Future Consumer Index: navigating how to serve tech-reliant consumers who don’t trust tech

The consumer landscape is changing with the digital era, and establishing relationships based on trust, respect and value has become paramount.

In brief

• Consumers will quickly adopt tools that save them time or money, but worry about the impact of technology on their lives, according to EY global research.
• Continued investment in digital innovation is essential to driving business performance in a tight market, but only in ways that consumers value.
• Companies need to stay ahead of the next wave of technological disruption, which will transform both what consumers want and how to engage with them.

Consumers around the world are trying to remain resilient in the face of continued cost of living pressure, economic worries and social disruption. Increasingly, they’re adopting new technologies to help them shop, live and work differently — often with a focus on making their everyday lives more affordable.

The 12th edition of the EY Future Consumer Index explores the way people around the world are thinking about the personal benefits of technology. Their experiences of using digital tools at home and at work are influencing what and how they consume. There are significant opportunities for brands that understand and shape these changing perceptions, and that anticipate the transformative changes they could lead to.

This isn’t just a question of choosing the right technologies, managing their implementation, and building the infrastructure to support them. It’s crucial that digital innovation protects and nurtures the relationship with the consumer. Three things matter here: trust, respect and value. Can people trust you to use technology responsibly and safely? Do they feel you are using technology to help them, or to take advantage of them? Is the value they get from an innovation fair, considering how much your business benefits?

Get the balance between these three factors wrong and you can quickly do damage that can’t easily be repaired. Get it right and you can strengthen your relationship with consumers now, while securing permission to develop and deepen that relationship in the future, as new technologies become mainstream.

Consumers find technology increasingly embedded into their lives

The pace of digital innovation and adoption is often so rapid now that consumers can quickly become dependent on new tools, without noticing they’ve become part of their daily experience. Consumers are increasingly relying on digital tools to make life easier, save them money and time, enable them to work from home, or reduce their environmental footprint.

They’re using digital to manage their budgets, curate the TV they watch and the music they discover, find alternative brands, stay in touch with friends, track their health, and multiple other reasons. For example, 36% of consumers use facial recognition on their cell phones and 65% use a smart device to track their exercise.

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A chart showing how consumers use mainstream and emerging technology across multiple aspects of their lives — for example, listening to audio streams and ordering groceries online — and how this has increased significantly in less than a year (between June 2022 and April 2023).

Consumers’ use of mainstream and emerging technology across multiple aspects of their lives has increased dramatically in the last year, our global research finds. The increasing dependence on digital tools, both at work and at home, is coming at a time when consumers are more worried about a wide range of economic and personal factors. However, after a period of relatively little movement, this new wave of our Index is tracking a significant pivot toward two concerns: finances and health.

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An interactive line chart showing how the five consumer segments have moved over time starting from June 2020 by country. In April 2023, the consumer segments appear in the following order: Planet first (22%), Health first (21%), Affordability first (20%), Society first (20%) and Experience first (18%).

People are prioritizing issues that affect them directly as individuals, rather than those that feel like collective challenges, such as their concerns about the planet. Naturally, many are taking steps to curb spending but how they manage their budget is dependent on where they live. In MENA, consumers are focused on value, with 69% of consumers noticing pack sizes reducing but the price stays the same and 72% believing private label products are just as good as branded ones.

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A chart showing how consumers globally are responding to the cost-of-living crisis as well as country differences by region. For example, 35% of consumers are purchasing only the essentials and 19% plan to spend less on grocery delivery services.

Consumers concerns about price put business behaviors in focus

Retailers and consumer product companies should keep these financial and health worries in mind as they use new technologies to engage the consumer. Digital innovation can play a crucial role in improving performance by managing costs, keeping prices competitive, optimizing marketing and finding efficiencies. But the need to meet these daily business challenges should be balanced against a longer-term strategy that anticipates the opportunities continued technological change will create. We will see very different kinds of consumers, different business models to serve them, and different brand/consumer relationships.

Companies should be careful that they don’t do anything for short-term gain now that locks them out of this future. As consumers ignore or abandon innovations that don’t give them what they want, the risk of digital rejection can also be higher. Brands that disappoint a consumer risk closing the door to a future digital relationship with them. This is why it’s so important to tune in to the way consumers think and feel about the digital innovations that are entering every aspect of their lives today.

Consumers remain wary about the impact of new technologies

Consumers can have paradoxical relationships with new technologies. They can become highly reliant on a tool, while also worrying about its risks to their mental and financial wellbeing.

For example, people take the constant connectivity of their mobile devices for granted, yet they increasingly want to turn off alerts and reminders because they find that persistent connectivity overwhelming.

