We are already seeing Europe’s 500 million strong consumer market being shaped by its youth. Nearly one in three Europeans is under 301 and their annual household spending is forecast to rise to about €50,0002 by 2022.
So how should established firms be adapting products to meet young people’s tastes? And should we expect consumer groupings to converge or fragment according to their preferences? Here are just five things to think about.
- Create experiences
Young people are preferring to buy activities rather than things according to spending data and HSBC consumer surveys. This bias towards experiences is creating what some have dubbed a ‘feeling economy.’
Companies operating in the leisure and hospitality sectors are well placed to benefit from this trend if they can demonstrate creativity. An opportunity also exists for tech and retail industries to capitalise on young consumers’ sense of adventure by improving their experiential offering.
- The end of ‘one size fits all’
Younger European consumers are increasingly attracted to distinctive, craft and locally-produced items rather than mass-produced goods. Even big companies can adapt to this trend, with the French fashion brand Lacoste having successfully introduced an online customisation service for their iconic polo shirt.
Research highlights the potential for companies to produce goods to a consumer’s specifications ‘on demand’ by harnessing the power of new technologies such as 3D printing or ‘additive manufacturing.’3
- Generation Instagram
Young, tech-savvy consumers are comfortable shopping online4 and increasingly buying directly from social media. Seven out of ten Instagram users are under 35 and 80% of users follow a business account5. In the consumer market, an interactive social media presence and authentic engagement is vital.
- Rise of the caring consumer
Forward-thinking companies already understand that being sustainable goes hand-in-hand with being profitable. Consumers – and particularly younger generations – demand transparency in their search for green, ethical products.
The ability to evidence green credentials can’t be the privilege of niche or luxury brands. Mass market retailers must act, and will secure long-term success if they can develop supply chains and products that are both ethical and affordable. H&M is a good example of how fast fashion can be sustainable. In 2012 it launched its Conscious collection made of 100% recycled fibre, and the company aims to use recycled or other sustainably-sourced materials across all lines by 2030.
- Keeping fit
Valued at €26.6 billion, Europe has the largest fitness market in the world6 and HSBC surveys show the majority of younger consumers plan to spend more on sportswear in the future7. Similarly, the EU’s organic food market has grown by nearly 50% in four years to about €30 billion – making it the second biggest after the US8.
The Economist magazine has named 2019 the ‘Year of the Vegan,’ recognising the trend towards healthy eating is here to stay. Firms in the health, food and wellbeing industries are well placed if they can offer products and services which support young Europeans’ aspiration to live well.
1 European Commission, Being young in Europe today
2 ICSC, Global Millennials Industry Sector Series, 2018
3 HSBC, Trade Winds, 2016
4 HSBC Global Research, Future Consumer, 2018
5 71% under 35: https://blog.hootsuite.com/instagram-statistics/
6 Deloitte, European Health and Fitness Report, 2018
7 HSBC Global Research, Who cares wins, February 2019
8 European Parliament, The EU’s organic food market, 2018