LongBench v2 / 66f97d7fbb02136c067c56b2 / Given the information presented in these studies, which of the following…

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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Executive 
Summary 
In the 2023 edition of our annual research series, What 
matters to today’s consumer, we found that consumers were 
worried about the cost-of-living crisis, with this concern 
naturally feeding into their expectations and purchasing 
behaviors. Many were worried, in particular, about the cost of 
feeding their families and buying essential items.
This report is the third in our annual research series that 
examines evolving consumer behaviors. This year, we find 
that many of the behaviors we noted in our 2023 report have 
persisted, with consumers continuing to express concern 
about their personal financial situations amid rising inflation. 
However, this concern has dropped significantly in the past 
twelve months as just 43% of consumers worry their personal 
finances will worsen over the next 6–9 months, compared 
with 80% who were concerned that they would worsen in the 
equivalent period last year. 
New to this year’s research, we also explore the rise of 
generative AI and its impact on consumers’ purchasing 
behaviors. What we found is that around one in five 
consumers has used generative AI to shop and just over half 
of users have already acted on product recommendations 
made by generative AI tools, such as ChatGPT, with 55% of 
Gen Z having bought products recommended by generative 
AI tools.
Social commerce is a retail channel that is growing in 
popularity, with 46% of Gen Z consumers having purchased 
a product via social media platforms. We also explore how 
consumers have become more sustainability-conscious, 
demanding greater transparency on product origin and 
business practices and processes. Around 60% of consumers 
want brands to play an active role in consumer education and 
awareness in this regard. 
We highlight three opportunities for brands and retailers 
to capitalize on these evolving trends. First, companies can 
identify and adopt innovative technological solutions to 
reduce costs, with savings passed on to consumers. New 
technologies such as generative AI are critical to businesses’ 
becoming more customer centric. Second, brands and 
retailers can unlock channel growth by prioritizing social 
commerce, as this is a key area for channel growth, for 
example using influencers to amplify product promotions. 
Finally, organizations can educate consumers on the 
sustainability impact of their shopping and, in particular, seek 
to reduce food waste.
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Introduction 
In this year’s report, we explore the impact of the cost-of-
living crisis on consumers and examine their strategies for 
coping with it with the aid of technology. We also examine 
the influence of generative AI on shopping behaviors 
and habits and look at the areas in which consumers use 
generative AI in their shopping experiences. The impact of 
social commerce – especially on Gen Z – is also a focus of this 
report. Finally, we examine the way in which consumers are 
becoming more conscious of the impact of their purchases 
and are increasingly demanding a positive attitude towards 
promoting sustainability on the part of the brands they use. 
To address these themes, we conducted a global survey of 
more than 11,500 consumers over the age of 18 across 11 
countries: Australia, Canada, France, Germany, Italy, Japan, 
the Netherlands, Spain, Sweden, the UK, and the US. To 
qualify for inclusion in the survey, consumers must have 
purchased groceries and/or health and beauty products in 
the preceding six months. For more details on the survey 
sample, please refer to the Appendix.
We close this report by suggesting the key actions for brands 
and retailers to consider in order to manage and adapt to the 
ongoing shifts in consumer behavior.
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Introduction 
This report explores five broad trends:
Consumer worries around 
cost of living 
The rise of social 
commerce especially 
among Gen Z 
Use of generative AI in 
shopping 
Consumer awareness 
about the environmental 
and societal impact of 
their purchases
What makes for a positive 
shopping experience in 
the post-digital age 
1
2
3
4
5
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


CONSUMER WORRIES AROUND 
COST OF LIVING ARE STILL HIGH 
BUT HAVE EASED SLIGHTLY
01
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


The cost-of-living crisis 
continues to seriously 
impact consumer 
sentiments but there is 
some relief
Overall, 52% of consumers are extremely concerned about 
their personal finances compared with 61% last year. In the 
US, the share has dropped to 53% from 65%. Consumer 
spending, which accounts for more than two-thirds of US 
economic activity, accelerated 0.7% in September 2023.1  
In France (55%) and Spain (59%), this share is higher. In the EU, 
consumer food prices were 17% higher, year on year, in April 
2023. The prices of basic food items in the EU have shot up: 
e.g., sugar has risen by 55%, fresh whole milk by 25%, eggs by 
23%, and potatoes by 20%.2 Alexandre Bompard, Chairman 
and CEO of French supermarket chain Carrefour, comments: 
“We are seeing a non-spending tsunami in France. When 
people go without essential goods, one must act.” 3
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Of consumers in the lower income range (less than $20,000), 
66% are more concerned about their personal financial 
situations, which is the highest proportion among all income 
brackets. This concern about personal finances is more 
pronounced among Millennials (58%), Gen Z (56%), and Gen X 
(54%) than among Boomer consumers (42%) (see Figure 1). 
Overall, 43% of consumers fear their personal finances will 
worsen in the next 6–9 months, far below the 80% last year. 
In the US, 38% of consumers agree with this compared to 
55% in the previous year. Brian Cornell, CEO of US retailer 
Target, sums it up aptly: “As we look at the consumer 
landscape today, we recognize the consumer is still 
challenged by the levels of inflation that they’re seeing in 
food and beverage and household essentials.” 4
61%
52%
60%
56%
66%
58%
64%
54%
55%
42%
66%
63%
61%
49%
55%
38%
SHARE OF CONSUMERS WHO AGREE WITH THE STATEMENT: "I AM EXTREMELY CONCERNED ABOUT MY 
PERSONAL FINANCIAL SITUATION."
High income
(More than
$100,000)
Medium income
($35,000 –
$100,000)
Low income
(Less than
$35000)
Boomers
(Age 57+)
Gen X
(Age 41–56)
Millenials
(Age 25–40)
Gen Z
(Age 18–24)
Overall
November 2022                 November 2023
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023; N = 11,681 consumers: 1,048 Gen Z 
consumers; 3,358 Millennial consumers; 3,586 Gen X consumers; 3,689 Boomer consumers; Capgemini Research Institute, What 
matters to today’s consumer, January 2023; N = 11,300 consumers: 992 Gen Z consumers; 3,264 Millennial consumers; 3,332 Gen X 
consumers; 3,712 Boomer consumers.
FIGURE 1.
Consumers are less concerned about their personal financial situation this year
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


