other criteria, responses were segmented by gender, location, generation, and income level.
Here we summarize and discuss some of the key findings from responses in nine developed economies: Australia, Canada, France, Germany, Italy, Japan, Spain, the U.K., and the U.S. The survey included around 23,000 respondents or, on average, 2,555 respondents per country.1 Notes: 1 The sample sizes were large enough to make our survey results statistically significant at a difference of 2 percent or greater. A subsequent report will explore our findings from the rapidly developing economies of China, India, and Brazil, as well as eight African countries.
The key findings deliver more bad news on consumers’ spending plans, but they also offer a silver lining regarding the near-term outlook in developed markets.
First, the less positive news:
Now for the good news:
These findings show that while global consumers feel fatigued and financially strapped from the prolonged economic slump, most are neither emotionally spent nor bankrupt, except for those in a few particularly hard-hit countries. By and large, people still place a lot of importance on what they buy. They see their choices of products and brands as reflections of their status and as personal expressions.
What has changed since the beginning of the global recession is what we call the “status currency”—the priorities and values of average consumers. Ostentatious splurging has given way to more emphasis on value for money and quality. Consumers are gravitating more toward brands that convey social awareness, environmental stewardship, and a healthy lifestyle, such as natural and organic ingredients, rather than brands that are simply more expensive.
To succeed in this challenging economic environment, companies must move past the doom and gloom. They should tailor their brand campaigns to the new status currency of consumers in different developed economies and of different generations, while being particularly sensitive to the economic circumstances of households in crisis-ridden economies. Luxury brands should continue to put less emphasis on conspicuous consumption and more on experiences, product performance, and artisanship. And companies should aggressively target Millennials now so that they remain engaged with their brands as they enter the stage of life in which they will have both more discretionary income and more control over essential household spending.