McKinsey & Company conducted a global survey of more than 22,000 consumers in 26 countries. The goal was to understand how consumers felt about their financial prospects and its implications on their buying behavior. For brands and retailers understanding consumer behavior, anticipating the consequences and reacting quickly will be the difference between the winner and losers in the quest for the consumer’s wallet.
The McKinsey survey revealed key insights regarding consumer behavior:
- Consumers proactively search for savings. Implication: the “value for money” must be a focus regardless of price point.
- They are brand loyal but only if the price is right. Implication: brands and retailers must make data-driven decisions to inform granular strategies that drive growth.
- Once a consumer “trades down,” they might not go back. Implication: You must know your customer inside and out so you can develop value propositions for consumer retention.
- They are selective splurgers. Implication: Have clear pricing hierarchy. Don’t get stuck in the middle.
- Consumers shop across channels. Implication: Ensure product availability and consistent pricing across channels.
A positive indicator for the beauty industry is the cosmetic category, which has one of the highest global trade-up rates.
Read the full survey and insights at McKinsey & Company.