70%
66%
66%
64%
63%
62%
56%
54%
44%
32%
SHARE OF CONSUMERS WHO AGREE WITH THE FOLLOWING STATEMENTS
I have used “buy now, pay later” payment methods
I am looking to buy smaller quantities each time
I am spending more time searching online to find deals and discounts
I am spending more time shopping at different physical stores to find
deals and discounts
I am buying products from hypermarkets and discount stores, rather
than buying them from specialty grocery stores and convenience stores
I am buying cheaper private-label or low-cost brands over name brands
I go to the store and spend only what I have
I am delaying purchases of luxury items
I am cutting back on non-essential items
I am making fewer impulse purchases
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 2.
Consumers exhibit stringent behaviors in response to the cost-of-living crisis
Consumers continue to be 
stringent about their 
purchases
63% of consumers in our survey are buying private-label 
or low-cost brands over named brands this year, compared 
to 65% the previous year. As many as 70% of consumers 
say they are making fewer impulse purchases and 66% are 
cutting back on non-essential items, compared to 73% and 
69%, respectively, in the previous year (see Figure 2). Jeff 
Gennette, CEO of US retail group Macy’s, notes that, over 
the past several quarters, Macy’s customers have pulled back 
aggressively on discretionary purchases and have generally 
become more deliberate in their purchasing behaviors. 
“As we plan the remainder of the year and think about 
2024, we remain cautious of the pressures impacting our 
customers, especially at Macy’s, where around 50% of 
identified consumers have an average household income of 
$75,000 or under.” 5
9
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; Capgemini 
Research Institute, What matters to today’s consumer, January 2023; Capgemini Research Institute, What matters to today’s consumer, 
January 2022; Capgemini Research Institute, The great consumer reset: COVID-19 and the consumer products and retail consumer, 
November 2020. 
*Overall spending includes groceries and food supplies; household supplies; personal care products; over-the-counter healthcare 
products; furniture and furnishings; consumer electronics/white goods; apparel and accessories; at-home entertainment/
media; luxury products; takeaway food from restaurants; casual or fine dining; alcoholic beverages; tobacco; leisure travel; 
work-related travel.
FIGURE 3.
The share of consumers planning to cut discretionary spending has fallen in 2023
33%
32% 29%
25%
28%
37%
33%
35%
57%
53%
47%
58%
54%
44%
40%
SHARE OF CONSUMERS WHO PLAN TO REDUCE PURCHASES, OVERALL AND BY PRODUCT CATEGORY
Luxury products
Furniture and furnishings
Over-the-counter
healthcare products
Groceries and food
supplies
Overall spending*
November 2020                 November 2022                 November 2023
Consumers remain 
choiceful, particularly in 
discretionary categories 
Overall, 40% of consumers plan to cut spending across 
multiple categories, slightly lower than the 44% last year (see 
Figure 3). Consumers plan to cut spending on groceries (25%), 
over-the-counter (OTC) healthcare products (33%), furniture 
(53%), and luxury items (54%). CFO of US retailer Walmart 
John David Rainey comments: “At headline level, consumer 
spending has proven resilient but, below the surface, we 
continue to see signs that consumers remain choiceful, 
particularly in discretionary categories.” 6
10
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


64
%
expect retailers to alert consumers when 
brands start using lower quality ingredients/
raw materials without reducing the price
65
%
expect retailers to alert consumers when 
brands reduce the weight of a product without 
reducing the price
Consumers expect 
retailers to provide 
“shrinkflation” alerts 
Consumer expectations of retailers have increased; 65% 
expect retailers to alert consumers when brands reduce the 
weight of a product without reducing the price (a 
phenomenon known as “shrinkflation”) Carrefour, for 
example, now labels products to warn of this.7 64% expect 
retailers to alert consumers when brands start using lower-
quality ingredients/raw materials without reducing the price 
(so-called “skimpflation”). 
In line with the previous year’s expectations, 70% of 
consumers want more discounts on essential items and 67% 
want retailers to accept lower prices. 73% of consumers will 
be more loyal to companies that help them through this 
difficult time, and 71% of consumers plan to purchase more 
products/services from these companies. 
11
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


ONE IN FIVE CONSUMERS HAS 
ALREADY USED GENERATIVE AI 
IN SHOPPING
02
12
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


High consumer awareness of generative AI continues in 2023, 
with 86% of consumers saying they are aware of tools such as 
ChatGPT and DALL-E. We found that awareness of generative 
AI as a shopping tool is also high. 72% of consumers overall 
are aware of the use of generative AI in shopping experiences 
and 20% have used it already. 28% of consumers mentioned 
they are not aware of generative AI for shopping  
(see Figure 4).
Nearly 55% of Gen Z consumers have bought 
products recommended by generative AI tools
Among consumers who are aware of the use of generative 
AI in shopping experiences, and have already used it, 
66% are open to purchasing new products or services 
recommended by generative AI compared to 64% in April 
2023. The shopping experience of 55% of users has been 
notably enhanced by generative AI tools. Gen Z and Millennial 
consumers lead the pack, with 56% and 61%, respectively, 
believing that generative AI tools improve their user 
experience, as compared with 52% for Gen X and 43% for 
Boomer consumers. 
20%
33%
19%
28%
SHARE OF CONSUMERS WHO AGREE WITH THE STATEMENTS BELOW
I am aware of the use of generative AI in shopping 
experiences, and I have used it already
I am aware of the use of generative AI in shopping 
experiences, and I plan to use it in the future
I am aware of the use of generative AI in shopping 
experiences, but do not plan to use it myself
I am neither aware of nor have explored generative AI 
tools for shopping
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers
FIGURE 4.
One-fifth of consumers have used generative AI in shopping 
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Generative AI is transforming online purchase behaviors. 
Over half (52%) of users have replaced traditional 
search engines with generative AI tools for product 
recommendations (see Figure 5). Among these users, 
54% are men and 46% are women. Gen Z and Millennials’ 
preference for generative AI over traditional search engines 
for product/service recommendations are now at 54% and 
56%, respectively. 
A significant 52% of users have already acted on product 
recommendations made by generative AI tools, with 55% 
of Gen Z having bought products recommended by them, 
compared with 57% of Millennials. Among these users, 55% 
are men and 45% are women. 
German online retailer Zalando has launched a new fashion 
assistant, powered by ChatGPT, to enhance the consumer 
experience and improve consumer perceptions of the 
website. For instance, when a consumer enquires about 
suitable attire for a spring wedding in Spain, Zalando's 
fashion assistant can discern the formal nature of the event, 
anticipate weather conditions, and offer appropriate clothing 
GENERATIVE AI PREFERENCES BY AGE AMONG CONSUMERS, WHO ARE AWARE AND HAVE USED IT 
FOR SHOPPING
I have replaced traditional search engines with generative AI tools
for product/service recommendations
I have already bought products recommended by generative
AI tools
Global            Gen Z (Age 18–24)            Millenials (Age 25–40)            Gen X (Age 41–56)            Boomers (Age 57+)
52%
55%
57%
50%
52%
54%
56%
51%
37%
36%
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,299 consumers who are aware of 
the use of generative AI in shopping experiences and have used it already: 345 Gen Z consumers, 986 Millennial consumers, 635 Gen 
X consumers, 333 Boomer consumers.
FIGURE 5.
Generative AI is not just used by Gen Z
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


