Ernst & Young Consumer Trends Report

Ernst & Young’s Consumer Trends Center has published its “2005 consumer Trends Report” on the current consumer landscape. According to the report, “mass customization” is just one of several terms essential to understanding the current consumer experience in the United States.

The U.S. consumer landscape these days encompasses all the socio-geological possibilities of the continent. The Ernst & Young consumer report starts off by categorizing consumers as people who are faced with perceptibly less time, less disposable income, and less optimism about “meeting commitments” than they used to have. Much of the working population is reacting by choosing to spend its money on products and services that seem to save them time or, less predictably, by consuming goods and services that make them feel better.

Understanding these sorts of trends is critical for marketers, since, as the report points out, “60% to 70% of what Americans buy is discretionary, and about two-thirds of their purchases are unplanned.” Add to this rather startling characteristic the fact that the demography of the United States is changing, ethnic barriers are shifting and eroding, family structures are shifting dynamically, and consumers are looking to peers for their identities. The great demographic curve of 77 million Baby Boomers will reach retirement age over the next 20 years, with repercussions that have yet to be understood. Patterns of inheritance, longevity, and rising medical costs for the parents of boomers may serve to curb spending for that generation. Young adults (those 18–24) face more difficulty getting and staying employed, and many are coping with that by incurring more and more debt, especially credit card debt, which the report pegs at an average of over $2,000 per month for this group.

And food is no longer just sustenance, it has become “a source of peril.” Market opportunities abound in the form of fortified foods, “smaller, healthier portions” of processed, precooked food that, as the report points out, “should yield higher margins.” A trend toward eating defensively is bolstered by consumers’ willingness to rely on “curated consumption,” with “experts” telling them what and how to eat—or to dress, buy, or think, for that matter. In fact many of the consumers described by the report—increasingly “networked,” nonlinear, easily bored, and needing to feel pampered—sound rather, well, immature.

Still, the job of the retailer is to understand the market, not to criticize it. One of the ways retailers can approach the changing marketplace described by the E&Y report is to use such technologies as CRM, marketing to highly age-specific groups, and keeping a weather eye on consumer trends. The ultimate utility of labor-saving devices appears to have been freeing up consumers to work longer hours, and now, according to the report, “Time is the ultimate luxury.”

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