Research by the Future Consumer Index (FCI) shows that price search is the most important factor in making purchasing decisions
ONBrazilian consumers are cautious when buying. Research conducted by EY-Parthenon shows that almost all Brazilians surveyed – 91% – are worried about their finances, and 46% are looking for new brands to cut costs. Additionally, 81% of respondents are questioning how they spend their time on the things they value most, and 62% intend to spend more on experiences that make them happy.
The figures are included in the tenth edition of the Future Consumer Index (FCI), produced by the strategic consultancy, which analyzes consumer behavior in several countries around the world. The figures for Brazil also reveal a consumer who is more concerned about sustainability, with 61% of them saying that buying and behaving sustainably is a guiding principle in their daily lives.
The data shows that in the last three years, people have changed their patterns and habits. In all parts of the world, mainly due to the pandemic, consumers have become more flexible, adapted to e-commerce and started to value issues such as ESG (Environmental, Social and Governance) practices in companies.
In Brazil, 46% of respondents believe that they will shop online more often from now on. Furthermore, according to FCI, 78% of Brazilians expect the way they use technology to improve in three years. On the other hand, 77% of Brazilians are extremely concerned about identity theft and fraud, as well as security and data breaches.
Recent global economic uncertainties are also involved in the daily life of the population. The latest edition of the FCI shows that consumers globally have become accustomed to living in a more troubled environment, with 63% of them not expecting the economy to recover in the next 12 months.
The closure and uncertainties caused by Covid-19 have also changed the way of everyday life. A total of 85% of Brazilians say they will be more aware and careful with their physical and mental health in the next three years. More than half – 62% – of consumers in Brazil intend to spend more on consumer experiences that leave them satisfied.
All these data point to a challenging scenario for companies, which depend on the market to ensure their own survival. “The more complex the clients are, the more complex the business models are,” says Eduardo Tesche, partner at EY-Pathernon in South America, during the “Consumer by Industry Meeting – Consumer Influence in Ecosystem Transformation” event.
Promoted by MIT Sloan Review Brazil, in partnership with EY-Parthenon, the meeting took place this week and brought together business leaders to discuss trends in the retail sector after the pandemic.
Among the mentioned points, it was discussed how companies should define their strategies to improve their performance in the consumer market. One of the ways is the formation of business ecosystems between several companies, the goal of which is to improve the performance of each of them with joint strategies.
“There is a need to understand what customers want in a post-pandemic world and, even more so, in a post-interest rate world,” says Tesche. He shares his opinion with Juliana Crema, partner at EY-Parthenon and head of strategy for the consumer and retail segment. “Inflation is not only present in Brazil and the price factor is still the main attribute in people’s purchasing decision,” says Juliana.
Another challenge for companies, according to Juliana, is that, despite the consumer’s desire to buy products with a higher degree of sustainability, which, as a rule, have a higher price, he is not ready to pay more for it.
Aware of all these changes, the industry tries to adapt to the new standards. “Our boss is a consumer. We have to adapt to what he wants to consume, not just what we want to sell,” explains Fernando Fiorini, head of Mondelez’s business development area in Brazil.
Owner of brands such as Lacta and Nabisco, the multinational company in the food sector has a strategy of balancing industrial efficiency and customer service. For this, one of the priorities was the development of e-commerce through ecosystems with partner companies. The result was a 130% increase in Mondelez’s online sales in the last year alone. “Our e-commerce currently accounts for about 6% of our sales volume. Before the pandemic, it was practically zero,” says Fiorini at an event promoted by MIT/EY.
The population is also more demanding in relation to health and well-being in food, which has a direct impact on the food industry. The desire is healthier food, with less salt and sugar, but with flavors very close to those you are used to. In addition, issues such as the origin of raw materials and sustainable manufacturing practices are also on the radar of customers. “We have to deal with all these problems, which is a big challenge for the industry,” explains Laerte Moraes, head of Cargill’s starches, sweeteners, cocoa and chocolate businesses.
In the financial sector, in addition to the pandemic, another factor that accelerated technological innovation was the popularization of PIX. “PIX transformed the industry as a whole. There has been an acceleration of six years in six months in the process of digitalization of means of payment by the population”, summarizes André Cazotto, head of strategy at PicPay.
In retail, the new era points to figital – a combination of physical and digital means of sale. “The physical store is no longer just a direct point of sale and has become a point of relationship with consumers,” says Orivaldo Padilha, vice president of finance at Via, the company responsible for brands such as Casas Bahia and Ponto. According to him, the synergy provided by figital has been so successful that in the regions where new physical stores are opened, sales through digital channels are increasing. “This merger has brought many positive results for the company as a whole,” says Padilha.