recommendations. The ultimate objective is to train this 
feature on consumer preferences, including favored brands 
and availability of products in their sizes, to deliver a more 
personalized product selection.8
Using a new chatbot based on OpenAI's ChatGPT-4 
technology, Carrefour’s online shoppers in France will be 
able to choose products based on their budget and food 
constraints or seek new menu ideas. The chatbot can also 
suggest anti-waste solutions for reusing ingredients and 
compose baskets based on specific recipes.9
Using a new Chatbot based on generative AI, Walmart’s 
online shoppers can compare and choose products, and 
receive recommendations based on their preferences 
and needs. It also lets customers try products virtually 
before buying. Walmart is testing this feature as part of its 
generative AI-powered search and shopping assistant.10
15
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers have a positive 
outlook on generative AI 
tools 
•	 A substantial 66% of users welcome product 
recommendations from generative AI.
•	 60% of users trust services and products  
suggested by generative AI.
More importantly, a substantial 59% of users seek 
personalized recommendations from generative AI that align 
with their personality (see Figure 6).
•	 55% of users seek advice in areas such as diet plans, 
make-up suggestions, and fashion combinations from a 
generative AI tool.
•	 58% of users say generative AI should be able to identify 
their brand and product loyalty, thereby recommending 
similar products.
GENERATIVE AI PREFERENCES BY AGE AMONG CONSUMERS, WHO ARE AWARE AND HAVE USED IT 
FOR SHOPPING
I would seek advice for my future shopping experiences from a
generative AI tool
I want generative AI to align with my current preferences
I am positively anticipating generative AI's ability to offer customized
fashion and home-décor recommendations 
I want generative AI to recognize my history with / loyalty to certain
brands and product types in order to suggest similar products
I would like a chatbot similar to ChatGPT from brands/companies
to ask questions and receive responses quickly
Global 
59%
58%
57%
57%
55%
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,299 consumers who are aware of 
the use of generative AI in shopping experiences and have used it already.
FIGURE 6.
Consumer preference for generative AI in different stages of the shopping experience
16
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,299 consumers who are aware of 
the use of generative AI in shopping experiences and have used it already.
FIGURE 7.
Consumer preference for generative AI tools for different tasks
SHARE OF CONSUMERS USING GENERATIVE AI TOOLS FOR DIFFERENT TASKS, WHO ARE AWARE AND 
HAVE USED IT ALREADY
42%
37%
36%
36%
36%
34%
33%
32%
31%
27%
Advertising collateral
Virtual try ons/make-up at home
Chatbot recommendations based on personal shopping history
Customized follow-up care and usage tips
Targeted advertising
Chatbot answering queries in real time
User-generated social media posts
Automated summary of product reviews
Tailored loyalty programs
Chatbot resolved post purchase queries
While consumers may not always be aware that the tools 
they use include generative AI, 42% of users have used it 
in a chatbot to resolve queries and many other tasks (see 
Figure 7).
60
%
of users trust services and products
suggested by generative AI
17
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


FIGURE 8.
Impact of generative AI on online shopping, for consumers who are aware and have used it already
(Continue on the next page...)
AWARENESS
Generative AI creates advertising
collateral
Chatbot answers queries in
real time
Targeted advertising
Tailored loyalty program
User-generated social media posts
PURCHASE
LOYALTY/ADVOCACY
Used by: Coca-Cola
Animated several classical art pieces for 
an advertisement1
Used by: Meraci
Employed an AI chatbot taking 
conversational input and follow-up 
questions about products4
Used by: Tesco
It uses data from various channels 
to create personalized promotions 
based on shopping behaviors5
Used by: GE Appliances
Flavorly AI generates dishes 
and combinations for 
customers based on what 
they’ve bought8
Used by: Google
Google Product Studio powered by 
generative AI empowers businesses of any 
size to create visual content tailored to 
their dynamic marketing requirements9
27%
29%
36%
42%
34%
40%
37%
45%
36%
43%
Sources: 
1. Forbes, “The amazing ways Coca-Cola uses generative AI in Art and advertising,” September 8, 2023.
2. Ecommerce News, “generative AI in Ecommerce: A look beyond texts,” July 3, 2023.
3. PYMNTS, “Luxury retailers try on AI to reduce returns,” June 16, 2023.
4. Modern Retail, “Retailers are using ChatGPT to help people pick what to buy,” April 27, 2023.
5. Analytics India, “How this company is redefining retail experience with generative AI,” May 5, 2023
18
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


CUSTOMER SUPPORT
Chatbot resolves post-purchase
queries
Used by: Macy’s
Employing an AI-powered shopping 
assistant to automatically answer queries 
about products and receive responses10
42%
49%
Automated summary of
product reviews
Customized follow-up care
and usage tips
POST-PURCHASE
Used by: Amazon
Offers concise summaries of 
reviews to improve CX6
Used by: Carrefour
Perfado AI-generated messaging 
to hyper-personalize the language 
for customers7
36%
42%
33%
40%
Chatbot recommendations based
on consumer queries
Virtual try-ons/make-up
at home
CONSIDERATION
Used by: Zalando
Fashion assistant can recommend 
products based on contextual 
clues2
Used by: Valentino
Autumn 2023 collection can be 
tried on virtually3
32%
40%
31%
39%
Share of people using generative AI tools for these tasks,
who are aware and have used it already
The satisfaction level of respondents with respect to generative AI performing these
tasks, who are aware and have used it already
6. Amazon, “How Amazon continues to improve the customer reviews experience with generative AI,” August 14, 2023.
7. Persado, “How motivation AI-Generated language helps Carrefour engage customers,” December 15, 2022.
8. Consumer Goods Technology, “GE Appliances and Google Cloud collaborate to create customized recipes using generative AI,” August 29, 2023.
9. PYMNTS, “Google turns product images into merchant sales using generative AI,” May 23, 2023.
10. CXOToday, “How generative AI is reshaping consumer insights and retail strategy,” November 1, 2023.
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,299 consumers who are aware of the use of generative AI in shopping experiences and have used it already.
19
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Key consumer challenges 
about generative AI
Extensive coverage of generative AI in the media means 
consumers are now more alert to the possibility of tools 
being used for unethical ends. 
•	 62% of consumers harbor concerns about generative 
AI producing false/misleading testimonials or reviews, 
compared with 30% in April 2023 (see Figure 9).
•	 The potential of generative AI to copy or clone competitors' 
product designs or formulas is a concern for 61% of 
consumers, compared with 27% in April 2023.
Source: Capgemini Research Institute, generative AI consumer survey, April 2023; N = 3,974 consumers who are aware of the generative AI 
tools and use them frequently; N = 1,247 (chatbots), N = 910 (gaming), N = 320 (search), N = 435 (text), N = 244 (generating synthetic data), 
N = 490 (video), N = 152 (images), N = 176 (audio); Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 
2,299 consumers who are aware of the use of generative AI in shopping experiences and have used it already.
FIGURE 9.
Using generative AI to provide false/misleading testimonials or reviews is one of the biggest worries for consumers 
KEY GENERATIVE AI CONSUMER CONCERNS, WHO ARE AWARE AND HAVE USED IT ALREADY
Lack of clarity on the sources used for training the generative
AI algorithms
Possibility of using deep fakes to create content without permission of the
involved individuals
Impersonation of individuals using generative AI to provide
false/misleading testimonials or reviews
Use of generative AI algorithms to copy/clone a competitor’s product
design/formula
Non-recognition/non-payment for artists/contributors whose creations
are used for training generative AI
Bias in the generative AI models leading to unrepresentative results
April 2023                      October–November 2023
30%
61%
33%
58%
27%
61%
30%
62%
25%
59%
25%
59%
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers also want generative AI tools to be created and 
distributed responsibly:
•	 A significant majority (70%) of users appreciate prior 
disclosure if their interaction will involve generative AI. This 
response has been consistent for some years: in 2018, 66% 
of consumers stated the same.11
•	 When interacting with organizations or brands via 
generative AI, 70% of users prefer the option to escalate to 
a human representative in case they are not satisfied while 
interacting via generative AI.
70
%
of users prefer the option to escalate to
a human representative in case they are not 
satisfied while interacting via generative AI
21
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


