Marktumbruch im Jahr 2023: regionale und globale Einflüsse

In an interconnected world, global crises unavoidably become regional challenges. But how it impacts business and consumers is unique to each region, or even to specific countries within them. The war in Ukraine has come hard on the heels of the COVID-19 pandemic and skyrocketed European inflation. While it has started to decline in some countries due to lower energy prices, it will remain high for the rest of 2023. These two events have deeply affected the region’s markets and influenced lasting shifts in consumer behavior that dominate the region, the effects of which we will continue to feel in 2023. Let’s take a closer look.

The rise of polycrisis

Lately, regional and global crises are coalescing to create polycrisis in the market. Whether international geopolitics or natural disasters are threatening brand supply chains or driving up costs, or consumers’ shrinking budgets are changing how, when and where they spend: effects are being felt simultaneously. They’re also nuanced: with each country’s market and consumers responding differently.  

The war in Ukraine is existentially felt in bordering countries, such as Poland, but a mixed set of pressures including the war are sparking a rise in social insecurities, or worsening pre-existing ones, across the region. For example, France has seen ongoing strikes and protests since the beginning of 2023, against the government’s unpopular push to raise the national retirement age from 62 to 64. In addition, some European countries have implemented divisive government policies on sensitive issues such as immigration and the parental rights of same-sex couples — pushing already stressed consumers to the brink.

While T&D retailers and manufacturers can systematically prepare for the logistical-, or price-related challenges thrown up by disruptions such as the war in Ukraine, responding to holistic legislative changes that more generally affect consumer sentiment — and purchase behavior — is not as straightforward. Brands must carefully evaluate if, and how, to react towards socio-political shifts. However, there is an opportunity to build or maintain brand loyalty, for brands willing to compile, share and embody a “value catalog” that responds to the social moment (more on how brand behavior is critical to building trust with European consumers below).   

Offline is back, but online is here to stay

The COVID-19 pandemic was ground-zero for retailers, with consumers fundamentally changing their purchase behavior out of necessity. While offline channels are making a comeback, online shares remain high and are expected to remain steady, or even rise, in 2023.

Innovation is especially important in times of crisis to stabilize sales development and differentiate from the competition. While brands and retailers could still rely on established products from 2021 and 2022, innovation is once again critical to driving brand appeal and to address solvent, crisis-resistant consumers. And consumers expect to see it in more than just products — the new European consumer demands brands that differentiate with one-of-a-kind in-store experiences that complement, and seamlessly transition between, their online touchpoints.

Petra Süptitz, Director Marketing & Consumer Intelligence, GfK

The new familiarity with online channels has hybridized consumer path to purchase, and made tracking touchpoints even harder. To succeed, brands need omnichannel strategies that both address more complex journeys and continue to update brick-and-mortar stores to a broadened function — no longer just as utilitarian points of sale but as new experience hubs, where consumers can physically engage with the brand experience and products before a possible online purchase.

Consumer spending power has shrunk but if the price is right, they’ll pay

Key regional challenges to growth boil down to the decrease in consumers’ expendable income, and negative consumer sentiment — making them less willing to spend the money they have got, with GfK’s Q4 2022 Helicopter View Report sharing that T&D sales volume declined everywhere in the region except Poland, which only posted +1% growth.

Promotional seasons are more important than ever before. In 2021 in Germany, for example, November first displaced December as the bestselling sales month due to increased promotional activities by retail and industry, with +18% sales compared to December. In 2023, the persistently difficult socio-economic climate is likely to lead to more promotional activity throughout the year but with November still being the most important month.“

Alexander Dehmel – Market Intelligence Lead Germany and Austria, GfK

Brands must now deliver promotions that cater to price-conscious consumers of every segment and foreground products and features that budget-squeezed consumers will find not only irresistible, but indispensable. 

Europe beyond the European Union

European Consumers in 2023

A typically sheltered consumer now faces the unthinkable: war in Europe, which plunged the EU Consumer Index to lows not even seen at the height of the COVID-19 pandemic. While outliers and generational differences exist — the mood remains persistently less severe in Poland compared to the rest of the EU (e.g. -17.4 vs -20.6 in December 2022), and younger consumers across the region are quicker to purchase — the 2023 consumer is subdued, though resilient. Let’s take a closer look at how the continued fallout from the war, and an intensifying climate crisis, is set to shape consumer values and behaviors into 2023. 

Premium products and features are here to stay

No crisis in the last 20 years has dampened consumers’ appetite for premium products and features, and 2023’s mix of challenges is no different. Consumers remain willing to spend premium prices when justified by innovation, and backed by a trusted brand.

While high-income households unsurprisingly continue to fortify the premium segment in T&D, mid- to low-income earners have also adapted their view on premium purchases.  

Before 2020, a blender was just a utilitarian object, especially for mid- to low-income consumers. And elaborate home coffee makers were an unthinkable luxury for all but the highest-earning segments. But, after being confined to their kitchens and homes, consumers learned firsthand how so-called ‘premium features’ could drastically improve quality of life. In some ways, the little things mattered — and now, they’re willing to pay for it.”

