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Accenture Consumer Behavior Research: The value shake-up

Consumers are spending more time at home due to the pandemic, shifting the center of gravity for consumption. This has led many consumers to adapt their homes for working, learning, exercising and socializing remotely. As a result, new opportunities are emerging for consumer goods companies in areas like home improvement, home entertainment and e-commerce. To capitalize on these opportunities, companies need to innovate new products and services for the home, re-evaluate their channel strategies to prioritize local stores, and build more agile operating models and supply chains.

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New epicenters of consumption. New opportunities for consumer goods growth.
2 Consumers’ center of gravity is shifting towards the home Restrictions keep consumers home 1 in 4 consumers have recently, or plan to, renovate their existing home. Half of those currently working from home want to continue doing so at least once a week in the future. Home-based activities become norm Consumers adapt homes to needs Desire to work from home strengthens On average, consumers are spending ~2 hours per day more at home than they were in January 2020. 2/3 plan to socialize at home or virtually in the next 6 months, as discomfort with public places endures. Temporary Permanent
Leisure time now centers on the home, boosting the at-home economy Expected spend intent on routine activities in future Spend intent, including intent to spend more, spend less and difference as net spend intent At-home hobbies is the only activity that has a net positive spend intent for the next 6 months Source: Accenture Wave 10 Consumer Pulse, conducted Feb 25th – Mar 5th -60 -40 -20 0 20 40 -19% -7% -35% 28% -46% At-home hobbies (e.g. baking, gardening) -38% -29% 22% 16% 24% -26% Exercising- at-home Socializing at home -15% 9% 20% -40% Takeaways 19% Home improvements 10% Other non- essential shopping -53% Travel 14% -56% Eating out at restaurants 13% -59% -42% Socializing in bars / pubs / clubs -49% -2% -20% -40% Intent to spend more money Intent to spend less money % At-home activities 3
Consumers are adapting their homes to meet increased demands on their space. Working, relaxing, and making the home a more functional and comfortable place to spend time. 4
“Well, an area which has changed, even in terms of meaning, was my room, which now is the room/space of work. I had to make some changes to it, make it like a mini office and adapt a second screen there for my computer.” Male, 23, Brazil In the next 6 months… 41% are likely to invest in smart home technologies 53% are likely to spend time on home improvement Source: Accenture Wave 9 Consumer Pulse, conducted Nov 26th – Dec 10th Accenture Consumer Video Diaries, Oct 12th – 23rd 5
Many new to working from home have been converted Anticipated future work from home patterns Those that never worked from home before the pandemic 49% 21% 13% 58% 34% 24% 62% 46% 38% WFH at least 1x a month WFH at least a few times a year WFH at least 1x a week March 19th – 25th June 30th – July 5th Feb 25th – March 5th 38% of those who had never worked from home prior to the pandemic want to do so at least once a week in future This rises to 46% for all remote workers Source: Accenture Wave 10 Consumer Pulse, conducted Feb 25th – Mar 5th 6
People are relocating to accommodate more time spent home for work and leisure. 7
19% 1 in 5 plan to relocate, or have recently done so Top reasons to relocate Ranked within the top 1 or top 3reasons for moving 28% 25% 13% 9% 5% 4% 39% 44% 40% 41% 31% 25% To be in a better community For work or study (e.g. new job, shorter commute) No longer need to be as close to my workplace due to working from home more To be closer to family or friends Upsizing now we’re spending more time at home and need more room Upsizing for other reasons (e.g. need more space for dependents) Top 1 Top 3 25% more likely to be renovating than everyone else Employees working from home are… 80% more likely to be relocating Source: Accenture Wave 9 Consumer Pulse, conducted Nov 26th – Dec 10th Note: Not all reasons to locate shown for simplicity 8
$2 trillion is shifting towards the home, creating new epicenters of consumption 9
Source: Accenture Strategy, The Big Value Shift The big shift away from public spaces Changing consumer preferences may cause $2+ trillion of annual value to migrate from public spaces to home-focused industries Where value is at risk Culture & Recreation • Bars and clubs • Restaurants • Sporting events and concerts City center Retailer • Retail stores • Department stores • Consumer products Public transport • Metropolitan transport networks • Air travel Commercial real estate • City center retail property • Restaurants and bars property • Other commercial developers Where value may shift Groceries • Rise in home cooking vs. eating at restaurants Home and digital entertainment • Digital streaming • Family entertainment • Home connectivity Ecommerce & technology • Digital stores and online shopping • Virtual events Home improvements • Tools and materials • Home furnishings • Construction New epicenters of consumption 10
Retail spend with traditional retailers is growing quickest in less urbanized areas YoY growth in retail spending*, excluding Amazon Average March – September 2020 Small Town Metropolitan Rural Suburban “We buy our groceries more often in a local place, for example in a small store that is right in our neighborhood …There it feels a little bit more comfortable to buy groceries than in a big supermarket.” Female, 40, Germany “I’ve used retail stalls…because I’m at home more and need more food all the time.” Male, 21, UK Source: Affinity Solutions Inc, tracking spend by a panel of ~20MM Credit/Debit card holders in the US at zip level. *Retail includes 19 department, discount, drug, pharmacy and grocery stores including Walmart, Target, Kroger, CVS Health, Walgreens and Albertsons. See methodology for full list. N = 493,882,246 total transactions. 6% 15% 7% 5% Retail excl. Amazon 11