SOCIAL COMMERCE CONTINUES 
TO GROW DRIVEN LARGELY  
BY GEN Z
03
22
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Social commerce is picking 
up the pace
The global social commerce market was valued at 561billionin2021andisprojectedtoriseto6,341 billion by 2030, 
showing a CAGR of 31.1% in 2022–30.12
BookTok, a reading suggestion platform from Chinese tech 
company TikTok, has become highly influential, with over 180 
billion viewers at time of writing. BookTok helped in the sale 
of an estimated 20 million books in 2021, representing over 
2.4% of total book sales for the year and nearly half of the 
book purchases from social media in 2021.13
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers: 1,048 Gen Z 
consumers, 3,358 Millennial consumers, 3,586 Gen X consumers, 3,689 Boomer consumers.
FIGURE 10.
46% of Gen Z consumers have already bought products on a social media platform
SHARE OF CONSUMERS WHO HAVE BOUGHT A NEW PRODUCT/BRAND THROUGH SOCIAL MEDIA, BY 
AGE GROUP
24%
46%
35%
21%
10%
Boomers (Age 57+)
Gen X (Age 41–56)
Millenials (Age 25–40)
Gen Z (Age 18–24)
Overall
Overall            Gen Z (Age 18–24)            Millenials (Age 25–40)            Gen X (Age 41–56)            Boomers (Age 57+)
23
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers have already bought products 
via social media platforms 
Social commerce refers to shopping experiences that occur 
directly on a social media platform, including clicking a link on 
a social network that leads to a retailer’s product page with 
an immediate purchase option.14
Around one-quarter of consumers have bought a product 
via a social media platform: 41% of consumers from Spain; 
30% from the US; and 28% from Sweden. More purchases 
are made by households with children (36%) than households 
without children (17%).
As many as 46% of Gen Z consumers surveyed have made a 
purchase on a social media platform in the past year. Almost 
48% of US Gen Z (aged 18‒29) say they will do at least some 
of their year-end shopping on social media platforms such as 
TikTok or Instagram.15
Overall, Instagram (62%) and YouTube (62%) are the preferred 
purchasing platforms across generations of consumers, 
followed by Facebook (55%) and TikTok (44%). Gen Z 
consumers show a strong preference for Instagram (70%), 
TikTok (63%), and YouTube (58%) for their purchases, whereas 
Millennials primarily prefer to use Instagram (67%) and 
YouTube (63%)(see Figure 11). The most strongly preferred 
platforms for Gen X and Boomer consumers are YouTube, 
Instagram, and Facebook.
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,774 consumers who have purchased 
on social media in the past year, 481 Gen Z consumers; 1,176 Millennial consumers; 766 Gen X consumers; 351 Boomer consumers.
FIGURE 11.
Consumers prefer Instagram and YouTube as purchasing platforms
CONSUMERS' TOP THREE SOCIAL MEDIA PURCHASING PLATFORMS
Instagram 
             YouTube 
             Facebook 
             TikTok
62%
62%
55%
44%
63%
36%
58%
70%
67%
63%
52%
49%
59% 64%
65%
35%
52%
64%
66%
23%
Boomers (Age 57+)
Gen X (Age 41–56)
Millennials (Age 25–40)
Gen Z (Age 18–24)
Overall
24
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,774 consumers who have 
purchased on social media in the past year. 
FIGURE 12.
Apparel and accessories is the most popular purchase category via social media
CONSUMER PURCHASE PREFERENCES VIA SOCIAL MEDIA
Occasionally purchased (3 to 7 times in the past year) 
Frequently purchased (8 times or more in the past year)
Groceries and food supplies
Personal care products
Health and wellness products
Apparel and accessories  
44%
42%
38%
36%
18%
19%
20%
22%
In the past year alone, consumers have made products and 
services purchases through social media across categories. 
Among consumers who have purchased from social media, 
apparel (62%), health and wellness products (61%), and 
personal products (58%) are the categories in which they 
have most frequently purchased more than three times in the 
past year. It is interesting to note that 58% of consumers who 
have purchased on social media have purchased groceries 
through it in the past year (see Figure 12).
Of Gen Z consumers, 51% have occasionally purchased 
apparel and accessories via social media, as compared to 23% 
of Millennials.  
Consumers in the United States have frequently purchased 
(8 times or more in the past year) groceries and food supplies 
(32%), personal care products (31%), and apparel and 
accessories (26%) via social media, making more purchases 
through this channel than consumers in other geographies. 
25
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Why consumers prefer to buy on 
social media platforms
Around 46% of Gen Z consumers and 44% of Millennials are 
discovering products via social media. Over half (56%) of 
consumers who have bought on social media say they have 
accessed reliable reviews through their social media feeds. 
Consumers feel that social media helps accelerate purchase 
decisions. Over half (53%) of consumers who have purchased 
via social media say they have been influenced by feeds, 
stories, reels, lives shows, and influencers in making 
purchases.  
French personal care organization L’Oréal has been investing 
heavily in “live commerce,” a type of social commerce, in the 
Indonesian market. L’Oréal has 14 different studios that live-
stream the brand's products. 
How are social media platforms 
using social commerce?
Social media platforms are integrating shopping features 
to cater to the impulse purchase behavior of consumers, 
while brands are setting up virtual shops on such platforms. 
Many social media platforms are running beta testing of 
their shopping features and slowly expanding to reach global 
markets. 
Livestreaming sales in the U.S. has been estimated to reach 
$50 billion in 2023 and are expected to account for more than 
5% of total e-commerce sales in the U.S. by 2026.16 In the 
US, TikTok, Amazon, Walmart, Shopify, and YouTube are all 
getting in on the game. “People are excited by what you’re 
seeing from China, where you see really high conversion 
rates on some of these experiences, much higher than a 
regular website would have. You’re seeing potentially up to 
40% in some cases,” comments Daniel Debow, Vice-President 
of Product at Shopify, which launched live-shopping 
capabilities with YouTube in July 2022.17
26
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: 
Amazon Live Shopping
1. Estore factory, “Prime day 2023 breaks all the records, makes history,” August 1, 2023.
2. Economic Times, “Flipkart big billion days vs Amazon Great Indian Festival: Sale discounts, card deals, 
and other details,” October 5, 2023.
Twitter (Now X) Shop
3. Retail Dive, “Twitter tests Shops feature,” March 10, 2022. 
4. TikTok, “Guess the shop,” accessed October 20, 2022.
Facebook Shop
5. PYMNTS, “Facebook shops top 1 million stores, 250 million users,” March 19, 2021.
6. Sprout Social, “6 masterful examples of brands selling on Facebook Shops,” April 6, 2022.
FIGURE 13.
Integrating social to retail and retail to social 
Instagram Shop
• Over 1.63 billion, or 70% of monthly active users have shopped on Instagram
• Top brands such as Adidas (34.2 million followers), Sephora (21.2 million 
followers) and Target (5.3 million followers) have set up shop in Instagram shop
Amazon Live Shopping
•  Amazon Prime live day streams had more than 100 million views in the US and 
India, with simultaneous viewing peaking at 57,000
• For the Great Indian Festival, Amazon Live, introduced in India in 2022, will 
present over 1,000 streams, featuring more than 300 influencers across 
categories including tech, gaming, fashion, lifestyle, home, sports, and beauty to 
assist customers in making informed purchases
Twitter (Now X) Shop
• In November 2022 Twitter collaborated with Walmart to broadcast the first shoppable 
livestream
• Verizon (1.5 million followers) is involved in the testing phase, showcasing 11 products
Facebook Shop
• Meta is driving in-platform shopping on Facebook shops through in-app checkouts 
• Around 1 million users make purchases from the shops monthly
• Top brands such as Burberry, Adidas, Lacoste and John Lewis & Partners have set 
up shops on Facebook
Tik Tok Shops
• In September 2023 TikTok launched shops in the US, UK, and parts of South-east Asia
• In the US, >200,000 sellers have signed up
• Sephora has teamed up with TikTok to launch a joint content-creation program
Pinterest Business
• Pinterest has signed a multi-year agreement with Amazon to enhance its 
shoppable content, making Amazon Pinterest's first third-party advertising 
partner
YouTube Shops
• YouTube has partnered with Shopify to enable onsite checkout for its sellers
• In June 2023, YouTube launched its first shopping channel, in South Korea
Instagram Shop
7. Capital One shopping, “Instagram Shopping Statistics (2023): User & revenue growth,” March 8, 2023.
8. USA Today, “Sephora enables Instagram checkout for easy shopping without leaving the app,” June 24, 2020.
TikTok Shops
9. Tech Crunch, “TikTok Shop officially launches in the US,” September 12, 2023.
10. Retail Gazette, “Sephora teams up with TikTok to launch content creator programme,” March 14, 2023.
Pinterest Business
11. PYMNTS, “Pinterest inks deal with Amazon Ads to fuel shoppable content,” April 28, 2023.
12. Hoot suite, “The Pinterest shopping features you should know in 2023,” March 8, 2023.
YouTube Shops
13. Tech Crunch, “YouTube rolls out new shopping features, announces partnership with Shopify,” July 19, 2022.
14. Economic Times, “YouTube to launch its first official shopping channel in South Korea,” June 21, 2023.
27
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Social media influencers 
are impacting consumers’ 
product discovery and 
purchasing processes 
In the six months preceding November 2022, social media 
influencers were holding sway on the buying decisions of 
consumers. The current survey suggests that this trend 
continues. 
In November 2023 we found through our survey that 33% 
of consumers had discovered a new product/brand on social 
media in the preceding six months, up slightly from 32% 
last November. Further, 21% had learned of a new product 
or brand from a social media influencer and 15% of the 
consumers purchased the new product. 
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; Capgemini 
Research Institute, What matters to today’s consumer, January 2023.
FIGURE 14.
Social media influencers are still holding sway
Purchased that new product/brand in the past six months 
Learned of that new product/brand from a social media
influencer in the past six months
Discovered a new product/brand on social media in
last six months
32%
33%
22%
21%
16%
15%
November 2022                 November 2023
28
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Social media and influencers carry 
much more weight with Gen Z
As per our previous survey in November 2022, 61% of Gen Z 
consumers discovered a new product/brand on social media, 
and 60% say the same this year. In our current survey, 45% 
of Gen Z say that they learned of a product from influencers, 
and 32% say they have purchased the new product (see 
Figure 15).
Since 2021, US beauty product organization Estée Lauder 
has been focusing on TikTok influencers to capture the Gen 
Z audience. As per Estée Lauder’s brand-equity data, Gen 
Z’s purchase considerations have been steadily rising since 
mid-2022. This suggests that Gen Z’s willingness to purchase 
Estée Lauder products rose throughout the second half of 
2022 and into 2023.18
Influencers impact consumers’ buying preferences
We found that 51% of consumers who have purchased 
on social media prefer to seek purchasing advice from 
influencers, claiming they give a clear breakdown of factors 
to consider before making a purchase. 
Almost half of consumers who have purchased on social 
media (48%) prefer to buy products directly from an 
influencer based on their live recommendation and live 
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 1,048 Gen Z consumers.
FIGURE 15.
45% of Gen Z consumers learned of a new product/brand from a social media influencer
60%
45%
32%
IMPACT OF SOCIAL MEDIA ON GEN Z CONSUMERS
Purchased that new product/
brand in the past six months 
Learned of that new product/
brand from a social media influencer 
in the past six months
Discovered a new product/brand
 on social media in the past six months
discount offers. More than half of consumers (51%) also 
look for their influencers' social media presence to search 
for discounts and offers. Consumers who have purchased 
on social media (48%) feel a sense of belonging to their 
community through interacting with live events organized 
by influencers. 
29
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Celebrity and influencer 
brands are attuned to the 
consumer mindset
Celebrities and influencers with huge numbers of followers 
are launching their own brands. In the US, having gained 
traction through digital sales and sales partnerships with 
chains such as Ulta and Sephora, some celebrity brands 
are now establishing their own physical locations, with 
76% locating their shops in malls. US Celebrity brands are 
estimated to occupy more than 300,000 sq ft of physical 
retail space.19
•	 Among celebrity brands, Kate Hudson's Fabletics has the 
biggest physical presence, with 95 stores; 
•	 Drake's October's Very Own is next with 11; and 
•	 Sarah Jessica Parker's SJP Collection has 6. 
30
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; 1,048 Gen Z 
consumers; 3,358 Millennial consumers; 3,586 Gen X consumers; 3,689 Boomer consumers.
FIGURE 16.
45% of Gen Z consumers have bought a product from influencers and celebrity brands 
20%
45%
32%
17%
6%
SHARE OF CONSUMERS WHO HAVE BOUGHT A PRODUCT FROM INFLUENCERS AND CELEBRITIES
Boomers (Age 57+)
Gen X (Age 41–56)
Millenials (Age 25–40)
Gen Z (Age 18–24)
Overall
Théo Spilka, Global VP of Strategic Licensing and Business 
Development at Swiss fragrance company Firmenich, is 
optimistic about the recent influx of celebrity brands, 
specifically in the beauty category. “Things have come back 
in a more managed way and this has coincided with a very 
strong trend in beauty companies, where the celebrity will 
invest in the brand themselves.” 20
Celebrity beauty brand sales increased by 33% between 
2021 and 2022, with overall sales hitting $762 million in 2022 
alone. Since 2019, there have been 42 celebrity beauty brand 
launches, including four new launches for the current year to 
June.21,22
Consumers have already started buying 
from celebrity and influencer brands
Consumers across generations have started buying from 
celebrity and influencer brands. One-fifth  of consumers have 
bought products from such brands in the past year, with Gen 
Z (45%) showing the highest interest, followed by Millennials 
(32%)(see Figure 16).
31
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