Thilo Heyder – Director Market Insights SDA Germany/Austria, GfK

The pandemic lockdowns catalyzed a behavioral shift, making consumers more comfortable with indulging in premium features or products in typically utilitarian domestic appliances. For example, consumers started to indulge themselves with increasing percentage of upgrades on working kitchen appliances, with 24% of Western European consumers upgrading a working Oven/Hob in 2022, and Laundry, Refrigerator and Kitchen premium segments all remaining a strong part of the market from 2020-2022. While there is a current uptick in consumers prioritizing refurbished or second-hand goods overall, premium still exerts a strong appeal overall.

Brands must earn consumers’ trust to win their purchase

Brand behavior counts more than ever, as consumers rely heavily on trust to drive purchase decisions. Our data shows that consumers of all ages prefer brands that appeal to their values, and Millennials and GenZ would specifically select one over another because it supports a cause they believe in — with nearly half agreeing to this statement, compared to 40% of Gen X and Boomers.

If consumers have the choice of two equivalent products, they will choose the one that’s backed by a brand whose values they align with — even if it means paying more. Already, 49% of European consumers only buy products and services from brands that appeal to their beliefs. In today’s highly competitive landscape, consumers will effectively always have that choice. To succeed, brands must invest as heavily in brand building as in the product they’re hoping to sell.“

Nathalie Bollé – gfkconsult Regional Lead WSE, GfK

But authenticity is critical. Consumers can recognize false or unfulfilled brand promises and one misstep can cost dearly, even after years of brand building. According to GfK’s 2022 Consumer Life and Green Gauge Plus surveys, Boomers are more likely to stop trusting — and buying from — brands when they suspect unethical environmental business practices, or Greenwashing. Meanwhile, younger consumers are easily distanced from brands when they fail to tie messaging or channels, to contemporary trends, language, and platforms that regularly reiterate their values.

More than just communicating brand values, consumers want to see them realized in every brand interaction, product or service. With brands like Patagonia and Nike brave enough to threaten their profits by standing for their values (with Patagonia making sustainable decisions at the cost of their margins, and Nike polarizing their audience by directly confronting racism with their “For Once, Don’t Do It” campaign), stakes are high for others to do the same.

Products must save consumers’ pennies and the planet

The global desire for all things sustainable is growing amongst consumers of all age groups, and is set to become a must-have trait for brands wanting to meet demand and wishing to avoid being banned from the European market within the coming years. 

Despite the current crises, sustainability remains one of the most important brand values for consumers, with more asking where and how their favorite products are produced, and finding circular economies more attractive. For example, after a slight dip in enthusiasm sparked by the cost-of-living crisis, Western European consumers have renewed their desire for eco-friendly products. Despite rising pressures, consumers still demand green products and sustainability from their favorite brands — while inflation quickly became the #1 social concern, climate change still remains one of the top 3 concerns in Europe.

When making a purchase, products that are both environmentally friendly and more cost-effective at the same time win the day. For example, a water-efficient washing machine, or a refrigerator that saves on electricity will keep consumer utilities bills lower while also being better for the planet.

Brands who can cater to this dual-function, are set to win big as 50% of the global population is expected to be eco-active by 2030. This segment has a projected FMCG worth of over €1 Billion by 2030, and may be valued at over €700 Billion in Technical Consumer Goods. For longer term success, brands must make room to participate in sustainability and the circular economy: building buy-backs, product-leases, robust repair programs and value-add services into their growth, brand and marketing strategies.

Build irresistible brands that your target audience can trust

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Spotlight on Tech and Durables: Disruptors and opportunities

Consumers are used to spending regularly on Fast Moving Consumer Goods (FMCG), with the need for T&D purchases surfacing once every 2–7 years, depending on the category.

Despite a subdued mood, where consumers are cycling their T&D products less than usual, 2023 signals the start of a new buying cycle, with many looking to upgrade or replace purchases made before, or postponed during, the COVID-19 pandemic. Three key considerations can ensure T&D manufacturers and Retailers take full advantage.

Consumers strive even more for experiences, not (just) products

New products need to be explained, and alternatives to existing ones need to convince consumers of their unique value — one reason why consumers have returned to offline shopping, contributing 64% of sales share (€41.5 Billion) in Germany alone.

But they’re not unique, according to Global Head of gfkconsult Retail, Michael Haas, who shares that “experiences are driving the entire European market and supporting the development of successful retail brands, building trust along the way. Moving into 2023 and beyond, T&D retailers and manufacturers must keep pace with brands like Dyson, Apple, and Bose, and engineer touchpoints that allow consumers to engage with products without pressure to purchase and offer consumers branded in-store experiences they can’t find elsewhere.”

Meanwhile, future-forward retailers across all categories continue to reframe themselves from product hard sellers to experience champions and embracing omnichannel strategies — prioritizing those that help consumers seamlessly transition between online and in-store experiences. This can be a lifeline for brick-and-mortar stores, which won’t disappear but must evolve to maintain their place in the new, physical buyers’ journey.

