“It’s been a tough period for many households but there are grounds for cautious optimism about the future. We are already seeing energy providers reducing prices and a slower pace of food inflation and the European Central Bank has just cut interest rates. These are welcome developments, as is the continuing strength of the labour market. Jobs are being created and wages are rising, signalling an uplift in consumers’ financial situations. This is reflected in our research findings, with 42% of respondents expecting to be better off in a year’s time. All of which gives us reason to believe that consumer spending growth is in prospect for Ireland.” said Dr. Loretta O’Sullivan, Chief Economist and Partner at EY Ireland
Business opportunities amidst challenges
Notwithstanding the challenges of a higher-cost, health-focused market, businesses can turn these into opportunities for innovation, customer loyalty, and competitive advantage. It is clear that price is increasingly trumping brand loyalty and that consumers have the means to independently seek out those products that they believe provide the best balance of quality and affordability. In these circumstances, businesses that successfully identify their brands with good value for money can gain market share at the expense of rival products which are perceived to be more costly.
“What is clear is that we are seeing the rise of the independent consumer. One who actively seeks out product information and makes purchasing decisions autonomously, rather than responding to traditional marketing approaches. Tried and tested methods of targeting, communicating and persuading consumers to buy are increasingly being disrupted by digital channels and social media, especially the power of influencers. Irish brands and retailers will need to innovate and invest in channels and experiences that resonate with the values and preferences of individual consumers, rather than relying on broad, one-size-fits-all approaches.” said Colette Devey, Consulting Partner and Consumer Sector Lead at EY Ireland
Furthermore, businesses that can meet the health and affordability needs of consumers will be among the winners in the coming years. Once again, innovation has a role to play with low-salt and sugar products likely to become more popular as will those with positive health aspects such as cholesterol-reducing ingredients. However, against a backdrop of affordability concerns, there is unlikely to be a significant price premium available for such innovation. The reward will mainly come in the form of retained or increased market share while maintaining current price points.
A recent EY survey highlights a significant opportunity for Ireland's healthcare sector to adopt digital technologies, addressing public concerns over healthcare costs. With 87% of consumers worried about rising healthcare expenses, there's a strong appetite for digital health solutions that could lower costs and enhance access to quality care.
“A key challenge we are facing in Ireland is to increase the length of time people live a healthy life – so called healthy life expectancy. We must do this equitably, raising standards for all, but with a focus on those who need it most. The results reported here suggest that both physical and mental wellbeing are of central importance to people in Ireland, a finding echoed in previous work which demonstrated that people here want to take responsibility for their health. Taken in the context of almost 9 in 10 people citing concerns about the rising cost of healthcare, these findings represent an opportunity for those businesses who can deliver value-driven health and wellbeing solutions that are both accessible and affordable. More broadly, these results suggest that businesses will increasingly need to broaden their conceptualisation of wellbeing from one which is focused on physical and mental health to one which also incorporates social, planetary and economic wellbeing.” said Dr. Ronan Glynn, Partner and Health Sector Lead at EY Ireland
Summary
With affordability still very much on households’ radar, businesses will need to adapt their product and service offering to meet this reality while simultaneously exploring the opportunities offered by the rise of the health-conscious consumer.
