Even if the overall situation has improved slightly, the consumer climate in Germany remains clouded. German consumers still want to save on non-essential products. At the same time, they want more transparency when it comes to product sustainability. Generative AI can help, is the conclusion of a consumer study by the Capgemini Research Institute.
People still want to save
At 47 percent, almost half of German consumers are worried about their financial situation due to rising living costs. That’s 17 percent less than last year, but the desire to save is still high. Around half of consumers want to save money primarily on products that are not essential to life, such as clothing, furniture and luxury items. Seven out of ten respondents therefore prefer to shop at discounters or prefer cheap and own brands instead of branded products.
“Although consumers’ financial situation has eased slightly this year, they remain cautious in their purchasing behavior. “Retailers should modernize their operations so that they can pass on cost advantages to their customers, who are becoming increasingly selective when choosing products and brands,” said Achim Himmelreich, Global Head of Consumer Engagement, Consumer Products & Retail at Capgemini.
More transparency on product sustainability required
When it comes to the sustainability of products, consumers expect more transparency. To do this, they specifically search for information before making a purchase decision, for example about the impact of a product on biological diversity, air quality or water resources. However, more than half (54 percent) of respondents said they did not have enough information. About the same number (51 percent) said they did not trust companies’ sustainability information. Nevertheless, 58 percent of respondents would switch to a more sustainable product if they received more information about its environmental impact. Information could be provided via labels, QR codes and packaging.
Generative AI influences purchasing behavior
In view of customer wishes, the authors also integrated a solution approach into the survey, namely the use of generative AI as a shopping tool. According to the study, consumers’ awareness of generative AI as a shopping tool is high: 71 percent said they already know how to use generative AI when shopping, and a fifth (21 percent) have already used the technology for this purpose . Generative AI shopping tools include enhanced chatbots and product search functions, but also better recommendation systems.
At the same time, the study shows that people are aware of the risks of this technology. Almost two-thirds (63 percent) are concerned that generative AI could create false or misleading product reviews. In April last year that was only 29 percent. The majority of respondents therefore expect retailers to be transparent about whether they use generative AI.
“Generative AI is an essential tool for the retail and consumer goods industry to strengthen customer centricity by offering consumers an individual shopping experience and better addressing their needs through personalized communication,” continued Himmelreich. Previous studies have also shown that The majority of retail companies expect clear efficiency benefits from the use of generative AI. “However, the concerns that consumers have about generative AI also make it clear that companies must promote sustainable and ethical practices in their use in order to build trust.”
Social commerce is increasing
In addition, social media is playing an increasingly important role for consumers and as a sales channel. More and more people are discovering new products here and want to buy them there. especially the younger generations. Nearly half of Gen Z consumers (ages 18 to 24) and 41 percent of Millennials (ages 25 to 40) have purchased products through social media platforms. As a result, the importance of influencers is also growing: More than half of those surveyed who made purchases via social media looked for recommendations, discounts and offers from social media influencers before purchasing.