Affordability, Value, and the Cost of Living: Beyond Price Tags in Consumer Goods

January 2024

After decades of low inflation, consumers are grappling with rising living costs, prompting shifts in priorities and preferences. This report delves into four major consumer goods industries – apparel, beauty and personal care, drinks, and food – to unpack the nuances of “affordability and value” across product categories. The varied perspectives empower companies to refine strategies and thrive in the new reality where consumers feel the squeeze but remain discerning.

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Key Findings

Apparel: an industry at a crossroads

The apparel industry stands at a juncture where it must weigh up the allure of cheap, fast fashion with the growing appeal of ethical alternatives that offer higher quality, value and profit margin per product. Instead of racing to the bottom, apparel players must differentiate themselves by providing high quality and durability, and help consumers achieve affordability through resale and reuse options.

Beauty and personal care: simplicity and savings

Rather than compromising on quality to cut costs and reduce prices, beauty and personal care players need to focus on providing affordability and value through simplicity and multifunctionality. This allows consumers to save by buying fewer products and embracing self-care and uncomplicated beauty regimens, while also projecting brand value in terms of quality, purpose, and transparency.

Drinks: finding the right mix

The shift in drinking occasions towards the home presents opportunities for brands to innovate and cater to new consumer values, routines and occasions. This necessitates beverage companies to balance price, pack and channel mix whilst also reigniting experiential consumption through both physical and digital socialisation occasions.

Food: beyond discounts and promotions

It is not “cheap” food that consumers are after, even in times of financial strain. Therefore, food companies need to go beyond discounts and price promotions and focus on innovating, leveraging technology, and cultivating strategic partnerships to deliver cost-effective products that align with consumer values, encompassing quality, convenience, health, and sustainability.

 

Scope
Key findings
Exploring affordability, value, and the new reality across consumer goods industries
In the new consumer reality, value is more than just a competitive price
Affordability, Value, and the Cost of Living: Beyond price tags in consumer goods
To race or not to race to the bottom
Shein uses AI technology for on-demand design and production
But the cost of living crisis also boosts demand for repairs, resale, quality and durability
Arc’teryx focuses on design durability and circularity
DSW partners with Cobblers Direct in the US while VEJA opens a shoe repair centre in Paris
Ultra-cheap fast fashion is not the only answer to deliver 'value' to consumers
Consumers are after cost-effective and streamlined routines and products
Av è ne: Bridging beauty and health
NAE: Solid beauty box set that emphasises simplicity and sustainability
Clean Beauty at Walmart: Affordable, accessible, and transparent
Effective strategies focus on simplicity and multifunctionality
The focus on affordability is shaping new drinking habits and occasions
Coca-Cola: Promoting affordability through price-package optimisation strategy
Campa Cola: Capitalising on nostalgia and value-seeking Indian consumers
Heineken: Cheers to a good night out, wherever that is
The key to success is to find the right mix
Consumers are uncompromising when it comes to food
Choba Choba: Pushing boundaries to feel (even) better about chocolate
Mastellone Hermanos: Delivering affordability and nostalgic appeal
It’s not all about discounts and promotions
Key takeaways
Navigating the new reality across consumer goods industries: How to win
Evolution of Affordability, Value, and the Cost of Living
Questions we are asking
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