Consumer behavior has shifted significantly over the past few years, influenced by global events, economic challenges, and rapid technological advancements. At Simon-Kucher, we help businesses navigate these shifts to enhance customer experience, drive loyalty, and secure sustainable growth. Discover top consumer trends and actionable strategies here.
The global consumer landscape
The global consumer climate has seen significant shifts, with distinct regional dynamics influencing purchasing behaviors. Historically, regions like China were at the forefront of global growth, but recent economic shifts have altered that narrative. The sun is no longer rising in the East, but in the West.
US: Resilient market leader
The US remains a highly resilient and dynamic consumer market, setting trends that ripple across the globe. Despite inflation and high interest rates, US consumption remains robust. This resilience is underpinned by the market’s ability to innovate and adapt quickly, often acting as a bellwether for other regions.
Read our holiday shopping report 2024 here.
China’s slowing momentum
China, traditionally a global growth powerhouse, is experiencing a significant transformation. For the first time, its GDP growth hovers around 5%, a marked shift from the double-digit growth rates of previous years. This economic slowdown has reshaped consumer behaviors, with more cautious spending patterns emerging. Consumer companies operating in China are also adapting their offerings to align with a more value-conscious consumer base.
Europe’s role as a trend follower
Europe, while influenced by its unique economic and cultural factors, often mirrors trends originating in the US or Asia. The delayed adoption of behaviors and preferences highlights the region's role as a follower in the global consumer landscape. Businesses operating in Europe must stay attuned to trends emerging elsewhere to remain competitive.
Polarization in consumer spending
A defining trend for 2025 is the increasing polarization in consumer spending. Consumers are balancing cost-saving measures with indulgent purchases. This behavior puts significant pressure on the middle market, as consumers trade down to private labels or up to luxury brands.
Polarization isn’t limited to a specific geography or category. It’s a global behavior with consumers seeking value in some areas while splurging in others. This dismantles traditional barriers. Shoppers who previously stuck to a specific retailer are now mixing and matching, moving between discount stores and luxury boutiques without hesitation.
Read our article on consumer polarization here.
Adapting to a squeezed middle market
With the middle market under pressure, those that traditionally dominated this segment must rethink their strategies. Companies can create offerings that appeal to both polarized ends of the spectrum without alienating either. By responding with diversified portfolios, sharp segmentation, and tailored communication, you can remain competitive and relevant in this new landscape of polarized spending.
Revenue growth management (RGM)
Revenue growth management (RGM) has emerged as a critical strategy for navigating the complexities of today’s polarized consumer behaviors. RGM integrates pricing, product architecture & mix, trade terms, and promotional strategies, placing the consumer at the heart of every decision. By breaking down silos between sales, marketing, and finance, RGM enables companies to deliver the right product at the right price with the right activation through the right channels, optimizing both revenue and consumer loyalty.
Discover more about our RGM approach here.
Sustainability: From buzzword to baseline
Sustainability has transitioned from a desirable trait to an essential expectation for modern consumers. It’s becoming the new norm, with no room for companies to avoid incorporating it into their core strategies. According to our recent study, 78% of consumers rank sustainability among their top five purchasing criteria, and 38% place it as their number one priority. Additionally, 58% of consumers report that they remain loyal to brands that actively pursue sustainable practices.
However, a "fatal disconnect" exists between the sustainability consumers demand and what companies currently offer. Many consumers perceive sustainable products as inherently more expensive, creating a significant barrier to adoption. Bridging this gap requires rethinking pricing structures, business models, and communication strategies.
Discover how consumers are redefining sustainability in our new book:
The Demand Revolution
The role of data in driving success
Data is a pivotal enabler for sales maximization, striving to understand and address consumer polarization and market trends. It empowers you to refine consumer segmentation, optimize channel strategies, and deliver highly personalized activations. However, the real value of data lies not just in understanding consumers but also in strategically engaging with them to drive growth.
Combining Sell-in, Sell-out and Retail Media data allows you to move beyond broad demographics to a nuanced understanding of your consumer base. For instance, instead of categorizing consumers solely by age or location, you can now segment based on frequency of purchase, product / format preferences, brand loyalty, willingness to pay and many more KPIs.
The need for a 2.0 or even 2.5 approach to consumer understanding is clear. Data must be a cornerstone of strategy, driving deeper insights and actionable engagement plans. Those that embrace a disruptive, data-driven approach will be the ones to succeed in an increasingly complex consumer landscape.
Find out how we can elevate your digital growth.
Preparing for 2025
As we approach 2025, agility and innovation are non-negotiable. It’s time to reevaluate traditional approaches and embrace new methods and tools, ranging from RGM to GenAI.
At Simon-Kucher, we specialize in helping consumer businesses decode behaviors and translate insights into actionable strategies. Whether it’s optimizing your portfolio, refining your commercial policy, or enhancing sustainability practices, our expertise ensures you’re equipped to thrive in a complex market. Contact us.
