After the pandemic and in the midst of multiple crises, consumption trends in Italy are changing under the banner of saving but also seeking new experiences and preferences. The picture comes from the 2023 report ‘A Year of Trends,’ produced by GS1 Italy, which brings together a thoughtful summary of the content that has appeared over twelve months in its web magazine Tendenze online.
The weight of the long crisis
Among the key themes of 2022, several intercept consumer behaviors, which come from ‘extraordinary times.’ In fact, after the pandemic, the aftermath of the war in Ukraine, the energy price storm, and rising prices hit the economy.
The run-up in inflation — as of October 2022, the general acquired inflation is +8 percent, but the consumer price index is close to 12 percent — sets Italy back 40 years, and the average loss of household purchasing power is estimated at 2,300 euros.
The Italy of 2022 turns out to be an increasingly vulnerable country, with a struggling middle class and a sharp increase in real poverty. On the other side of the post-pandemic is the growth of the luxury market (36 percent increase in the wealth owned by the few but representative Paperoni of Italy). In Italy, wealth is polarized by rigid wages and the growth of absolute poverty.
The consumer waives, reduces and postpones
A first major trend is the triple-r of ‘give up, reduce, postpone.’
‘Faced with the onslaught of inflation, the strategies put in place by the consumer involve a spending review of nonessential goods, which, however, also becomes a new way of understanding consumption, more flexible, more variable, more distinctive, more fragmented and contradictory. With some non-negotiable benchmarks-the pursuit of convenience, interchangeability of purchasing channels, shared values-so much so that new qualitative and quantitative analysis tools are needed’.
‘Coming out of the pandemic and catapulted into a context of war, consumers face the new crisis seeking security, reassurance and help in understanding what is happening, but ready to react quickly by reviewing their purchasing behaviors and spending priorities.’
From the storm of these years then comes a consumer who is more thoughtful, more planner and less impulsive, so much so that 3 million Italians who buy on the spur of the moment have dropped by 3 million in 6 months. Concerned about the cost of living, he decides to waste less, is careful about the energy efficiency of what he buys (in tech in particular), and loves promotions.
New basics
of consumption, the report states, are price, security and simplicity.
Addictions grow
Difficulties increase addictions. ‘Betting, consumption of alcohol, psychotropic drugs and drugs are on the rise. There is an escalation of excesses in which the area of possible pathologies such as
- alcohol consumption, 11 percent from 3 percent in 2019,
- betting and gaming, from 4 percent to 11 percent),
- the use of psychotropic drugs, which almost quintuples (from 2% to 9%),
- drug use (2% to 8%)’.
Eating disorders are increasing, especially in the most frail people.
Consumption trends in Italy, many give up
The way we consume will never be the same again, says 57 percent of Italians (an increase of 7 percent in one year). Italians feel poorer and give up more, especially on energy and in groceries, and look more for products on promotion.
With a personal ‘spending review,’ they put off not only big expenses, such as buying a house, but also everyday superfluities (bars and restaurants, clothing and entertainment). They postpone travel and vacations and postpone technology purchases.
For the first time, however, compared to other economic crises, food is untouched by a spending review. 24.5 million Italians, despite rising prices, ‘are unwilling to compromise in their food choices and in the months ahead plan to decrease the quantity but not the quality of their food.’ This is mostly more basic food, while MDD (Private Label) continues its advance, with a market share approaching 30 percent by 2022 (and brands are expendable).
Savings and new consumption styles
The emergency exit of Italians is savings. 68% are already adopting savings strategies, 85% of households are saving or say they will do so soon.
To cope with rising prices, several strategies are implemented:
- Waste reduction (57% of respondents),
- Elimination of certain categories of products/services in purchasing choices (52%),
- foregoing the purchase of unnecessary products and services (52%),
- contracts the quantity of products usually purchased (21 percent),
- Deferral of planned expenditures (26%).
New research on consumption trends in Italy
Consumer behaviors change rapidly. To understand them, the foundational research ‘Nuovo Codice Consumi’, carried out by GS1 Italy in collaboration with Ipsos and McKinsey & Company, begins, with the aim of thoroughly understanding the buying behaviors of Italians today and envisioning possible directions of evolution to 2030.
Six key thematic areas are identified that explain the relationship between Italians and consumption:
- Emotionality of products and brands,
- Consumer experience innovation,
- Omnichannelality and shopping experience,
- Care for the environment and the person,
- Territoriality,
- Convenience and thrift.