In the past year alone, many consumers have already made 
purchases in various product categories from influencers and 
celebrity brands more than three times. For example, 45% of 
consumers have purchased personal care products three to 
seven times from celebrity and influencer brands in the past 
year (see Figure 17). 
Top categories that have been frequently bought (more than 
three times) by consumers, who have made purchase from 
celebrities last year, are personal care products (66%), apparel 
and accessories (63%), and groceries and food supplies (60%).
Celebrities and influencers take advantage of their follower 
bases to launch their brands and convert them into sales:
•	 Kylie Cosmetics smartly tapped into founder Kylie Jenner's 
300 million+ Instagram following and beauty industry 
connections to preview products and generate hype. 
Shoppable Instagram posts turned interest into sales. 
Kylie also partnered with mega influencers (including her 
sisters) to co-create products and advertise launches to a 
combined audience of 500 million+ followers.23
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,365 consumers who have bought 
from celebrity/influencer brands.
FIGURE 17.
Purchase preferences by product category for consumers who have bought from influencer and celebrity brands
CATEGORY-BASED PREFERENCE FOR CELEBRITY AND INFLUENCER BRANDS, ON THE PART 
OF CONSUMERS
Occasionally purchased (3 to 7 times in the past year)
Frequently purchased (8 times or more in the past year)
Furniture and furnishings
Luxury products
Alcoholic beverages
Casual or fine dining in restaurants
Household supplies
Groceries and food supplies
Apparel and accessories
Personal care products
45%
21%
43%
20%
34%
26%
39%
16%
37%
15%
31%
14%
31%
13%
31%
11%
32
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers trust and relate more with 
influencer and celebrity brands
Consumers across generations feel they can trust and 
relate to celebrity- and influencer-promoted brands. 54% 
feel connected with the celebrity/influencer through the 
transaction and 58% say that they are encouraged to buy 
products related to the celebrity/influencer’s field/expertise.
Over half (55%) say they trust the celebrity/influencers 
and this trust converts to willingness to buy from them. 
Moreover, 54% of consumers who bought from celebrity 
and influencer brands say that they prefer such brands to 
traditional brands, and 55% of such consumers trust that the 
celebrity/influencer brands will be of good quality.
Since April 2022, Shopify has been working to position itself 
as a go-to partner for influencers and celebrity brands. 
Drake Related, the brand of Canadian musician and five-time 
Grammy award winner, Drake, was one of the first brands 
to test Collective, Shopify’s native “shopdripping” tool. Fans 
were able to use the tool to buy Drake’s merchandise as they 
were leaving one of his concerts. Shopify’s collaboration with 
Drake represents a big shift from its traditional partnerships 
with brands and creators.24
45
%
of Gen Z consumers have bought products 
from influencer and celebrity brands in the 
past year
33
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


