Today's European consumer is diverse and changing in terms of age, wealth, values and behaviours. The economic environment in which they live also shapes consumer needs and perspectives. Companies need to deeply understand the future European consumer landscape to keep abreast of changing demands and capitalise on new opportunities. Euromonitor International has identified three trends that will define the consumer landscape in Europe: ageing, single living and value seeking.
The oldest region is growing older
On average, European consumers are growing older and living longer due to declining birth rates and rising life expectancy.
In 2023, the median age of the European population surpassed 42 years (the highest globally) and was twice as high as that in the Middle East and Africa
Source: Euromonitor International
Europeans will become much older in the coming decades. By 2040, life expectancy at birth for the European population is set to reach 82.5 years (from 73.5 in 2023), and become significantly higher than the global average of 75.9 years. As life expectancy increases, the need to cater for older consumers and tailor products and services to suit their needs and wants emerges.
Globally, Generation Alpha (born between 2010 and 2024) is anticipated to dominate demographically in 2040, while in Europe, millennials will hold sway in numerosity, constituting one in four consumers in the region, and income, with the highest average wages among all generations. Consequently, consumption patterns in millennial-concentrated countries, particularly in Eastern Europe (including Poland, Lithuania, Slovakia), will align with their values, emphasising digital proficiency, climate awareness, and experiential preferences.
Homes are evolving to embrace single living and home-centricity
The number of single people worldwide is growing as a result of rising divorce rates, delayed marriage, greater female labour force participation, and population ageing. The latter has the highest impact in Europe, which in 2023, already had the highest proportion of single-person households – a trend that will continue.
By 2040, the number of single-person households will grow to encompass 36% of all families in Europe, with almost half of all households in Latvia, Finland and Norway being single person
Source: Euromonitor International
The shift towards single living will shape consumption towards more compact and multifunctional dwellings, furniture, appliances, and gadgets, smaller portions in food and drink offerings, and an increasing need for tailored leisure and recreation options.
The rise in single-person households is fuelling European home-centric and digital living trends. Euromonitor International predicts European consumer spending on digital living to exceed 11% in the coming decade, making Europeans notably more digitised by 2040. Consumers will increasingly invest in automated appliances and advanced technologies to enhance home convenience and comfort. More than 16% of European consumers stated their intent to increase spending on new technology in the coming year, as per Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2023.
Consumption is redefined by the strive for value and values
71.1% of Europeans are concerned about their everyday costs going up, 70.4% are uncomfortable about their current financial situation and only 29.2% have sufficient money to cover an emergency
Source: Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2023
As elevated inflation in Europe prevails, Europeans are changing their consumption patterns to prioritise cost-effectiveness. Notably, Polish and British consumers rank among the top seven globally in their pursuit of bargains, with over 50% of consumers actively seeking deals.
However, consumers are also shifting towards more selective and mindful spending and basing their consumption choices on heightened and newfound values, motivations and expectations. They are becoming value-seekers. The top motivations, such as seeking connection, inclusivity, and simplicity, reflect a growing consciousness. Social and environmental responsibility is also paramount. The 2023 Euromonitor International Voice of the Consumer: Lifestyles Survey highlights Poland and Romania as European leaders in conscientious consumerism, with over half of respondents believing in their ability to impact the world through choices. For businesses, this emphasises the need to be at the forefront of value creation in innovation, integrating affordability with consumers' core values and motivations to stay relevant and responsive to evolving market preferences.
Business strategies for success
- Keep up with the consumer. Success in the European consumer market hinges on businesses' adept understanding of evolving consumer dynamics shaped by demographics, economics, and values. This insight is pivotal for tailoring consumer-centric offerings that resonate with the changing preferences and trends in the market.
- Invest in new technologies. Irrespective of industry or sector, enterprises must strategically invest in emerging technologies and cultivate additional capabilities to seamlessly provide products, services, and experiences directly to consumers within the home environment.
- Adopt more versatile business models. Businesses must embrace adaptable business models beyond traditional ownership, responding to shifts in consumer behaviour driven by sustainability, environmental considerations, and financial constraints. Versatile approaches, such as buy-back programmes, subscription services, and repair offerings, exemplify strategies that align with these evolving market dynamics.
Read our article Consumers in 2024: Uncovering Opportunities Amid Uncertainty for short-term analysis on global consumers in 2024 or learn more about the e-commerce landscape in Three Key Strategies for Navigating the Polish E-Commerce Landscape.