New paradigms in consumer behavior are emerging, characterized by several elements:
- thrift orientation, which is saving and goal in itself and a way of being in consumption,
- need for experiences in the buying process and 24-hour store availability through multichannel,
- push for sustainability,
- Metropolitan styles expanding to the province.
These are dynamics accelerated by pandemic, inflation, and fear of the consequences of the war in Ukraine.
The role of the Distributor Brand
This also includes the role of Private Label, which has built a close relationship with consumers.
Amid the general uncertainty, ‘the Private Label provides a lifeline for many Italian families to make their grocery bills come back’.
The choice of MDD is not only motivated by savings. It is associated with additional values: enhancement of territoriality and local products; attention to the demand for wholesomeness and sustainability; and promotion of ethical behavior along the supply chain.
The most relevant drivers for purchasing an MDD product are.
- The greater affordability compared to big brands (42 percent),
- offers and promotions (33%),
- good products to eat (29%),
- Good assortment of products( 28%),
- Items referring to product quality.
Non-food, hunt for convenience
In the non-food sector, ‘some trends that have already emerged are being consolidated, such as the constant dialectic between digital and physical stores (with the latter on the upswing) in the variability of shopping behavior and the focus on the search for convenience by consumers who are increasingly careful not to succumb to the grip of inflation.’
Clothing and footwear, consumer electronics, furniture, optics, perfumery and sporting goods are affected by the post-pandemic not only in terms of consumption recovery but also in terms of purchasing channels.
The role of the digital channel
‘During the pandemic, Italians increasingly learned to use new digital technologies even for shopping, a trend that has been confirmed and evolved in 2021.
Compared to preCovid-19, 30 percent of consumers say they have adopted new purchasing behaviors, particularly by resorting to web-based shopping’.
About a third of consumers took advantage of more flexible purchasing and delivery modes, such as remote (pc or phone) orders with in-store pickup or in-store orders with home delivery. Digital channels are present throughout the consumer purchase journey, they make consumers discover brands, and they are also important as marketing channels.
The savings gymkhana
In nonfood, worried about uncertainty and price increases, consumers are playing defense: reducing purchases or postponing them, as 50-70% of respondents say they do.
The search for savings induces people to compare prices in stores, online channels, and e-commerce sites, based on offers and promotions.
Shoppingpatterns are also changing. ‘Among those who have changed their habits, 65 percent go to stores less often, 31.2 percent arrange to spend less time there (including taking advantage of shopping drive or pick-up services), and 26.4 percent choose less crowded days.‘
E-commerce in Italy
E-commerce in Italy is coming of age. In 2022, the value of online purchases (products plus services) worldwide is estimated to continue to grow and reach about 4.5 trillion euros (up 15 percent from 2021). In Italy in 2022, online purchases are projected to be worth 48.1 billion euros (up 20 percent from 2021) with a slowdown in product purchase growth.
The numbers of e-commerce in Italy well describe the trends of ‘digital’ consumption:
- the audience of e-shoppers reached 33.3 million people, ten million more than pre-Covid,
- average monthly deliveries of products bought online are estimated at 31.5 million,
- are 57.2 percent share of online shoppers who made purchases via app on a mobile device in the past six months,
- For every 100 online purchases, half (50.1) come from smartphones;
- the average value of Italians’ online purchases in 2022 is estimated at 4,700 million euros.
Multichannel shopping
Consumers are following a multichannel purchasing mode; they will not turn back from this change. One-third of in-store shoppers also shop on the online sites of the same brands.
Live streaming commerce, on the other hand, is still in its early stages, ‘a new way of offering products that has exploded in the East, particularly in China, and arrived in Italy during the pandemic, which allows a store, manufacturer, or private individual to stream a product and sell it as they do on some specialized TV channels, with a direct relationship with the buyer who can ask questions during the live presentation’.
51.8 percent of online Italians are aware of the phenomenon, 11 percent have attended an event and bought, and 6.9 percent have attended an event without making a purchase.
It is also moving toward new modes of interaction. 72% of consumers are willing to buy a brand that reflects their values (consumers thus expect companies to lead change). With some paradox in the pursuit of sustainability as well. In fact, 65 percent of consumers want to buy sustainable products but only 26 percent actually do so.
Sabrina Bergamini
Notes
A Year of Trends 2023. GS1 Italy. https://gs1it.org/content/public/6d/d9/6dd965dc-b889-4a5b-9885-8171be2787cc/un_anno_di_tendenze_2023.pdf
Journalist. Consumption, rights, nutrition, social, environment. Head of Consumers Help. She collaborated with ResetDOC, Il Riformista, La Nuova Ecologia, IMGPress.