Stronger retailer-manufacturer partnerships are critical to success

Currently the status quo holds that T&D manufacturers develop products that are either shared directly with consumers, or offered via Retailers. Meanwhile, retailers buy products and then find consumers who want them. This strategy is no longer effective. 

Brands and retailers seeking long-term success must build stronger partnerships and shift their focus to place consumers first — determining which products they make or stock only after target segments are identified and their needs understood.”

Michael Haas – Global Head of gfkconsult Retail

The tougher climate is shrinking retailer diversity, and placing survivors under pressure. While smaller stores can thrive by focusing intensely on target shopper groups, and offering highly curated product ranges that limit their success to that sphere, even the biggest retailers face upheaval: needing to match consumers’ changing expectations of what it means to be in store, by offering innovative product demonstrations and experiences that redefine the concept of a showroom. 

Innovation drives brand strength

In a climate where brand loyalty is eroding faster than ever, innovation matters.

Innovation and seasonal categories that show clear consumer benefit supported the YoY growth of Small Domestic Appliance (SDA) in Western Europe (+2%), while other categories decelerated. Notably, Asian brands dominated, for example: the robot vacuum cleaner segment has been overtaken by Chinese brands in just under 5 years. 

Clearly, established European T&D players can’t rely on their reputations and may be forced to look for new markets, as consumers no longer wait for their favorite brands to match offerings by new, more affordable and more innovative market entrants.

Today, ‘first in market’ means less than ‘first in mind’. New players in the market have the opportunity to use truly innovative products as a launchpad: building an enduring brand on this foundation, provided they can keep up the pace of innovation.”

Agnieszka Sora – gfkconsult Regional Director NCE

Unless established European brands can match the pace of innovation and price points being offered to the new consumer (without asking them to compromise on their eco-consciousness), the market is ripe for new brands to take hold. 

3 Keys for new players in the European market

There are three mission-critical actions new players must take in the European market to maximize their chances of success in 2023 and beyond.   

Leverage on-the-ground experience of the region

Vast experience in targeted countries, and the region as a whole, can support decision making around a possible expansion into a new category or market from day one. From the first feasibility study to the finalized GTM strategy, on-the-ground experience will ensure localized responses that tap into granular cultural, socio-economic and linguistic insights to diversify brand offerings and deliver innovations based on real consumer benefits.

Uncover a roadmap to success unique to the context

What worked previously will not work in the new market. It’s critical that every aspect of the new market is understood and a roadmap to success identified that’s unique to this context. To mitigate risks, new entrants must dig into many different sources of data, covering pure market development, the competitor landscape, local and global trends, consumer perceptions and their needs and demands. This shares a clear picture of what’s happening, where the market is headed, and the possible impact of brand entry, innovations, pricing and promotions.  

Maximize market entry impact with agile strategies

On-the-ground experience and an acute understanding of the local context contribute to a market entry strategy poised to succeed. In 2023, it’s critical they are agile and respond to rapidly changing consumer behaviors, market instability and competitor landscape. Today, a strategy that looks set to deliver exceptional ROI while brands are in initial planning stages may be less effective by the time it’s implemented: In 2023, ready access to relevant, data-backed insights every step of the way is crucial to identify opportunities and solve challenges as they arise. 

Are consultants critical to success? In most cases, yes! Regional consultants can bring a wealth of research and brand experience gained across diverse industry sectors to a market entry plan, and help to solve strategic challenges as brands grow. 

Expert insights and strategic direction to master the 2023 European Tech and Durables market

Watch these expert videos and uncover the expected consumer and sales trends in Europe for 2023, and know which strategies are crucial for success as a new market entrant or established regional player. Our experts share their data-backed insights on the region’s economic outlook, and how you can maximize your success in context.

Top 3 must-knows for Europe in 2023

Your executive summary highlighting key strategies for T&D manufacturers and retailers to stay ahead of the curve in the European market, resonate with consumers and outpace competitors. 

Customize your global strategies to the regional specifics 

The impact of the multifaceted crises and their implication for the brand, consumer and market vary strongly by region and market. To stay ahead of the curve, brands have to tailor their global strategies to the region’s specifics and stay agile to adapt to changing currents. 

In times of crisis, make consumers to your North Star

Just having come out of the COVID-19 crisis, European consumers face political and cost-of-living challenges. To command their attention, brands must win in multiple dimensions — from consumer-centric innovations covering both product and services, to brand purpose and values that resonate with target segments, to an all-integrated consumer brand experience. 

Strengthen partnerships and refine strategies to deliver with precision

Transform a deep understanding of target audiences into best-in-class communication, manufacturer-retailer partnerships, assortment planning and more to deliver what consumers want, when and how they want it.  

About gfkconsult

At GfK, our strategic business consulting team draws on GfK’s pool of data insights and AI-powered analytics to enable senior business leaders to craft winning market, brand, and consumer strategies. Get in touch and see how we can help identify opportunities, solve business challenges, and rapidly deliver measurable impact. Let’s strategize your big idea, today!