William Higham, Consumer Futurist and CEO of the Next Big Thing, delivers his conclusions to Barclays' 10 years of spend report.
A rollercoaster decade
The last decade has been extremely volatile for businesses, government and consumers. Britons have lived through Brexit, lockdowns, a cost-of-living crisis, mortgage rate rises and geopolitically driven price and availability issues. They’ve seen the rise of direct-to-door, working from home, social media, competitive leisure and generative artificial intelligence.
The 'Barclays 10 years of Spend' report offers a fascinating glimpse into the response to this rollercoaster decade. Businesses have invested in technologies that deliver convenience while prioritising ‘human’ relationships. Consumers have responded to political and social volatility by mixing self-reliance and self-care with stronger community and ethical ties. And households have managed economic uncertainty via savvy budgeting.
Future spending
So how might spending patterns evolve? There is little sign that tomorrow will be any more certain than today.
As communications, business and travel connect the world more closely, the speed at which unexpected economic or political events escalate will rise, impacting the rest of the world faster than ever. The new geopolitical order looks set to drive further political uncertainty. New border conflicts are appearing across markets, heightening economic instability, impacting supply chains and increasing costs. The growing influence of social media means attitudes will fluctuate faster and more radically. There is little sign that declining trust in institutions will reverse.
What impact might all this have on future spending trends? As a rule, people only change their attitudes and behaviours if their circumstances or environment change. For instance, Britons didn't randomly decide to recycle. They started doing so because of a drip-feed of different factors, from peer pressure to government education campaigns. It’s like being in a wind tunnel: we might want to stay still but the driving winds of change will push us in unexpected directions.
Consolidation
Many of the trends identified in this report were consumer responses to instability. Further instability with catalyse these trends.
It’s often assumed that in uncertain times, consumers will focus more on practical spending. In fact, they frequently prioritise values and spend emotionally. When facing volatility, values act as their North Star. Relaxation and wellness will remain an important way to stave off anxiety.
Anxious consumers will look to their peers for financial and/or emotional support, and will continue to prioritise experiences with those they care about over material possessions. The latter might occasionally deliver resale value, but their greatest value will be sentimental. Budgeting will become an even greater priority, but not at the expense of lifestyle choice or self-care. As a result, we’ll see more Seesaw Spending: consumers cutting costs where possible to enable them to spend more on the things that matter to them.
New trends
New trends typically develop out of those already identified. Peer support will expand. We’ll encounter more consumer to consumer sharing: via combined household grids, local ‘libraries of things’, and peer-to-peer networks. Rising housing costs and a growing demand for closer social ties will drive home sharing too. There’s likely to be growth in co-living spaces, three-generation households, and flat shares among older, higher income segments.
Unsure consumers will want to feel prepared for any eventuality: increasing spend on a range of services from insurance products to reskilling courses. Meanwhile AI will improve personalisation, boosting expectations around identity, individuality and consumer power.
Consumer focus
Businesses will need to accept instability as the ‘new normal’ and anticipate its impact on consumer attitudes and spending. Instead of fighting uncertainty, smart companies will embrace it and seek out the best ways to respond. To appeal to tomorrow’s consumers, organisations will need to employ what I call the AIR Qualities: Agility, Integrity and Resilience. Success will come to those best able to: adapt to shifting attitudes; maintain a positive vision that consumers can share with them; and prepare to withstand or exploit whatever the world throws their way.
New spending trends can offer new business challenges. But savvy companies know they also offer many more opportunities.