As part of its ‘how to target evolving urban consumers’ report, Lan Ha, Senior Consultant on Population from market research provider, Euromonitor International, details key findings on how urbanisation is spearheading consumer trends.
Based on this research, we take a look at how urbanisation is set to impact European brands and consumers alike over the next decade.
Overall, the typical urban consumer profile that the retail environment has been used to seeing is changing:
- General population ageing is resulting in new and evolving markets in the 65 and over consumer category
- Values and priorities are shifting, impacting both purchasing influences and decisions
- Rising immigration is simultaneously creating a rise in diversity and multiculturalism in urban consumers
- Increasing disposable incomes show that consumers are opting for experiences over material possessions. As a result, consumption will revolve around services relating to healthcare, travel and education.
What does this mean for beauty brands?
Well, by 2030, the urban consumer profile is set to change — and these changes have already started or are taking shape. Companies in the cosmetics space, therefore, need to be primed to modify their business plans and marketing strategies to target and appeal to these shifting urban consumer profiles.
Urbanisation reality: What’s the story in Europe?
By 2030, the global urban population is expected to reach more than five billion people and will account for 61% of the world’s total population.
Fragmented and contrasting trends affect and drive urbanisation when we look at countries around the world. While in Asia, China is anticipated to see the highest hike in urban population through to 2030, the US is seeing re-urbanisation with Millennials and students moving into big cities, while Eastern European cities will see a sharp decline in urbanisation.
If we take Eastern Europe, for example, the Ukraine, Bulgaria, Greece, Romania, Latvia, Serbia and Lithuania all feature in the top 10 list of countries expected to see the largest decline in the urban population between 2018-2030.
The steep decline in urbanisation is Eastern Europe is associated with extremely low birth rates and population ageing. We can see that these factors are at play when we consider some of the core impacts of urbanisation, namely shrinking families, later parenting, the rise of single persons and the expanding middle class with rising incomes.
There are no European countries in the top 10 list of countries expected to see the biggest rise in urban population. Yet the other hallmarks of urbanisation are likely to still be experienced, including better access to education, better connectivity, high costs of housing: small living spaces, pressure on infrastructure and services, less time for leisure and physical activity, pollution and related health issues, and large gaps between ‘haves’ and ‘have-nots’.
Where can beauty brands benefits?
While there are diverging trends within Europe, we see there being four core areas where companies emerging and developing throughout Europe can use these shifting patterns to their advantage to support their brands and new launches.
1. Evolving lifestyles
As disposable incomes and affluence increases, this urban consumer group will be interested and happy to spend on premium, high-quality and high-efficacy products and services that enable them to enjoy their lives and save them time.
2. Ageing positively
Ongoing and increasing conversations over healthy ageing versus anti-ageing co-exist — yet with the global urbanisation, brands need to adopt positive attitudes to ageing in their product development concepts and marketing strategies. The urban consumer over-65s group will therefore be keen to enjoy their lives and embrace health and wellness products and services.
3. Urban singletons
Euromonitor International's research reveals that by 2030, 19.3% of total households around the world will be single-person homes. Although typically budget-conscious, these solo urban consumers look for, and invest in, experiences that promote and allow them to embrace their independence and individuality.
4. Developing and emerging markets
Urban consumers from these markets will witness an increase of 892 million to the urban population by 2030. Along with births in cities, this will be attributed to ongoing rural-urban migration trends. As infrastructure improves, along with the rise of smart connected cities and increasing incomes, new urban consumers invite opportunities for products and services that reflect their urban lifestyle. Health and beauty may not jump out as a key area for this consumer group. However, when these products are combined with health, wellness, affordability, ease of use and comfort trend-based messages, this is likely to have more resonance and uptake amongst urban consumers from developing and emerging markets.