Consumer Market Flashpoints: Finding Opportunities Despite the Uncertainty

In the coming years, consumers and businesses face an array of challenges, with rising inequality, mass migration and prevailing uncertainty about another crisis being among the major ones. Nevertheless, within this are untapped opportunities for companies that take appropriate action and address the disruptions holistically and early on.

Rising inequality

From Black Lives Matter in 2013 to the protests demanding justice for Nahel Merzouk in France in 2023, income inequality continues to echo across all social movements. Despite systematically narrowing prior to the pandemic, the income gap grew in 2022, while over 2023-2024, it is expected to widen further, leading to low-income consumers becoming even more deprived in comparison to the most affluent.

The income of the lowest earning households as a share of the highest earning households in 2023 is set to decrease to 6.6%

^{Source: Euromonitor International}

Furthermore, due to inflationary environment and rising essential spending, income inequality is increasingly attributed not only to emerging and developing countries, but also to developed nations. The US, for instance, is among the top 20 most unequal countries globally in 2023.The costs of income inequality are high. For the corporate sector, growing income polarisation shrinks the market, spreads negative economic sentiment, raises consumer sensitivity, and triggers social backlash and unrest, which disrupts economic predictability and status quo in consumerism.

By taking proactive measures, such as introducing tailored offerings as well as dynamic and personalised pricing models, businesses can secure tangible benefits and become more agile. Furthermore, as the appreciation for values among consumers grows, and businesses are perceived as partners in battling the cost-of-living crisis, participating in inequality-reduction initiatives becomes another way to differentiate and appeal. More than 30% of consumers globally prefer to buy from brands supporting issues that are aligned with their values, according to Euromonitor International’s Voice of the Consumer: Lifestyles Survey.

Mass migration

Political instability, climate change and global economic slowdown are resulting in unprecedented mass migration. In 2023, net migration has surged to pre-pandemic levels, with North America and Europe witnessing a net influx of nearly three million new citizens. Concurrently, regions such as Latin America, South and Southeast Asia are experiencing an outflow of citizens, while also facing a boost in remittance inflows, contributing to their economic development.

There are 147 million foreign citizens globally living outside of their usual residence in 2023, a figure close in size to the population of Japan

^{Source: Euromonitor International}

Due to the numerosity, ageing demographics, a shrinking workforce, stagnating productivity and consumption growth, the sentiment on immigrants is shifting. Nations such as Germany, Canada and the US are prioritising long-term gains over short-term challenges of immigration. Yet, immigrants are not valued solely for their contribution to the labour force.Immigrants are straightforward additions to the consumer market, and companies that proactively target expatriates early on are reaping the long-term benefits. Most obvious sectors that feel the positive impact of foreign influx are essential goods, accommodation and transportation. However, led by acculturation blues, expatriate consumers are also searching for home-like discretionary services, such as ethnic beauty treatments, cultural gatherings or foodservice. Solutions, personalised in terms of ethnicity, race, culture and religion, and proactive marketing through communities, are the growth avenues enabling increased market size and corporate agility despite the adverse economic climate.

Another pandemic

One of the devastating effects of the pandemic in 2020 was USD2.6 trillion decrease in consumer expenditure. Avoiding similar calamities in the future, first and foremost, means learning the lessons from the previous one and adapting to the transformed consumer demand. Personalising the consumer journey, embracing responsibility and incorporating wellness stand out as the core lessons for growth from a previous health crisis.

Embracing a multichannel approach is essential for catering for consumers across preferences and along the shopping journey. Digital presence is also non-negotiable, consumers are becoming online citizens and always-on buyers, increasing the need for a broad marketing reach, engaging shopping experiences and a seamless journey.

Traits such as multidimensional responsibility and wellness are essential for growth organisation in post-pandemic reality. While providing access to holistically sustainable and ethical goods and services empowers consumers to do good by the planet and community, embedding wellness into offerings through ingredients, packaging, education or access to customer support channels, is not only helping consumers to become healthier but also establishing a brand as a health partner in the personal wellness journey.

Learning lessons from pandemics is crucial to building resilience and adaptability in the polycrisis era. By retracing the post-pandemic changes, companies better understand long-lasting consumer trends, mitigate future risks and embrace innovation as part of their DNA. Consumer-wise, preparedness reverses the sentiment to positive through boosting their confidence.

Learn more about consumer market flashpoints in our report, Consumer Market Flashpoints: Between Uncertainty and Opportunity, to stay ahead and unlock the potential in volatile times.