CONSUMERS ARE BECOMING 
MORE CONSCIOUS OF THEIR 
PURCHASING IMPACT 
04
34
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers across the world are becoming aware of the 
power of their purchasing and consumption decisions. This 
new class of conscious consumers, a group that wants to 
see change at global level through their public and private 
actions, demonstrates their consciousness regarding 
sustainability, price, food waste, and social justice, among 
other factors.
The majority of 
consumers still maintain 
a consistent demand for 
sustainable products 
especially Gen Z  
 
60% of consumers globally indicate that they have purchased 
products from organizations they consider to be sustainable. 
While this figure has fallen from 70% in 2020, Gen Z, at 
71%, has seen a rise across this period, showing a strong 
predilection for sustainable products (see Figure 18). 
PepsiCo has initiated a practical trial involving paper-based 
outer packaging as a sustainable alternative to traditional 
plastic wraps for its Walkers Baked snack multipacks. These 
modified multipacks are currently accessible in more than 
300,000 units at 800 Tesco stores in the UK. It is designed 
to encourage widespread recycling through conventional 
curbside recycling programs.25
Source: Capgemini Research Institute, Sustainability in Consumer Products and Retail survey, March 2020, N = 7,520 consumers: 
849 Gen Z consumers, 2,294 Millennial consumers, 2,182 Gen X consumers, 2,195 Boomer consumers; Capgemini Research 
Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers: 1,048 Gen Z consumers, 3,358 Millennial 
consumers, 3,586 Gen X consumers, 3,689 Boomer consumers.
FIGURE 18.
Gen Z consumers still want sustainable products
70%
60%
71% 71%
73%
65%
68%
68%
58%
54%
SHARE OF CONSUMERS ACROSS AGE GROUPS WHO BOUGHT PRODUCTS FROM ORGANIZATIONS THAT 
ARE PERCEIVED AS SUSTAINABLE
March 2020                         October–November 2023
Boomers (Age 57+)
Gen X (Age 41–56)
Millennials (Age 25–40)
Gen Z (Age 18–24)
Global
35
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 19.
Consumers are not comfortable purchasing products that are not sustainable 
51%
43%
38%
36%
36%
33%
33%
33%
32%
32%
32%
31%
30%
29%
28%
28%
27%
CONSUMERS DISLIKE FOR PRODUCTS THAT ARE NOT SUSTAINABLE, ACROSS CATEGORIES
Prescription 
medication
Household 
supplies
Groceries 
and food
 supplies
Over-the-
counter 
healthcare 
products
At-home 
entertainment
/Media
Personal 
care
 products
Apparel 
and
 accessories
Leisure 
travel
Consumer 
electronics
/white goods
Casual 
or fine 
dining in
 restaurants
Take-away 
food
from 
restaurants
Furniture
 and 
furnishings
Home 
improvement
 supplies
Alcoholic
 beverages
Work-relate
d travel
Luxury 
products
Tobacco
36
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


A further 61% of consumers felt brands, stores, and 
supermarkets should do more to reduce waste, and 57% felt 
disappointed in their efforts in 2022. More than half (58%) 
of these consumers increased spending with companies that 
focused on reducing waste in 2022. 
According to our current survey, brands that demonstrate 
transparent food-waste reduction practices receive support 
from 57% of consumers, and 71% of consumers consider 
retailer policies and initiatives as key drivers of the reduction 
of food waste. German discount supermarket chain Aldi has 
committed to achieving zero waste in operations by diverting 
90% of its waste from landfills through recycling, donation, 
and organic recycling programs by 2025, and to reduce food 
waste by 50% by 2030. To accomplish this, Aldi has rolled 
out non-food donation programs to nearly all its stores and 
distribution centers, expanded recycling and food-recovery 
initiatives, and has piloted and expanded composting 
initiatives.27
Sustainability is a more influential factor in purchase 
decisions for non-essential and luxury items
Around one-quarter (27%) of consumers are uncomfortable 
buying non-sustainable prescription medication, and 28% 
are uncomfortable purchasing non-sustainable household 
supplies and over-the-counter (OTC) health products, and 
non-sustainably produced grocery and food supplies. For 
luxury goods (43%) and non-staple items such as tobacco 
(51%), alcoholic beverages (36%), and work-related travel 
(38%), we observe an even higher percentage of consumers 
who are uncomfortable if their purchases are not sustainable 
(see Figure 19). The cost per product or service for the 
earlier mentioned categories are much higher than the 
remaining categories. German herbal liqueur manufacturer 
Jägermeister has announced a change in its outer packaging 
from solid board to recycled corrugated outers, which, it 
says, are particularly compatible with its highly efficient 
packing machines.26
Consumers are conscious of the impact of food waste
In 2022, 72% of consumers said they were conscious of their 
level of food wastage. This concern persists in 2023, with 69% 
voicing concern. As many as 71% recognize the contribution 
of food waste to environmental issues, and 73% believe that 
their behavior and choices on an individual level can help 
in addressing the issue. We found 67% of consumers want 
educational campaigns and awareness programs to address 
the issue of food waste. 
67
%
of consumers want educational campaigns and 
awareness programs to address the issue of 
food waste.
37
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Price remains the main 
purchasing factor for 
consumers, followed 
closely by trust
While consumers are changing their habits, price remains 
the primary motivator behind purchases. Forty-one% of 
consumers are increasing second-hand product consumption, 
and the same proportion are moving towards a freecycle 
model (donating products to friends/neighbors/community 
members or accepting products for free, thereby reducing 
waste and promoting reuse).28 However, 48% of consumers 
buy alternative, cheaper versions of name-branded 
products. Further, over half (51%) report that they are buying 
refurbished or imperfect products to get a better price.
Consumers across all age groups may be unwilling to meet high 
price points and expect to pay less for sustainable products. In 
2023, 40% of consumers have paid 5–10% more for sustainable 
products, down from 45% in 2020 (see Figure 20). 
The next two major concerns both relate to the validation and 
verification of sustainable goods, with 52% of respondents 
reporting insufficient information to verify sustainability 
claims, compared with 49% in 2020,29 and 50% reporting a 
lack of global standards for sustainability branding.
Another concern, reported by almost half the respondents, 
is that they are either unaware of how to differentiate 
sustainable products (43%), as compared with 38% in 2020, or 
they do not trust sustainability claims (46%, compared with 
44% in 2020).
38
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Sustainability in Consumer Products and Retail survey, March 2020, N = 4,779 consumers 
who have paid more for a sustainable product; Capgemini Research Institute, Consumer demand survey, October–November 2023, 
N = 4,307 consumers who have paid more for a sustainable product.
FIGURE 20.
Consumers are less willing to pay more for sustainable products than in 2020
20%
24%
20%
7%
7%
3%
3%
45%
40%
30%
SHARE OF ALL CONSUMERS WHO HAVE PAID MORE FOR A SUSTAINABLE PRODUCT   
October–November 2023
March 2020
≥20% more
15% to <20% more
10% to <15% more
5% to <10% more
1% to <5% more
Consumers need more information as awareness 
levels on sustainability remains low 
 
