One of the key issues that our The Global Consumer 19 report in partnership with Retail Week looks at is what capacity consumers have to spend this year.
To determine how likely consumers are to spend money in 2019, we interviewed 10,000 consumers globally from 10 key retail markets to determine how much disposable income they have.
Half of Chinese consumers have less than CNY2,500 (£281) of disposable income to spend per month. The tightest budgets are found in the 18 to 25 age bracket, with 30% having less than CNY250 (£28), while 35- to 44-year-olds have the greatest spending power, with 26% having more than CNY5,000 (£562) to spend.
French consumers have less than €280 (£250) of their monthly disposable income left after essentials. Here, 18- to 24-year-olds are the most squeezed, with 41% having less than €110 (£98) to spend. Meanwhile, 10% of 45- to 54-year-olds have more than €1,125 (£1,003).
Germans have the biggest spending power in Europe, with 38% having a monthly disposable income after essentials of €560 (£495) or more. Disposable incomes are fairly similar across age groups, until you reach the highest earners, where 21% of 35- to 44-year-olds have a monthly budget of €1,125 (£994) or more, versus just 10% of 18- to 24-year-olds.
Some 82% of Kenyans have less than KES10,000 (£77) of disposable income afer essentials.
Some 58% of shoppers in the ROI have less than €280 (£247) of disposable income after essentials each month.Those aged over 55 have the tightest budgets, with 37% having less than €110 (£97) per month, while those aged between 25 and 44 have the greatest spending power.
Some 54% of UAE shoppers have less than AED1,190 (£252) of disposable income after essentials. Here, consumers aged between 35 and 54 have the greatest spending power, with 20% in this age bracket having more than AED4,770 (£1,009).
Some 61% of respondents have less than £250 per month of disposable income after essentials. Those aged over 55 are the most polarised, with 43% having less than £100 per month and 20% having at least £250-£500 after essentials. Those aged 35 to 44 have the greatest spending power, with 31% having £250-£500 after essentials.
One global trend that emerges quite clearly here is that – contrary to the current market focus on Generation Z – consumers aged between 35 and 54 have the greatest spending power. Interestingly, those aged over 55, who often tend to be asset-rich but cash-flow poor, are feeling the pinch.
It is equally important to take the amount of debt that the consumers are facing into consideration. Our debt calculator looks at the percentage of consumers reliant on debt (such as credit cards, personal loans etc, not mortgages) to pay their monthly bills:
Things to consider
With limited disposable income, targeting of ads and promotional activity takes on even more significance. Behavioural or differential pricing based on personal circumstances is becoming the norm for insurance and to an extent travel purchases, and we are used to ads being based on browsing habits, but what is next? We believe a totally personalised shopping experience is the next big step in advertising, but the opportunity brings risk and retailers will have to take care to ensure they have got necessary permissions and data in place.
With consumer, media and government scrutiny at an all-time high, no retailer can afford to cut corners. While it is right to consider how to deliver your business strategy as efficiently as possible, this should not come at the cost of regulatory or reputational risk, particularly when in many countries regulatory penalties are at an all-time high.
Consumer confidence will also have an impact on spending in 2019. Find out more here.
About the research
The DWF and Retail Week Global Consumer 2019 report surveyed 1,000 consumers in each of the following jurisdictions: Australia, China, France, Germany, Italy, Kenya, the United Arab Emirates, the Republic of Ireland, the UK and the US. Research took place in October 2018.
10,000 consumers took part in our survey to understand the global consumer behaviour trends key to retail strategy. In this section we deep-dive into each of the 10 jurisdictions we surveyed to explore the political and economic climate, some key stats around income and unemployment and how all of this is affecting the retail outlook. Click on the flags below to compare each jurisdiction.