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Page 5 ANALYSES December <strong>2023</strong> A look into the future based on inflation Gfk experts provide consumer forecasts for 2024 Multiple crises and a high inflation rate have characterized the year <strong>2023</strong>. Many consumers are unsettled, the consumer climate is stagnating. How has this year changed consumers and their values? And what will be important in 2024? Experts from GfK and NIQ look back and provide data-based forecasts for the new year. The current crises are leading to a growing need for security. Women, people on low incomes and young people in particular show an above-average orientation towards security. „Generation Z and millennials are unsettled by a variety of issues, such as terrorism, environmental pollution, the quality of education, the impact of disruptive technologies on society, recession and unemployment. As a result, they are probably looking for stability more than older people,“ explains Petra Süptitz, consumer trends expert at GfK. „This is also reflected in their purchasing behavior. Young consumers trust established brands more often than older people because they rely on their proven quality. They will continue to do so in the coming year.“ Trend towards retreating into the home Consumption and inflation in the coming year - GfK and NIQ provide forecasts. Symbolic image: Depositphotos / Igor Vetushko Older and financially less crisis-proof people in particular are retreating into their homes. This is accompanied by a trend towards domestic activities such as cooking and repair work. Social activities are also shifting to the home: while 30% of 20 to 29-year-olds had guests at home at least once a week in 2019, this figure had risen to 37% by <strong>2023</strong>. This is presumably also due to price increases in the catering industry and may increase further with the return of VAT from January 2024. Already, 43% of Germans are eating out less often to save money. Climate change remains the third biggest concern for Germans. This means that sustainability will remain a relevant topic in 2024, although the latest GfK Sustainability Index showed that the willingness to pay for sustainable purchases has decreased slightly. The situation is different for technical consumer goods, especially larger household appliances: Consumers are willing to pay more for sustainable refrigerators, washing machines or dishwashers, as it is not only the environment that benefits, but also the consumer. Buyers pay eleven percent more than the average for washing machines with an A energy efficiency label. At the same time, their market share is increasing: while 37% of all washing machines were in energy efficiency class A in 2022, for example, this figure had risen to 60% in the first ten months of <strong>2023</strong>. These appliances are attractive because they consume less energy and allow consumers to save money during operation. Consumers are also increasingly opting for durable appliances - as this also reduces the life cycle costs of the product. „Consumers want to make their everyday lives easier with technical aids. In a time of many simultaneous crises, at least the home should be an uncomplicated, stressfree retreat,“ says Alexander Dehmel, expert for technical consumer goods at GfK. „And they are willing to pay for it: 52% of Germans say they are prepared to spend more money on products that make their lives easier. This is where growth opportunities lie for 2024.“ In the FMCG sector - i.e. food and drugstore products - consumers are becoming more price-sensitive. In <strong>2023</strong>, private labels were on the rise: on the one hand due to lower prices, on the other hand the image of private labels has also changed. According to NIQ data, many consumers see private labels as a good alternative to branded products (51%) and often consider them to be of equal or even better quality (41%). In competition with stronger private labels, it is important for traditional brands to sharpen their unique selling points and rethink their value proposition. For example, a stronger focus on certain product characteristics such as effectiveness or sustainability can help them remain competitive. „The industry is aware of the challenge of finding a balance between price and image. Our recent NIQ Insider Survey of industry executives revealed that in 2024, they believe products must offer good value for money and be affordable in order to be successful,“ explains Enrico Krien, consumer expert at NIQ. Price and promotion management will play a decisive role in the coming year, not only for manufacturers but also for retailers. In view of limited consumer budgets, retailers will have to find the right balance between attractive prices and promotions with relevant margins in order to attract consumers on the one hand and secure important margins on the other. Category management will also be even more relevant in 2024 in order to identify growth areas and better exploit them with products and services relevant to the respective target group segments. New product ranges, products or brands can also secure important sales. To do this, retailers must have a precise understanding of customer preferences and market conditions. Relying on gut instinct is no longer enough in such volatile times - not least because consumer segments are becoming increasingly fragmented. Additional margins are offered by the monetization of data and specific retail media offerings, which also enable the industry to address relevant buyer segments in a targeted and efficient manner. Customer centricity and customization „In a digitalized world where change is the new normal, unconditional customer centricity and adaptability are important keys to success. Retailers who set up their strategy based on data and constantly adapt it will be better positioned to meet the ever-changing demands of consumers. This is how retailers ensure long-term success,“ summarizes Oliver Schmitz, retail trends expert at NIQ and GfK. T TOPS O M OF THE MONTH <strong>TOM</strong> TOPS OPS F THE ONTH OF THE RETAIL REAL ESTATE Essential News About The Players In In The Retail Real Property Estate Market In in Germany IMPRINT MONTH Publisher: Business News Group GmbH Address: Alexanderstraße 16 45130 Essen Germany Tel. 0049-201-874 55 28 Web: www.hi-heute.de Mail: tom@hi-heute.de Frequency of publication: monthly Circulation: approx. 5000 copies sent by e-mail Editorial team: Susanne Müller, Thorsten Müller Responsible in terms of press law: Thorsten Müller Layout: K4-PR, Essen THE HOT INTERVIE +++ PART ANALYSE presente March