Familiarity alone does not build trust. While artificial intelligence (AI), for example, is becoming a normal part of brand engagement for many consumers, a significant proportion are worried about how it might be used, with 21% of respondents concerned it may completely replace their role. And people who use AI in the workplace are more worried about its impact on their life outside work.

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A chart showing the concerns and expectations of managers and professionals about AI, and that those who use AI in their job to generate content have stronger views. For example, 25% of managers and professionals who use AI to generate content are concerned that the products and services they get exposed to are restricted, compared with 49% of those who don’t use it.

The availability and accessibility of digital innovation is growing, but trust in technology and its usage of personal data is not. Across each wave of the Index, we’ve seen no significant change in the willingness of consumers to share data with companies or brands. Consumers remain wary:

55% are very concerned about ID theft and fraud.

53% are very concerned about data security/breaches.

47% are very concerned about companies selling their personal information to a third party.

They want to weigh the benefits of sharing data against the risks and the value they receive in exchange.

Innovations in technology must give consumers tangible benefits

Companies are rushing to build data repositories they can mine for insights; consumers are increasingly aware that their data is prized. They expect more in return for sharing it, such as access to better deals. How companies balance this exchange is an important part of consumer engagement.

Companies are using technology and data to protect razor-thin margins and market share. They need to tread carefully, as consumers are already turning toward value, experimenting with new brands and re-evaluating what’s essential. If they feel that participating in new technologies doesn’t benefit them, the business won’t just lose their custom now — it could experience irreparable damage to the kind of consumer relationships that long-term success requires.

This latest wave of the Index shows that the high levels of trust consumers had in many companies after the pandemic are steadily falling. Retailers and consumer products companies have many more interactions with consumers than most companies, which is an opportunity to build trust or to damage it, if the consumer’s needs and context are not considered.

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A chart showing how trust in retailers and consumer products have changed over time. For example, trust in supermarkets and grocery stores was 77% in February 2021 but was 79% in April 2023.

Technology will fundamentally change how people live and work

The rapid pace of technological change is going to transform the way people live and work, and will redefine the future consumer. Small, seemingly unconnected changes in many areas can result in sudden unexpected shifts in behaviors and attitudes. And new technologies can slowly insinuate themselves into a consumer’s daily life before anyone realizes it.

Half of the consumers in our Index say they work for companies that are taking on large technology projects designed to create more value for investors, employees and consumers. One of the most significant drivers of change is AI, which will revolutionize the consumer experience, with new products and services, novel ways of accessing them, and entirely new modes of living and working on the horizon.

We’ve developed over 200 drivers of change and explored their possible impact on every aspect of the future consumer’s world — from how they might shop, play and stay healthy to how they will consume, work, move, and use technology. Using them we can point to how AI could impact and shape multiple aspects of consumer life and business activity.

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An interactive chart showing how AI will impact multiple aspects of consumer life and business activity using relevant drivers of change from the EY bank of over 200 Drivers of change. For consumer lives, they include the products available to consumers, how they access them and how they live and work. For retailers and consumer products companies they include how you run your business operations, the products and services your business offers and how they engage with consumers.

Engaging with consumers to earn respect, give value and build trust

Consumers are retrenching and revisiting their values to address their affordability concerns. Companies must meet these short-term needs but can’t afford to lose sight of the bigger picture. Technology will reshape consumer behavior in the future, and businesses must create value propositions that will remain compelling.

1. Do your consumers fully understand the value of your brand or product? Is it what they want?
   
   For retailers and consumer products companies, this is a pivotal opportunity to be part of people’s lives like never before. But it’s important to offer benefits they value. For example, can you offer invisible, time-saving convenience? Do you solve their problems in ways that make you indispensable? Are you creating experiences that are satisfying, rewarding and differentiated? Is technology helping you deliver the ideal mix of these three components?
   
   
2. What are you doing to build consumer trust in your products and touchpoints? How do you know if it’s working?
   
   Trust is about giving value for money, keeping data safe, behaving in line with corporate values that the consumer shares, taking an ethical approach and being authentic among many other critical issues. If you become part of the consumer’s inner circle of trusted brands, you can benefit from a much deeper and wider relationship with them. But at a time when trust in companies is eroding, relationships like this are hard to build and easy to break. With new channels proliferating, consumer-facing companies are in near constant contact with consumers, so they have lots of opportunities to get this right, and as many to get it wrong.
   
   
3. How are you adapting your strategy to shape the technology-driven revolution in customer engagement? What are you prioritizing?
   
   Continuing innovation is going to transform the propositions available to consumers, how they access them, and how they live and work. In response, companies will need to evolve the products and services they offer, their business operations, and how they engage the consumer. Businesses also need to identify, implement and integrate technologies that are right today and for the future. This is complex, but the goals are clear: Build trust with the consumer, earn their respect, and give them value they appreciate.