Nevertheless, in many respects, current levels of awareness 
of the sustainability impact of consumer purchases remain 
low:
•	 In 2020, 61% of consumers were unaware of the water 
footprint of the production of a pair of jeans (7,500 liters in 
2020); in 2023, 57% are unaware, confirming that the issue 
persists. 
•	 In 2020, 78% were unaware of the water footprint of a bar 
of chocolate (1,000 liters); currently, 70% are unaware.
•	 Only 42% of consumers were aware that annual milk 
consumption causes CO2 emissions equivalent to those 
produced by 1,140 km of driving a vehicle.
•	 56% of consumers state they will switch to a sustainable 
product if they receive comprehensive information about 
its environmental impact.
Ahold Delhaize USA is launching its HowGood label program 
to provide product-sustainability ratings and traceability. 
Other programs include Champions 12.3, an initiative with 
multiple global partners focused on reducing food waste. 
Another is the U.S. Food Loss and Waste 2030 Champions 
program, run in partnership with the United States 
Department of Agriculture (USDA) and the United States 
Environmental Protection agency (EPA).30
39
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


KEY INFORMATION THAT 
CONSUMERS REQUIRE IN ORDER 
TO ACT MORE SUSTAINABLY 
 
63% of consumers want brands to play an active role in their 
education around sustainable products and 55% believe that 
the greater a brand’s sustainability effort, the more positive 
the consumer perception of that brand.
In terms of obtaining this information, 46% support the 
inclusion of detailed labels and scannable QR codes on 
product packaging that provide carbon, water footprint, and 
product recyclability attributes (see Figure 21). 
50%
48%
46%
51%
47%
51%
47%
45%
41%
50%
46%
45%
39%
55%
KEY PRODUCT ATTRIBUTES, AS CITED BY CONSUMERS
Will you switch to a more sustainable
product based on this information?
Do you want to see this
information through a QR code?
Amount of waste generated during manufacturing 
Environmental impact of the packaging 
Social impact of the product
Impact on water resources
Impact on air
Carbon-neutral certified products
Impact on biodiversity
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 21.
Consumers want product information relating to deforestation, impact on water resources and air quality
63
%
of consumers want brands to play an active
role in their education around sustainable 
products
40
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 22.
Consumers consider multiple important attributes for grocery purchasing decisions
45%
46%
40%
40%
43%
38%
49%
52%
52%
57%
45%
45%
49%
49%
57%
69%
RELATIVE IMPORTANCE OF PRODUCT ATTRIBUTES WHEN SHOPPING FOR GROCERIES
I wish to see this data via a scannable QR code                 Important attribute
Price
Organic sourcing
Information on the environmental impact of the product
Locally produced products
Sustainable packaging
Lab-grown meat or plant-based meat substitutes
Company’s engagement with local communities
 or charitable activities
Certifications like Fair Trade, Organic, or B Corp influence
 my trust in a product and my willingness to buy it
Albert Heijn, the largest Dutch supermarket chain, is piloting 
a “true-pricing” initiative at three of its AH to-go convenience 
stores. When consumers buy a self-service cup of coffee in 
Groningen, Wageningen, or Zaandam, they’ll see two prices: 
the standard retail price and the true price. The latter factors 
in CO2 emissions, water use, resource consumption, and labor 
conditions related to the production of coffee, cow’s milk, 
and oat milk.31 Highlighting a few consumer preferences 
(see Figure 22), we found that despite the focus on buying 
responsibly price is still by far the most important influencing 
factor on purchasing decisions:
•	 57% of respondents value local production products as 
a product attribute, and 52% want to see this data via a 
scannable QR code.
•	 52% of respondents consider sustainability of packaging 
(e.g., eco-friendly, biodegradable) as an important product 
attribute, and 49% want to see this data via a scannable QR 
code.
41
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


IN 2023 BOTH IN-STORE 
AND ONLINE SHOPPING 
HAVE INCREASED
In November 2023, 66% of consumers said they had interacted 
significantly with physical stores, up from 61% in November 2022 as 
compared to 36% who shopped online in November 2023, up from 
33% in November 2022.
66
%
of consumers said they had interacted
significantly with physical stores, up from 61% 
in November 2022
42
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; 
Capgemini Research Institute, What matters to today’s consumer, January 2023; Capgemini Research Institute, What 
matters to today’s consumer, January 2022.
Note: The question asked was “Please indicate your frequency of using physical stores when shopping with retailers. 
Please rate on a scale of 1 to 7, where 1 = very low interaction and 7 = very high interaction.” 
FIGURE 23.
Consumers' interactions with physical stores and online is gradually increasing
41%
67%
61%
66%
38%
33%
36%
34%
% OF CONSUMERS SHOPPING AT PHYSICAL STORES AND ONLINE WITH RETAILERS
November 2023
November 2022
November 2021
November 2020
Physical stores
Online
As in 2022, preference for in-store shopping increases with age: 
•	 72% of Boomers (aged 57–75), up from 69% in November 
2022, say their level of in-store interactions is high today, 
compared with only 56% of Gen Z (aged 18–24), up from 45% in 
November 2022.
Our 2022 research revealed that consumers spread their 
purchases across physical and online channels, a trend that 
continues in 2023. In November 2022, 56% of grocery shoppers 
said they go to the store to purchase the bulk of their groceries, 
supplementing this with small online orders as required. In our 
November 2023 survey, a similar percentage of consumers (51%) 
say the same. 
43
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


DELIVERY AND FULFILLMENT 
CONTINUE TO TAKE PRECEDENCE 
OVER IN-STORE EXPERIENCES
05
44
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Grocery shoppers place greater importance on delivery and 
fulfillment in 2023 as they did last year:
•	 43% of consumers say that delivery and fulfillment are 
the most important factors when shopping for groceries, 
compared with 41% in November 2022.
•	 39% say the same for in-store experiences, up from 33% in 
November 2022.
Health and beauty shoppers:
•	 Similarly, 41% of consumers say that delivery and 
fulfillment are the most important aspects of shopping 
for health and beauty products, up from 39% in November 
2022. 
•	 40% say the same for in-store experiences, up from 34% in 
November 2022. 
Consumers’ willingness to pay for fast delivery has 
increased from last year  
In November 2022 and November 2023, consumers were 
asked what percentage of their order value they would 
be willing to pay for certain delivery speeds and services, 
assuming an average order bill of $30. Across all shoppers in 
November 2023, consumers said they would be willing to pay 
6% for two-hour delivery, up from an average of 4% among 
all consumers in November 2022. This trend is consistent 
across key demographic segments (see Figure 24). 
Amazon’s Prime Air will offer air delivery within 60 minutes to 
consumers in California.
Likewise, Walmart sees delivery growth outpacing pick-up 
growth with sub-3-hour and sub-1-hour delivery segments 
showing the fastest increases in uptake.32
45
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers: 1,048 Gen Z 
consumers, 3,358 Millennial consumers, 3,586 Gen X consumers, 3,689 Boomer consumers; 4,096 consumers with children in their 
household, 7,588 consumers without children in their household; 5,097 urban consumers, 4,936 suburban consumers, 1,648 rural 
consumers; Capgemini Research Institute, What matters to today’s consumer, January 2023.
FIGURE 24.
Shopper willingness to pay for two-hour delivery is up from 2022 
4%
6%
6%
9%
5%
8%
4%
6%
3%
5%
5%
8%
4%
6%
4%
7%
6%
4%
4%
6%
AVERAGE % OF ORDER VALUE SHOPPERS ARE WILLING TO PAY FOR TWO-HOUR DELIVERY, ACROSS 
CONSUMER SEGMENTS
Rural
Suburban
Urban
Without 
children in
 household
With 
children in
household
Boomers
Gen X
Millennials
Gen Z
Overall
November 2022                 November 2023
46
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


