NielsenIQ (NIQ), the world's leading consumer intelligence company, has released its highly anticipated Mid-Year Consumer Outlook: Guide to 2025, identifying macroeconomic catalysts across industries. The forward-looking study concluded that consumers remain determined and resilient despite uncertaintyThis provides a strategic roadmap for retailers looking to win over consumers in the next 12 to 18 months and beyond.
The report anticipates that global consumers will spend $3.2 trillion more in 2025, representing a growth of nearly 6 % compared to 2024, according to World Data Lab.
With the global economy facing ongoing and unprecedented challenges, understanding consumer behaviour has become mission critical for companies seeking to thrive in an ever-evolving landscape. NIQ's bi-annual survey provides a comprehensive analysis of the impact of economic events and trends on consumer confidence, changes in consumer attitudes and important insights into the factors that influence purchasing decisions. The report also explores regional variations and provides an in-depth analysis of the unique dynamics of Asia Pacific, Europe, North America, the Middle East and Latin America.
With the looming uncertainty around geopolitical crises, economic stability and environmental health, consumers are becoming resilient and are spending where it matters most. This demonstrates a decided shift from cautious to intentional consumption, with a focus on a sense of prosperity and well-being.
"There is a growing demand for AI-driven insights based on large amounts of granular data that only NIQ can deliver," said Tracey Massey, chief operating officer of NIQ. "Being aware of current and expected consumer behaviour that compares globally is now a safe bet to establish and maintain any competitive advantage."
Global catalysts for change in 2025:
AI readiness: 40 % of consumers would accept a product recommendation from their AI assistant, and 40 % would leverage AI to automate and accelerate their everyday purchasing decisions, so it is essential that companies assess which AI advances will appeal to consumers and provide options to support older consumers.
The rise and impact of GLP-1 medicines: 31 % of global consumers are likely to use a medicine or drug to help them lose weight, but GLP-1 medicines will generate a broad scope of impact by inspiring new sources of spending, influencing consumer lifestyles and shaping interpersonal behavioural norms.
Omni-channel evolution: The social commerce revolution has led to the evolution of omni-channel, with an 11.6 % increase in online sales performance globally and the rise of gamification, with 36 % of consumers saying they would spend more on a purchase because of an in-app experience.
Cost of trendy commodities: 60 % of respondents said they will buy fewer snacks and confectionery products if prices continue to rise or remain high over the next three months, the highest "drop out" response across all categories surveyed. Cocoa (+128 %), coffee (+43 %) and milk (+44 %) are "hot commodities", as measured by Trading Economics, and rising prices affect the volume of sales of related categories/products.
Key trends framing expected spending by 2025:
Consumers' main concern remains rising food prices. (33 %), followed by rising utility costs (20 %) and the threat of economic recession (19 %). Climate change ranks fourth (14 %), due to the numerous extreme weather events around the world.
A majority (67 %) of consumers surveyed worldwide say they are likely to switch or try a new brand because of lower prices.
They intend to continue cutting non-essential expenditures such as meals away from home (OOH) (38%), entertainment away from home (37%) and take-away food delivery (36%). Spending on OOH activities is expected to decline, while intentional choices around home entertainment (48%) and spending on socialising/meetings (46%) are likely to be maintained in 2025.
In the meantime, interest in private label products continues to rise, with 50% of consumers buying more private label products than ever before. In addition, 40% of global consumers say they would switch to a private label product they like, even if it costs more.
North American consumers are most concerned about rising housing costs, while global conflict is a major concern for Africa, the Middle East and Europe.
The pace of monthly consumer packaged goods (CPG) inflation continues to decelerate in all countries, to a year-on-year growth of less than 21GDP3T. At the regional level, CPG inflation is also trending downwards, but remains higher than average in Latin America and Africa. Overall monthly prices have risen fastest in Latin America, which has experienced year-on-year growth of up to 9%.
Upsell opportunities: Intentional consumers are willing to pay a premium for worthwhile attributes. In technology and durable goods, unit sales of premium-priced smartphones and mobiles increased by 17 % in 2023 compared to 2019, compared to budget options, which declined by 32 % over the same period.
"In the last six months, there has been a decided shift from cautious to intentional consumption habits. Consumers are willing to spend more, but are still aware of the potential changes".said Lauren Fernandes, NIQ's vice president of global thought leadership. "Consumers are looking for value in every purchase in multiple ways. They are allocating their spending very deliberately and expect to leverage any excess strategically in 2025 and beyond"..
NIQ's Mid-Year Consumer Outlook: Roadmap to 2025 provides key insights for companies to navigate trends and strategically plan for sustainable growth. The report highlights a significant shift in consumer behaviour: from cautious to intentional consumption.
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