Rising costs and inflation are a hot topic right now, but what are the overall trends being seen in consumer choices in the long term?
Heather Thomson is the executive director at the Alberta School of Business Centre for Cities and Communities and she spoke at the Ag Awareness Summit at Saskatoon last week.
Thomson says that tools and technology influence consumption decisions in our day-to-day lives. Examples of tools and technology that influence food consumption decisions include smart fridges, smart home devices, such as Google Home and Amazon Alexa, smart carts, and even QR codes on grocery shelves and labels to put information at consumer’s finger tips. Thomson says that during the pandemic there was a breakdown of the binary trends of online and in-person shopping choices and now we are seeing digital influence in stores.
Thomson says that for the majority of human history most people were concerned about money management and made evaluations based on lowest cost, this is value-driven consumption, but now we are seeing a rise in purpose-driven consumption. Purpose-driven consumers care about experience and aesthetics; without a good experience, these consumers will just shop online. Purpose-driven consumption does not mean individuals are not concerned with cost, but they are not driven by the financial savings to make purchase decisions, she says.
How do these trend changes fit in with rising costs and a looming recession? Thomson says consumers adjust accordingly. She provides coffee as an example. Value-driven consumers will buy in bulk, while purpose-driven consumers are more likely to go out for coffee for the experience. When financial times are tough purpose-driven consumers will adjust to financial challenges by going to get coffee less instead of changing the habit to always make at home.
Thomson says that what we’re experiencing now are short-term circumstances. If we were to hit a ten year depression or experience a war or other long-term financial hardship it would fundamentally change these choice trends, but the normal cycle of rising costs and inflation does not change the overall consumption trends.