Consumer concern around cost of living has eased, says Capgemini’s report

Consumer concern around cost of living has eased, says Capgemini’s report

According to Capgemini’s annual consumer trends report titled ‘What matters to today’s consumer’, consumer concern around the rising cost of living has eased slightly over the past year, with just 43% now fearing their personal finances will worsen in the next few months, compared to 80% who felt that way a year ago.

The report further reveals how continued growing inflationary pressures are shaping consumer expectations of retailers, their spending habits and the channels they are exploring. The report also found that generative AI, which is being increasingly used by consumers while shopping, can also help improve retailers’ operational efficiency and enhance customer experience.

Talking about the report, Lindsey Mazza, global retail lead, Capgemini Group, said, “Though consumer concerns have eased this year, they remain prudent about spending and are either unwilling or unable to spend more. It is crucial for retailers to transform their operations in order to pass on cost benefits to consumers, who are increasingly selective in their choice of products and brands.”

Furthermore, consumers expect retailers to alert them of shrinkflation and skimpflation as 65% of consumers are expecting retailers to tell them when brands reduce a product’s weight or quality, but the price remains the same.

The report further highlights that consumers say that generative AI has enhanced their shopping experience. The consumer awareness of generative AI in shopping has increased as 72% of consumers are aware of the use of generative AI in shopping experiences and currently one-fifth of consumers have already used generative AI while shopping. Of those that have used the technology, over half of consumers say that generative AI tools have notably enhanced the experience.

The report also focuses on concerns that generative AI’s potential misuse must be addressed for the technology to be leveraged to its full potential. Nearly two-thirds of consumers are concerned about generative AI producing false or misleading testimonials or reviews.

“Retailers need to rethink operational strategies and adopt innovative solutions, such as AI, automation, Internet of Things (IoT) to enable smarter demand sensing, touchless forecasting, efficient fulfillment options and offer improved consumer interactivity. All of these provide opportunities to reduce the cost of goods sold and unlock cross-channel growth, ” Mazza added.

Interestingly, 63% of consumers want brands to play an active role in their education around sustainable products. To obtain more information on the sustainability of products, almost half of those surveyed support the inclusion of detailed labels and scannable QR codes on product packaging that provide carbon, water footprint and product recyclability attributes.

Social media is increasingly playing an important role not just for product discovery but is also emerging as the preferred platform for purchase, particularly among younger generations. Over half of consumers who have purchased on social media seek purchasing advice from influencers, claiming they give a clear breakdown of factors to consider before making a purchase. A similar proportion of consumers who have purchased on social media also look to influencers for discounts and offers.

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