Local businesses are also benefitting from community support Likelihood of buying behaviors in the next 6 months Top 2: Highly Likely and Likely Source: Accenture Wave 9 Consumer Pulse, conducted Nov 26th – Dec 10th. Accenture Consumer Video Diaries, Oct 12th – 23rd 58% say their communities are at risk due to economic challenges In response, 68% of these are actively supporting local businesses Community support translates to local consumption 55% 56% 63% Global average Shop in neighborhood stores vs. large chain stores Buy more locally sourced products Shop closer to home vs. retail destinations 12
“I think that people have become more conscious about shopping small <businesses>… I personally will be shopping small for the next five, 10, 15, 20 years… that's something that will be different for me.” Female, 26, USA 13
Remote workers demand convenience at home, creating new occasions to serve. 14
68% of those working from home say that convenience, such as access to food and drink options, is important to them 41% however, struggle to access convenient options Source: Accenture Wave 9 Consumer Pulse, conducted Nov 26th – Dec 10th 15
Consumers browse what’s on offer from local stores, and purchases are fulfilled by their local, trusted shopkeeper free of charge in under 15 minutes. The app has been rolled out in numerous cities across South America. Delivering local convenience through traditional trade Users can order a variety of hotel services from nearby luxury hotels, so that they can feel like a guest in their own home. Services on offer include cleaning and laundry, brunch buffets, romantic dinners, themed celebration dinners, as well as the offer to book a day pass to work from the hotel. Looking beyond the industry for innovative solutions Coca-Cola has launched Wabi – an app for kiosks and other traditional neighbourhood stores to fulfill local orders from consumers. Also from South America comes Room Service LATAM: an app designed to bring hotel experiences into customers homes. Sources: Coca-Cola, AWS and iProUP, and Room Service Latam 16
CPG leaders need to rethink what they sell, through whom and where to drive growth. 17
Linked to broader innovation The home will be a hotspot for value creation, so CPGs need to be actively innovating to meet the new consumption occasions emerging. Success requires real- time insight on local patterns and consumer behaviour that can then be forensically interrogated. Innovation should not just be in products and offerings though, but also in how these can be developed, delivered and deployed profitably at scale. What: Create innovations powered by data Through whom: Re-evaluate priority channels 18
Local stores in residential areas will play an increasingly important role in their communities, and they therefore need to be prioritized as part of a holistic channel strategy. CPGs need to redefine their customer segmentation and service strategy to reflect localized needs and new value potential. The home will be a hotspot for value creation, so CPGs need to be actively innovating to meet the new consumption occasions emerging. Success requires real- time insight on local patterns and consumer behaviour that can then be forensically interrogated. Innovation should not just be in products and offerings though, but also in how these can be developed, delivered and deployed profitably at scale. What: Create innovations powered by data Through whom: Re-evaluate priority channels 19
What: Create innovations powered by data Through whom: Re-evaluate priority channels Where and how: Build agile operating models and supply chains The home will be a hotspot for value creation, so CPGs need to be actively innovating to meet the new consumption occasions emerging. Success requires real- time insight on local patterns and consumer behaviour that can then be forensically interrogated. Innovation should not just be in products and offerings though, but also in how these can be developed, delivered and deployed profitably at scale. Local stores in residential areas will play an increasingly important role in their communities, and they therefore need to be prioritized as part of a holistic channel strategy. CPGs need to redefine their customer segmentation and service strategy to reflect localized needs and new value potential. As new epicenters emerge, CPGs need to follow their consumers. That means advanced modelling to map out the physical redistribution of demand, to identify and prioritize the new areas of growth. CPGs need to create agile operating models – processes, capabilities, teams and culture, that can intelligently flex to accommodate the shifts and unlock new value pools. 20
408 India Indonesia 456 805 811 1,020 Switzerland 815 812 France 802 813 408 430 Australia 813 425 412 409 Sweden 404 1,010 412 1,022 Brazil Canada China 12,487 Germany Ireland Italy Japan Russia Saudi Arabia Spain UAE UK USA Pulse Survey The ninth wave of this survey was conducted from Nov 26th - Dec 10th 2020 and includes 12,487 consumers in 19 markets 15% 19% 21% 22% 17% 6% 70+ 25-31 18-24 32-39 40-55 56 -69 33% 11% 24% 32% Going to Work Not Employed Hybrid Working from Home Age Work Situation Methodology 21
22 Disclaimer: This document refers to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied. This document is intended for general informational purposes only and does not take into account the reader’ specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals. Copyright © 2021 Accenture. All rights reserved. Accenture and its logo are trademarks of Accenture. About Accenture Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, we offer Strategy and Consulting, Interactive, Technology and Operations services — all powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. Our 569,000 people deliver on the promise of technology and human ingenuity every day, serving clients in more than 120 countries. We embrace the power of change to create value and shared success for our clients, people, shareholders, partners and communities. Visit us at www.accenture.com Learn more: Visit www.Accenture.com/consumergoods Contact us: Oliver Wright Consumer Goods Industry Sector Lead Emma Blackburn Consumer Research Lead