Brands across the FMCG space are experiencing new challenges and opportunities relative to regional and generational shifts in consumer attitudes regarding value for money. Although the effects of the cost-of-living crisis have lessened in many countries, many values and behaviors arising from it have stuck. The crisis has resulted in a shift in consumer preferences toward cheaper homecare and personal care products, posing new challenges for premium brands in the space, according to a new report by GlobalData, a leading data and analytics company.
GlobalData’s latest report “Evolving Consumer Attitudes and Behaviors: Q1 2024” reveals that the perceptions of Gen X and Boomers around ‘good value for money’ for health, hygiene, toiletries, and household products have seen the biggest changes in the period from 2021 to 2024, suggesting that the spending priorities of older consumers are the most sensitive to the rising cost of living.
Chris Rowland, Consumer Analyst at GlobalData, comments: “The effects of the cost-of-living crisis were deep and far-reaching, with numerous aspects of everyday life such as groceries, energy, and fuel, becoming more expensive globally. Brands also continue to face difficulties with rising costs since their ability to pass them on to consumers through price hikes has diminished. Consumers are now increasingly considering lower price options as better value for money relative to high-quality.”
Surveys conducted by GlobalData from Q1 2021 to Q1 2024 for healthcare, hygiene, and toiletry products showed considerable year-on-year rises in positive associations between low price and good value for money — 11% and 14% among Gen X and Boomers, respectively.
Positive changes around low price was also observed for household care and laundry products — 10% and 14% for Gen X and Boomers respectively*.
Rowland continues: “Several household care brands such as The Pink Stuff have closely aligned with these shifting perceptions among older consumers, with cheap but effective products, which are often showcased through short videos on social media platforms, including toilet cleaners and cleaning pastes for one to two pounds.”
Value ranges have been a popular strategy for FMCG brands. The UK retailer, Iceland, extended its affordable range by launching 50 new one-pound products, including various homecare and personal care products, featuring household names like Fairy and Radox.
In 2022, some regions saw record levels of inflation, resulting in shifting spending priorities towards cheaper products. Brands must tailor strategies to target different consumer groups. For older consumers, high value for money credentials should be prioritized over eccentric marketing, such as multi-functional products sold at affordable rates.
Younger consumers such as Gen Z are more receptive to influencers and social media content, so brands would be better off creating short-form video content, which may include “how to” videos or a general showcasing of product functionalities.
Rowland concludes: “A clear price point architecture, including affordable ranges for household and personal care brands, is crucial to align with new consumer perceptions around value for money. This will ensure that a wide range of consumer preferences are catered to.
“Private label brands stand to benefit most from these developments and are increasingly sought by consumers. They should be viewed as a value for money benchmark, while other brands should consider where they can reduce unit costs, whether by incorporating more simple branding or prioritizing high efficacy ingredients over non-essentials like luxury scents.”
