The focus on the quality of daily consumables has risen steeply in Germany since 2006. The engine of this trend, in particular, is the younger generation of consumers, which exhibits the added peculiarity that, driven by a compulsion to continuously lay bare every aspect of their lives in public, in the private sphere, by way of compensation, this group is searching for authenticity. Why? And what impact are the challenges posed by this era having on consumer attitudes?
To find out, it is worth first taking a closer look at the generations whose lifestyle realities and consumer habits are compared and contrasted below. The “reconstruction” generation of the post-war years is compared with the “affluent” generation of baby boomers born during the years of economic upswing in the 50s to mid-60s. They are followed by “Generation X“, who were born between 1967 and 1981 at a time when the cult of the individual was beginning. By contrast with the affluent generation, this generation has and still is experiencing some tension between the opportunities and risks associated with the potential for choice and the uncertainty surrounding this, which is why this group is sometimes known as the “insecure” generation. The “flexible“ generation is the youngest generation included in the survey. Born after 1981, this is a generation of people growing up during a period of constant high unemployment, and entering the job market around the millennium at a time requiring an increasing degree of flexibility. This is illustrated, for example, by the rising figures of temporary agency staff. Because it exhibits a series of peculiarities in its consumer habits, the deliberations below focus on this generation.
Compared with the other three groups, for some years now, the trend in the younger, flexible generation when buying daily consumables has been towards freshness, natural products and regionality. At the same time, the trend towards convenience has distinctly fallen. These are the findings of the ConsumerScan representative GfK household panel, which surveys the purchases of daily consumables of 30,000 German households on a continuous basis and reconciles the results with socio-demographic factors, such as age, place of residence or size of household. Analysis of the data shows that between 2006 and 2011, the flexible generation demand for freshness and local products rose by more than 10 percentage points. At the same time, the desire for ready meals and convenience products making cooking easier (classic convenience orientation) declined in virtually the same measure. Although the trend is reiterated in other generations, it is significantly less pronounced there. However, in the oldest generation, that is, the reconstruction generation, the demand for convenience products has even risen.
Nevertheless, the downturn in convenience orientation in younger consumers still offers producers and retailers potential opportunities, if they are successful in making convenience products fresher, more natural and more local. Although younger, flexible consumers want more natural products, at the same time, they have less time to prepare natural products themselves. Some producers have already identified the inherent opportunity this offers and positioned their ready-to-eat products in such a way as to give them a “fresh” context.
It is to be assumed, that those preferring healthy, natural and regional products are becoming more aware of quality and less sensitive to price. In actual fact, the trend towards this is disproportionately high in the flexible generation, making the more expensive quality brands, rather than the lower cost brands, more attractive. Analysis of the responses to the statement: “Even if it’s more expensive, I still prefer to buy a well-known brand, because I can be sure of the quality“ confirms: while in 2006, just under 15% of flexible young consumers agreed, by 2011, this figure had risen to a good 25%. An increased approval rating was also recorded in both middle generations.
How does this change in preferences impact on purchasing habits? Here, it is helpful to look at the GfK Brand shopper types, which categorize households into premium, brand, promotion and own-label shoppers according to their actual purchasing habits. A comparison of generation-specific changes taking place between 2006 and 2011 indicates that in the flexible generation, the proportion of premium shoppers has risen by 5 percentage points, whereas by contrast, only the insecure generation signals a rise, although a far lower one.
However, the flexible generation trend towards the more costly brand products welcomed by the manufacturers is partially offset by an even higher upturn in shoppers preferring to buy items on special offer promotions: compared with 2006, the proportion of these shopper types has risen by seven percentage points. Although the young generation wants brand products, many of them are still on the first rung of their career ladder and consequently, have a limited budget and so have to keep a close watch on the costs. Buying goods on special offer is the logical outcome of individualized wishes coupled with monetary restrictions.
Moreover, not only premium goods, but own-label brands are also increasingly important to the young, flexible generation….but only, if their offer value added. In this group, low-cost retail brands lose out. The importance of the discount stores is also in decline in the context of the general trend, so that in the period 2007 to 2012, their share of the market dropped by 1.2 percentage points in the young generation, while in all the other age groups, especially in the reconstruction generation, market shares have risen.
How can producers and retailers respond adequately to the trend? Primarily, by clearly focusing on the degree to which lifestyle influences consumer habits and attitudes. The young, flexible generation is the first not to hold out any great hope of continuous employment where working lives are concerned, but is aware that it will have to cope with constant disruptions. Living like this saps the energy: those who need to cultivate permanent flexibility, where self-promotion is the critical factor for career success, need to counter balance this in their private lives. In consumers, this balance expresses itself in the demand for quality, freshness and natural products. However, anyone believing that the young, flexible generation simply wants a return to the “good old-fashioned values” of their grandparents is sadly mistaken. The compulsion to live life in the public arena is unlikely to decline in the future, and so by way of compensation, what the young, flexible generation wants from producers and retailers above all is authenticity. And this helps to mitigate the tension between baring all in public and the desire for private authenticity.
Data source: GfK Consumer Scan, July 2012.
If you have any queries about this article please contact Dr. Robert Kecskes, GfK SE.
For any further queries regarding GfK Compact, please contact Claudia Gaspar, e-mail: email@example.com.