Consumers remain wary about the impact of new technologies
Consumers can have paradoxical relationships with new technologies. They can become highly reliant on a tool, while also worrying about its risks to their mental and financial wellbeing.
For example, people take the constant connectivity of their mobile devices for granted, yet they increasingly want to turn off alerts and reminders because they find that persistent connectivity overwhelming.
Familiarity alone does not build trust. While artificial intelligence (AI), for example, is becoming a normal part of brand engagement for many consumers, a significant proportion are worried about how it might be used, with 24% of respondents concerned it may completely replace their role. And people who use AI in the workplace are more worried about its impact on their life outside work.
A chart showing the concerns and expectations of managers and professionals about AI, and that those who use AI in their job to generate content have stronger views. For example, 49% of managers and professionals who use AI to generate content are concerned that the products and services they get exposed to are restricted, compared with 28% of those who don’t use it.
The availability and accessibility of digital innovation is growing, but trust in technology and its usage of personal data is not. Across each wave of the Index, we’ve seen no significant change in the willingness of consumers to share data with companies or brands. Consumers remain wary:
- 55% are very concerned about ID theft and fraud.
- 53% are very concerned about data security/breaches.
- 53% are very concerned about companies selling their personal information to a third party.
They want to weigh the benefits of sharing data against the risks and the value they receive in exchange.
Innovations in technology must give consumers tangible benefits
Companies are rushing to build data repositories they can mine for insights; consumers are increasingly aware that their data is prized. They expect more in return for sharing it, such as access to better deals. How companies balance this exchange is an important part of consumer engagement.
Companies are using technology and data to protect razor-thin margins and market share. They need to tread carefully, as consumers are already turning toward value, experimenting with new brands and re-evaluating what’s essential. If they feel that participating in new technologies doesn’t benefit them, the business won’t just lose their custom now — it could experience irreparable damage to the kind of consumer relationships that long-term success requires.
This latest wave of the Index shows that the high levels of trust consumers had in many companies after the pandemic are steadily falling. Retailers and consumer products companies have many more interactions with consumers than most companies, which is an opportunity to build trust or to damage it, if the consumer’s needs and context are not considered.
A chart showing how trust in retailers and consumer products companies has declined over time. For example, trust in supermarkets and grocery stores was 79% in February 2021 but was 72% in April 2023.
Technology will fundamentally change how people live and work
The rapid pace of technological change is going to transform the way people live and work, and will redefine the future consumer. Small, seemingly unconnected changes in many areas can result in sudden unexpected shifts in behaviors and attitudes. And new technologies can slowly insinuate themselves into a consumer’s daily life before anyone realizes.
Half of the consumers in our Index say they work for companies that are taking on large technology projects designed to create more value for investors, employees and consumers. One of the most significant drivers of change is AI, which will revolutionize the consumer experience, with new products and services, novel ways of accessing them, and entirely new modes of living and working on the horizon.
We’ve developed over 200 drivers of change and explored their possible impact on every aspect of the future consumer’s world — from how they might shop, play and stay healthy to how they will consume, work, move, and use technology. Using them we can point to how AI could impact and shape multiple aspects of consumer life and business activity.
An interactive chart showing how AI will impact multiple aspects of consumer life and business activity using relevant drivers of change from the EY bank of over 200 Drivers of change. For consumer lives, they include the products available to consumers, how they access them and how they live and work. For retailers and consumer products companies they include how you run your business operations, the products and services your business offers and how they engage with consumers.
Engaging with consumers to earn respect, give value and build trust
Consumers are retrenching and revisiting their values to address their affordability concerns. Companies must meet these short-term needs but can’t afford to lose sight of the bigger picture. Technology will reshape consumer behavior in the future, and businesses must create value propositions that will remain compelling.
1. Do your consumers fully understand the value of your brand or product? Is it what they want?
For retailers and consumer products companies, this is a pivotal opportunity to be part of people’s lives like never before. But it’s important to offer benefits they value. For example, can you offer invisible, time-saving convenience? Do you solve their problems in ways that make you indispensable? Are you creating experiences that are satisfying, rewarding and differentiated? Is technology helping you deliver the ideal mix of these three components?
2. What are you doing to build consumer trust in your products and touchpoints? How do you know if it’s working?
Trust is about giving value for money, keeping data safe, behaving in line with corporate values that the consumer shares, taking an ethical approach and being authentic among many other critical issues. If you become part of the consumer’s inner circle of trusted brands, you can benefit from a much deeper and wider relationship with them. But at a time when trust in companies is eroding, relationships like this are hard to build and easy to break. With new channels proliferating, consumer-facing companies are in near constant contact with consumers, so they have lots of opportunities to get this right, and as many to get it wrong.
3. How are you adapting your strategy to shape the technology-driven revolution in customer engagement? What are you prioritizing?
Continuing innovation is going to transform the propositions available to consumers, how they access them, and how they live and work. In response, companies will need to evolve the products and services they offer, their business operations, and how they engage the consumer. Businesses also need to identify, implement and integrate technologies that are right today and for the future. This is complex, but the goals are clear: Build trust with the consumer, earn their respect, and give them value they appreciate.
The EY Future Consumer Index tracks changing consumer sentiment and behaviors across time horizons and global markets, identifying the new consumer segments that are emerging. The Index provides regular longitudinal indicators and a unique perspective on which changes are temporary reactions to a current disruption and which point to more fundamental shifts. The 12th edition of the EY Future Consumer Index surveyed 21,000 respondents across the US, Canada, Mexico, Brazil, Argentina, Chile, UK, Germany, France, Italy, Spain, Denmark, Finland, Sweden, Norway, Australia, New Zealand, Japan, China, India, Indonesia, Thailand, Saudi Arabia, South Africa, Vietnam, Nigeria and the Netherlands between 16 March to 14 April 2023.
Consumer-facing companies need to innovate in ways that build consumer trust, respect their concerns, and give them value. Those that get this right will perform better now and position themselves for a future in which technology will transform the way people consume, work and live, and the opportunities for companies to engage them.