Resilient Consumers Are Emerging Amid an Era of Volatility – WWD

Consumers’ reactions to living with uncertainty have brought on what experts at Accenture are calling an “Era of Volatility,” referencing an ongoing state of anxiety that is driving people to change behaviors quickly, and, often in, unexpected or contradictory ways. The company’s consumer survey of more than 10,000 people across 16 countries, reveals that the majority of consumers (85 percent) believe they are currently living with uncertainty.

Importantly, this consumer uncertainty, which was a key talking point throughout the pandemic, does not show signs of being alleviated. More than half (52 percent) of consumer respondents told Accenture they expect the feeling to last for more than 12 months as they look ahead. Moreover, the company’s survey data reveals that 56 percent of global consumers expect the coming years to be a struggle and 68 percent are more cautious about the decisions they make these days.

Still, while many are cutting back, Accenture’s experts say the “Era of Volatility,” has also introduced the “resilient consumer,” as shoppers adjust to continued disruption by seeking out ways to protect and control what they value. Forty-four percent of consumers say challenges in recent years have created opportunities and 61 percent say they are trying new experiences or adopting new habits to improve their lives.

Strong indicators of the emerging resilient consumer in Accenture’s’ report include confidence in a better financial future, strong intention to spend across categories and an unwavering concern for the environment. Data shows that these consumers are quite bullish in terms of finances counting 73 percent of respondents who expect their disposable income to stay the same or improve in the next 12 months. Consumers also report plans to spend more across eight out of 15 categories. The environment continues to be a key focus for consumers, ranking as the second top consumer concern after the national economy.

Important to understand, are the various ways that consumers will show resiliency. Put simply, resilient consumers “adapt to living with uncertainty on their own terms.”

“To succeed in this market, retailers and brands should not overgeneralize when it comes to examining the drivers of consumer behavior,” Jill Standish, senior managing director and global lead for Accenture’s Retail industry practice. “Instead, they need to understand the nuances of the consumer as an individual — pay close attention to data and analytics — and use that insight to offer the right product and the right experience at the right price in the right places on the right channels.” 

To help companies understand the nuances and view consumers as real people, Accenture divides consumer outlooks into four mindsets (living in the moment, freezing, seizing opportunities and getting focused) that indicate how a consumer is expected to live and spend. Rather than relying on traditional demographics, Accenture’s life-centric lens aims to uncover a holistic understanding of consumers.

Consumers with a living-in-the-moment mindset are “resilient by accepting the lack of control over circumstances and choosing to enjoy life now,” and are typically young consumers with an income level that skews lower and will remain stable. Also skewing younger, consumers with a seizing opportunities mindset are “resilient by exercising control over lives by taking advantage of opportunities presented by recent volatility.” This group has an income that skews higher and has been stable, though will improve.

Representing a cohort that is bracing for impact and expects uncertainty over the next couple of years, the freezing and getting-focused mindset consumers also represent older consumers. Consumers with a freezing mindset are “resilient by feeling powerless over circumstances and bracing for hard times ahead” while consumers with a getting-focused mindset are “resilient by exercising control over lives in preparation for difficult times ahead.” In comparison, consumers with a freezing mindset have an income that skews lower while consumers with a getting-focused mindset have an income that skews towards the middle.

“People are demonstrating a resilient mindset and ability to deal with adversity, withstand shocks, and adapt to continued uncertainty,” Standish said. “Now, retailers and brands must do the same. It means taking a holistic view of the consumer and committing to a continuous strategy of reinvention that allows them to quickly adapt and accelerate as disruptions and crises arise over time. Creating dynamic data-driven pricing strategies, targeted marketing and loyalty programs, and stress-testing the P&L against different spending slowdown scenarios, are just some of the ways companies can get ahead of the market.”

Understanding the four consumer mindsets can be useful in the way that they show how people are living and spending with their values. A key example of this is the way resilient consumers prioritize sustainability, looking to care for the planet without breaking the bank is just one key trend that represents resilient values. And, notably, the trend shows nuanced behaviors across the different resilient mindsets.

Accenture’s survey data shows that 83 percent of consumers have increased sustainable shopping behaviors in the last year. These behaviors present themselves with consumers only buying what they need, bringing reusable bags to the store, buying better quality goods that will last longer, repairing or upcycling what they have, and buying reusable or refillable products. Still, 81 percent of consumers say they “feel they have less control over their environmental footprint compared to pre-pandemic.” Accenture’s analysis further reveals that there is a gap between how organizations think they should encourage consumers to act sustainably and how consumers actually define or act sustainably.

To practice individual sustainability, consumers shop in ways that align with their specific mindsets. For example, those with higher incomes are more likely to buy quality goods that last longer while those with lower incomes are most likely to buy secondhand.

Acknowledging that permanently moving the needle on sustainability is a complex challenge, leaders at Accenture say the opportunity is here.

“There’s no greater challenge facing the consumer industries, than how to manage the transition to future consumption,” said Oliver Wright, senior managing director and global lead for Accenture’s Consumer Goods & Services industry practice. “The focus needs to be on reinvention with tangible action to advance the sustainability agenda. It means paying close attention to evolving and multifaceted consumption habits to help people do better by the environment regardless of their motivations for doing so.”

The authors of the report encourage retailers and brands to utilize these resilient mindsets to better inform consumer behaviors and discover various trends. “Keeping up with the many forms of human resilience is consumer companies’ greatest challenge. It can be their greatest opportunity too.”

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