More and more consumers are poised to enter the marketplace in the coming years and businesses will need to be ready for a wave of ethically conscious and gender aware shoppers.
HSBC’s Future of Consumer Demand report highlights that data indicates 90% of the world’s population will be considered “consumers” by 2020. The report uses the World Bank’s income threshold of over $2 per day to determine what a consumer is, and by 2021 UN population projections estimate less than 7% of people will live on $2 a day.
With 7.4 billion consumers by 2021, retailers need to be prepared for an influx of “new age” shoppers. HSBC suggests that ethics, gender, and a concept of “disownership” will be priorities in the coming years.
With the rise of easily accessible information, the transparency of businesses and their products will be a high priority in consumer’s minds.
In emerging markets like China, 77% of respondents in a global survey revealed buying from ethical brands was important to them. This majority was mirrored in advanced markets, where 58% of respondents said it was important.
According to HSBC, easier access to information about brands and products, through both online reviews and information revealed by brands, is to thank for consumers’ changing tastes. Tastes are becoming more sophisticated, and HSBC warns, “consumer goods brands in particular need to understand this transition”.
“There is a notable demand for green consumerism in Asia, particularly with wealthier consumers, who are looking to differentiate themselves not just through consumption alone but through some form of improved consumption. Companies must engage more on ethical issues, which are complex,” Francis Sullivan, deputy head of global corporate sustainability for HSBC, said in the report.
Brian Walker, retail expert at Retail Doctor Group, told SmartCompany “we are seeing the rise of the conscious consumer”.
Walker believes an influx of technology and education has lead to more ethically conscious consumers in the retail sector, and the traditional ideals of price and speed in retail are being left behind.
“This is a great thing for the environment, but retailers that want to survive in this world need to have an understanding of consumer values, and have an ethical ethos about their business,” Walker says.
HSBC’s report details the rise of women in the workforce, and how retailers and service providers must be aware of this. One example provided is an online florist in Beijing which has seen increased business recently, with a customer base that is 80% female.
The report also recommends businesses keep women in mind when developing products and services, saying it “is not to say that the demands of women are dramatically different to men, but rather there are nuances”.
“With social media and both the formal and informal gender networks and interest groups that are engaging there, the backlash can now be felt immediately around the world when organisations get it wrong in how they market products by gender,” said Birgit Neu, global head of diversity and inclusion at HSBC.
This has recently been seen in Australia, with products such as Target’s recent ‘Batgirl’ shirt receiving a large amount of public backlash.
Neu also notes consumers are aware when businesses get it right, saying, “the Twitterverse has been quick to note when organisations are taking the “boy” and “girl” labels off products and services that should be gender neutral and pitching them in a way that’s appropriate for everyone”.
Pippa Kulmar, senior strategist from Retail Oasis, agrees, telling SmartCompany many department stores in the US and the UK are starting to avoid having children’s toys pitched towards any one gender.
“It’s a sign of society becoming more liberal towards gender, and becoming more progressive,” Kulmar says.
She warns there will always be complaints from customers who are “used to the way things have always been”, and advises businesses to consider their customer base before making any drastic changes.
“It’s all about listening to your customers, but not letting them lead you,” Kulmar says.
“If you have a point of view, stand up for what you believe in. Often retailers will wait for something to happen rather than leading.”
The HSBC report also touches on the difference in purchasing habits by consumers of different ages, revealing younger generations are purchasing less, and older generations will be responsible for the majority of consumption.
By 2020, the over-60s will outnumber the under-5s, meaning older generations will be consuming more than younger generations.
Amanda Murphy, head of mid-market banking in the UK for HSBC, said in the report this is a case of “disownership,” claiming consumers born between 1980 and 1995 “don’t want to own things”.
“The big trend in the sharing economy is disownership – the fact Millennials don’t want to own things – especially things that are expensive and perceived as a lot of hassle,” Murphy says.
“They don’t want to have the things that everybody else has, they don’t want the same handbag or watch as the next person. They like the idea that they are different.”
Kulmar agrees, saying: “We already have everything we need”.
“We have more stuff in houses and people are getting to the point where they don’t need as much stuff as they have,” she says.
“The status has changed, it’s about sustainability and mindfulness now. Sustainability is the core issue of the next century.”
Kulmar believes there is a big movement around spending less on a purchase, and says the rise of “buy/swap/sell” groups on social media is an indication the younger generation doesn’t want to purchase as many physical goods.
“There are more and more young people who are concerned with this, and a big thing for retailers now is how do you build meaning into the things they do buy,” she says.
“Things such as providing money to charities or recycling initiatives are a good way for retailers to encourage more conscious shoppers.”
Dominic Powell is a journalist at SmartCompany and a tech and music geek. When he’s not writing, you can find him reading or browsing record shops.
