The new consumer groups care about their looks and their fitness levels
New mega-trends are driving global consumption. Tech-savvy youngsters, households whose children have left home, and emerging economies have become influential new groups of consumers. They all spend on maintaining their health, and all may be more interested in experiences than acquiring goods.
The shape of the world’s population is changing quickly. In the west, record numbers are reaching retirement, while in emerging economies, young populations are growing rapidly.
Even in ageing populations, young consumers will matter more and more. In the US and China, the world’s biggest economies, the modal age is under 30, so over the next decade this group will reach the prime consumption ages of 35 to 54, with more disposable income.
Three new consumer groups have emerged from these changes. The young are ‘digital natives’, having grown up using the internet. They are more likely to shop online, stream media and seek bargains, but less likely to use cash. HSBC surveys found that only 20 per cent of US millennials do not use e-commerce sites at least once a week – compared with a majority of people between the ages of 51 and 65 – and their top purchases are clothes, accessories and electronics. This generation willingly adopts new consumption forms, from ride-hailing apps, crowd-funding or driverless cars to virtual reality. And younger consumers in the west have different attitudes to ownership, renting cars, homes or clothes.
It seems that wealthier people aren’t as concerned about buying things so much as they are about living experiences
The ‘empty nesters’ are older consumers whose children have left home, allowing them to spend on upgrading their way of life. These households have often repaid mortgages and purchased goods such as cars and washing machines; as their children leave they buy better quality, improve their homes – or buy experiences such as travel.
Emerging markets are not only growing financially, they have their own spending patterns. Some 2 billion consumers there will buy via smartphones in coming years. The rise of empty-nesters is evident here too, especially in China, where older generations have spending power for the first time and more women work, boosting household incomes. Some demographers believe that this group – Chinese households aged 40 and above, with earnings ranging between USD20,000 and USD125,000 – is the largest and fastest-growing consumer market on earth.
But all three groups of consumers are getting wealthier and want to be healthier. They care about how they look and feel and increasingly have the means to do something about it. They buy sporting goods, join gyms, undergo cosmetic surgery, seek health checks – and smoke less.
And it seems that wealthier people aren’t as concerned about buying things so much as they are about living experiences. They want to have fun, including eating out, taking cruises and travelling, or visiting casinos. But besides these demographic shifts, wealth is moving from developed to emerging markets and technology access will likely make spending more similar between income groups.
These mega-trends are unstoppable, driven by demographic changes in the global economy, but they have implications for manufacturers of products and services the world over.
This research was first published on 19 April 2018.