Consumers across Canada are preparing to hunker down for a long financial squeeze, amid growing financial concerns (80%) and low economic confidence (63%), according to the latest EY Future Consumer Index Survey. Over half of households expect their living costs to continue trekking upwards, as concerns over personal finances affect all income levels, from low income (87%) and middle class (77%) to high income (64%).
“Stunted by inflation, consumers are turning back to pandemic-induced behaviours – prioritizing savings over spend,” Monica Chadha, EY Canada Retail Leader. “This trend towards limiting non-essential spending and looking for more sustainable alternatives presents a challenge to fast fashion retailers.”
Cutting costs through conscious consumption
As the cost of living rises, consumers are seeking new methods of conscious consumption by repairing their belongings rather than replacing them (69%), buying second-hand products (25%) and cutting back on the amount of food they waste or toss (85%).
A further 72% of respondents state they no longer feel the need to keep up with seasonal fashion trends, and over half say are more comfortable in their own skin, relying less on beauty and cosmetics to boost confidence, up from 48% in October 2021.Alternative experiences and products are sparking new interest
A small but a growing number of Canadians are interested in exploring emerging digital and technology experiences. Nearly 1 in 10 respondents have used digital currencies, experienced the metaverse or purchased a virtual product, largely driven by younger and more affluent consumers.
“Newer forms of digital goods and services present opportunities for companies to invest in developing channels to differentiate their brand experience, innovate and capture more consumer data,” explains Elliot Morris, EY Canada Grocery and Consumer Packaged Goods Leader. “But it’s important to keep in mind that as the digital world expands, consumers will become increasingly cautious when sharing their personal information.”
“Businesses should embed both sustainable innovation and data protection into the foundations of their strategies to show consumers that they use their information in responsible ways that deliver tangible benefits,” adds Morris.
To learn more about the EY Future Consumer Index, click here.Tweet