Global consumers to cut fashion spend - PwC survey
Consumers globally are feeling the pinch as the cost-of-living crisis continues and 50% are "extremely" or "very" a concerned about their personal financial situation.
It means luxury and premium products, fashion and travel are set to be hit hardest by spending cutbacks over the next six months.
That’s according to the 2023 PwC Global Consumer Insights Pulse Survey. It shows people adjusting their spending with 53% "holding back" on buying non-essentials. And 15% have stopped non-essential spending altogether.
A majority of consumers out of the 9,000+ surveyed said they’ll cut their spend across all surveyed categories over the next six months, a big decline since the previous survey back in June.
The biggest dip will be in luxury/premium or designer products (53% of consumers cutting back), travel (43%), virtual online activities (42%), and fashion (41%).
But consumers claim they’re still willing to pay more for sustainable product types. Some 8% are willing to pay extra for a product that is produced/sourced locally; or made from recycled, sustainable or eco-friendly materials (77%); or produced by a company with a reputation for ethical practices (75%).
Whether that translates into action at the checkout remains to be seen because consumers globally are very markdown-focused at present. Some 49% say they’re buying certain products when on offer; 46% want retailers to offer better value (good news for all those brands that have introduced budget ranges of late); 40% are using comparison sites to find cheaper alternatives; 34% are buying in bulk to save money; and 32% are buying retailers' own-brands to find savings.
It’s interesting that Generation X is the "most-concerned" (47%) and has taken action on non-essential spend, while Baby Boomers have concerns to "some extent" (33%) and are also taking action. But Millennials may be "concerned", yet they’re not really changing their behaviour.
But as well as prices (the top concern for consumers at 56%), people are also noticing supply chain issues with 30% seeing larger queues and busier store locations when shopping in-store. And 26% say these have hurt product availability. This was cited particularly by consumers in Australia (36%), the US (35%) and India (34%). Both price and supply chains are key online too with PwC saying that for online shoppers, rising prices (48%), product availability (24%), and longer than expected delivery times (24%) are the top reported concerns.
Meanwhile, technology remains both a concern and an opportunity. For instance, as online shopping continues to grow in volume, consumers are increasingly wary of data privacy.
Almost half (47%) say they're extremely or very concerned when interacting with social media companies, third-party/portal travel websites (36%), healthcare (34%), and consumer companies (32%). Countries including India and the Philippines are most concerned across such categories. As a result, almost half (49%) say they don't share more personal data than they have to, 32% are are opting-out from receiving communications from these companies. And 26% have overall reduced their interaction with such firms.
Could that be slowing down adoption of the Metaverse as a shopping channel? In the medium term, it remains under-utilised, with only 26% of respondents having used the platform for entertainment, virtual experiences or purchasing products in 2022.
The largest portion of these users have primarily employed the Metaverse for virtual reality (VR), such as playing games or watching a movie (10%), joining a virtual world, such as experiencing a retail environment or concert (9%), or purchasing a digital product, such as NFTs (9%). Those most likely to engage in metaverse-related activities: India (48%), Vietnam (43%) and Hong Kong (42%), as well as Millennials (36%).
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