AlixPartners Releases Comprehensive EMEA Consumer Priorities Survey

• 37% of all consumers plan to spend less in 2024 compared to 2023
• 36% of all consumers plan to spend less on restaurants and bars in 2024
• 35% expect to spend less on travel and holidays in 2024
• 40% expect to spend less on entertainment
• 21% of all consumers say they will spend less on groceries in 2024
• 27% of respondents aged 18-24 age and 46% aged 65 and over plan to reduce retail spend in 2024

 

NEW YORK (December 12, 2023) – AlixPartners, a global consulting firm, today released its EMEA Consumer Priorities Survey, The Critical Consumer 2024, providing a comprehensive analysis of consumer sentiment and preferences across the region for the year ahead. In a year marked by economic challenges and geopolitical insecurities, the report offers invaluable insights for businesses aiming to navigate the evolving landscape of consumer-facing industries.

Challenges and Opportunities in the Economic Landscape

The lingering effects of the post-pandemic era have created a crunch in consumer budgets, intensifying competition among brands vying for a share of the constrained spending. Geopolitical uncertainties, particularly in Ukraine and the Middle East, further contribute to the complexities impacting consumer-facing industries such as Retail, Consumer Products, and Leisure (Entertainment, Hospitality, Restaurants, and Travel). The year 2024 is expected to continue this trend, with varying impacts on each sector.

To help businesses thrive in this challenging environment, AlixPartners conducted an extensive consumer priorities survey across seven EMEA countries, including France, Germany, Italy, Saudi Arabia, Switzerland, the UAE (United Arab Emirates), and the UK (United Kingdom). Between October and November 2023, over 10,000 respondents were surveyed, by YouGov for AlixPartners, and provided insights into their personal purchase intentions and shopping preferences for the upcoming year.

AlixPartners Critical Consumer 2024 report dissects how consumer sentiment has shifted across markets, and where spending habits will turn next, broken into five areas of focus:

1. Spending intentions: Navigating economic uncertainty in the holiday season

The holiday shopping season faces a heavy price pinch, with consumers adjusting spend due to elevated inflation. Notable trends include a rise in trading down to more affordable brands, particularly in the retail sector. Consumers are expected to focus on value-right products that provide strong value-for-money.

2. Category evolutions: Impact on discretionary spend across categories

Financial difficulties will lead EMEA consumers to shop less frequently and spend more cautiously across various non-essential retail and leisure categories in 2024. An efficient product range and offering is imperative to capture spend in retail, while quality remains critical for leisure operators. The data also highlights age as a strong indicator of retail spend reduction, with younger consumers less willing to let economic conditions impact their lifestyle.

3. Omnichannel targeting: Adapting to shifting consumer preferences

Omnichannel solutions are critical as consumers shift spend across channels and categories to manage budgetary pressures. Digital payment methods are preferred, but preferences vary based on income levels and age. Companies must consider these factors when tailoring marketing and promotional strategies to invest in the right areas.

4. Customer personalisation and loyalty: Importance of personalised experiences

Consumers now expect a personalised and frictionless experience at every touchpoint in the omnichannel shopping journey. Personal interaction remains crucial, with nearly two-thirds of EMEA consumers preferring personal contact with in-store assistants. Efforts to augment consumer loyalty must extend beyond pricing to a thoughtful, tailored user experience.

5. Use of technology: Embracing generative AI and modern digital offerings

Generative AI has become crucial in improving the online buying experience, particularly in sectors where consumers prefer to test products in person. The adoption of AI tools for research is catching on fastest in the Middle East. Consumers across regions show enthusiasm for modern digital offerings such as virtual fitting rooms via AR and unmanned stores.

The economic headwinds in 2024 will likely accelerate transformation and consolidation in consumer-facing industries, driving increased competition. The outcomes of such turbulent times will determine the survival and thriving of players in saturated markets.

Commenting on the new research, The Critical Consumer 2024, Matt Clark, Partner & Managing Director and, EMEA Retail Lead at AlixPartners said, “Our latest consumer research shows widespread belt-tightening across the board, with only grocery maintaining spend levels but even here, volumes still drop sharply because of inflation. Only those retailers at the very top of their game will retain or grow share of wallet and I fear we are in for another round of restructuring and consolidation in early 2024.”

Andrew Searle, Partner & Managing Director and, EMEA Consumer Products Lead at AlixPartners said, “The message is clear for the Consumer Goods sector- consumers behaviour is continuing to shift into 2024 and ability to pass inflationary increase prices without significant volume loss is over. As retailers' position to be the champion of consumer value - the CPG-Retailer dynamic is shifting. 2024 will be a challenging year for Consumer Goods companies, only the most proactive management will thrive in this environment.”

Beatrix Morath, Partner & Managing Director and, Global Co-Leader of Restaurant, Hospitality & Leisure at AlixPartners said, “Given the discretionary nature of spend in Travel, Hospitality and Leisure, these sectors have shown remarkable resilience post-COVID, as consumers continued to prioritise these activities despite the recent constraining economic climate. However, should household belts tighten further in 2024, it will be vital for operators to preserve customer loyalty by delivering the highest quality experience possible – at every stage of the customer journey. While frequency of spend or travel may suffer, consumers will still be less willing to trade down or compromise on precious occasion- and experience-driven moments. Strong products and intelligent pricing will be key. Maintaining market share in challenging times such as these will prove to be an invaluable springboard for future growth when market conditions improve.”

 

The full Critical Consumer 2024 report can be found here.