What’s changed in the consumer market over the first quarter of the fiscal year? A number of trends are emerging in the wake of the pandemic that could, in fact, stick around for the long term. Here are some of the main ones we’ve seen:
Growth, Growth, and More Growth
As the first quarter of the new fiscal year comes to an end, so do some of the unusual trends we’ve seen over the last year as markets start to recover. While the pandemic is far from over in numerous places around the world, markets everywhere are starting to move to pre-pandemic levels. Either that, or they have at least adapted to the disruptions in the supply chain caused by COVID-19.
Overall, the global economic recovery is seeing prices rise, but it’s also seeing growth from the consumer side. Consumers are eager to funnel money back into the economy, but with a new mindset: spend money thoughtfully rather than frivolously, on worthwhile investments and upstanding companies. Now, the modern, post-pandemic consumer – especially those from millennial and Gen-Z generations – focuses on the company’s practices. Are they being sustainable? Do they employ a diverse workforce? Brands who embrace such a change are succeeding. You can read more about that here.
Several sectors, like raw agricultural materials, have seen a huge surge as of late. This results in higher food prices for the consumer. This has particularly occurred in Asia. Food manufacturers are raising their prices so that the onus of this price surge falls on the consumer. For example, the Japanese flour miller Nisshin Seifun Group is raising the price of that wheat flour household products by 2% next month. Ajinomoto is raising the price of its mayonnaise by about 9%. Farmers are set to benefit from this shift, but many consumers will be left upset with such a development.
Over in the UK, the inflation rate hiked up 2% last month, the highest in almost two years. This is driven by the same phenomenon as with food prices in Asia. The post-pandemic economic recovery is, in this case, resulting in elevated prices for fuel and clothing. Particularly as we are now in the warmer months of the year, fashion retail is seeing increased demand for summer clothes. Rising fuel costs come as restrictions lift across the UK and people take trips up and down the country to the coasts, still restricted from flying internationally.
Adapting to ‘The New Normal’
Accompanying this comes almost a willingness to adapt to a slightly different way of life. We see this behaviour reflected from consumer to company. Consumers have adapted their spending to reflect the new normal, evidenced by buying decorative face masks, buying tickets to events only after ensuring they are COVID-safe, and improving their home offices. As a result, businesses are capitalising on this, making it easier for consumers to embark on DIY projects at home, continue to perform their jobs effectively from home offices, and feel safe from coronavirus wherever they go.
Over the last few months, we’ve noted a few specific trends across the supply chain that indicate such a shift. For one, businesses are onshoring their manufacturing processes. This is to reduce chances of supplies running low and excessive delivery times. You can read our insight about this phenomenon here.
We’ve also seen supply chains change their practices completely. For example, we recently created an insight about how just-in-time supply chains will fade away in favour of just-in-case supply chains. What does that actually mean? Check out our insight on the topic here.
Exploring Sustainability as a Consumer
Sustainability has become a cornerstone of how businesses operate as climate change becomes an increasing concern. This also means that all over the world, we are seeing innovation in this realm. One particular company, In-Between International, has taken sustainability to the next level. IBI harnessed the properties of an invasive water plant species for a profitable purpose. This ingenious solution enabled them to help clear huge amounts of space where this plant was running rampant. Not only that, they managed to create a product from the species that could be used and sold as an insulation material.
We had the opportunity to collaborate with IBI’s founder for a series of articles exploring their journey and the future of innovation within the sustainability section. The full report can be found below.