In our current research, across all consumers, 7% is the 
average they would be willing to pay for 10-minute delivery, 
compared with 4% in November 2022 (see Figure 25). The 
increase may reflect a desire to absorb inflation-driven 
prices for convenient service, even during an economically 
difficult period. 
The key trends by age, location, and delivery satisfaction 
largely remain the same as last year:
•	 On average, Gen Z consumers are willing to pay 10% of the 
order value for 10-minute delivery, compared to 7% overall 
•	 Willingness to pay for fast delivery decreases with age 
•	 Urban shoppers are more willing to pay than suburban and 
rural shoppers
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; 1,048 Gen Z 
consumers, 3,358 Millennial consumers, 3,586 Gen X consumers, 3,689 Boomer consumers; 4,096 consumers with children in their 
household, 7,588 consumers without children in their household; 5,097 urban consumers, 4,936 suburban consumers, 1,648 rural 
consumers; Capgemini Research Institute, What matters to today’s consumer, January 2023.
FIGURE 25.
Gen Z shoppers are willing to pay the most for 10-minute delivery
4%
7%
6%
10%
5%
9%
4%
7%
3%
5%
5%
9%
4%
7%
4%
8%
7%
4%
4%
6%
AVERAGE % OF ORDER VALUE SHOPPERS ARE WILLING TO PAY FOR 10-MINUTE DELIVERY, ACROSS 
CONSUMER SEGMENTS
Rural
Suburban
Urban
Without 
children in
 household
With 
children in 
household
Boomers
Gen X
Millennials
Gen Z
Overall
November 2022                 November 2023
47
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers’ in-store expectations 
 
Consumers expect a level of ease while shopping in-store, 
including the ability to try new products in-store, availability 
of in-store sustainability stations, and for technology in-store 
to offer the same level of interaction as an app (see Figure 
26). 
Stockouts are a concern 
for many consumers
47% of retail and 38% of consumer product organizations 
expect stockouts/product shortages in the 2023 holiday 
season, and nearly 40% of organizations expect late 
deliveries due to import delays.33 While organizations employ 
a number of demand forecasting and demand-planning 
tools, seasonal stockouts and product shortages could still 
occur. Stockouts or poor substitutions could lead to loss of 
consumer trust, particularly in industries such as groceries. 
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; Capgemini Research 
Institute, What matters to today’s consumer, January 2023.
FIGURE 26.
In-store curated recipes and other content is one of the most important attributes for consumers while shopping for groceries
30%
36%
30%
35%
28%
32%
IMPORTANT IN-STORE SERVICE ATTRIBUTES FOR CONSUMERS WHEN SHOPPING FOR GROCERIES
Ability to dine in at the 
grocery store
In-store culinary lessons 
In-store curated recipes 
and other content 
'November 2022                 'November 2023
48
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers are concerned they will not be able to 
obtain the products they require or want
Given the ongoing unreliability of supply chains, many 
consumers are still concerned about the medium-term 
availability of essential products. In November 2023, 40% 
(41% in 2022) of consumers said that they were highly 
concerned regarding the potential unavailability of groceries 
and food supplies, and 39% (35% in 2022) voiced the same 
concerns in relation to prescription medication (see Figure 
27). 
Changes in consumer shopping behavior in response to 
stockouts:
•	 In the event of a preferred product becoming unavailable, 
most consumers (60%) prefer to buy a similar product from 
a competing brand.
•	 Additionally, 55% say that they have bought an item of 
the same weight/size made by a different brand, at a 
lower price.
Consumer goods companies are increasingly giving their 
retail partners more visibility of inventory levels, a powerful 
data insight that they can use across their own supply chains, 
as well as convenience features that expedite processes. 
Unilever, for example, offers the Shikhar app, which allows 
Unilever’s small-scale retail partners (or Kirana stores) the 
opportunity to connect directly with Unilever sellers and 
place orders 24/7.34
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 27.
Consumers are most concerned about the unavailability of essential products
% OF CONSUMERS CONCERNED ABOUT PRODUCT UNAVAILABLITY
Highly concerned                 Somewhat Concerned                 Slightly concerned                 Not at all concerned
Luxury products
Furniture and furnishings
Home improvement supplies
Consumer electronics/white goods
Apparel and accessories
Personal care products
Over-the-counter healthcare products
Household supplies
Prescription medication
Groceries and food supplies
15%
15%
15%
55%
17%
20%
22%
41%
18%
22%
23%
37%
19%
24%
24%
34%
19%
23%
22%
36%
29%
24%
20%
27%
29%
26%
21%
23%
32%
25%
20%
24%
39%
23%
19%
19%
40%
23%
19%
18%
49
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


HOW BRANDS AND RETAILERS 
CAN MANAGE AND ADAPT TO 
SHIFTS IN CONSUMER BEHAVIOR
06
50
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Adapt to compete 
Brands and retailers use generative AI tools to 
become more consumer-centric  
There is no doubt that 2023 has been the breakthrough year 
for generative AI – and this was evident in its use for shopping 
across a range of categories.  Already 20% of consumers 
globally and 27% of US consumers have used generative AI as 
part of their shopping for products or services in 2023, and 
the evidence is this trend will accelerate in 2024. 
Indeed, we found 47% of Gen Z and Millennials would like a 
chatbot with features such as ChatGPT to facilitate asking 
questions and to receive responses quickly. In fact, 42% of 
Millennials would seek advice on future shopping experiences 
from generative AI tools based on their purchase history and 
loyalty to products. 
We also found evidence that brand-owners and retailers 
recognize that generative AI tools provide a seamless, 
customized shopping experience that will become the 
new floor of consumer expectations going forward. Of 
the surveyed retail organizations, 93% say generative AI 
is a topic for boardroom discussion for them, and 83% of 
retail organizations agree that generative AI can be used 
to improve customer service by providing automated  
and personalized support. We found that 62% of retail 
organizations have established a dedicated team and budget 
to integrate generative AI into future product/service 
development plans. For instance, 63% of organizations have 
started pilots for the use case “Efficient, self-optimizing 
real-time customer-service chatbots,” and 11% have already 
implemented the use case.35
A good example of this is Hopla, the AI chatbot that 
Carrefour.fr has integrated into its online platforms,  Hopla 
enhances the consumer shopping experience  by providing 
a range of consumer benefits from personalized product 
recommendations, budget-friendly shopping assistance, and 
menu ideas.36 
Generative AI can also help drive cost out for retailers who 
are increasingly operating on tight margins.  79% of retail 
organizations say the use of generative AI  can help improve 
internal operations and enhance facility maintenance. 62% 
of retail organizations expect benefits of more than 10%, 
within three years, in terms of an increase in operational 
efficiency and workflow automation. Retail organizations are 
prioritizing the use of Gen AI in their logistics function like 
route optimization (55%) and in operations management and 
supply chain optimization (45%).37
Wendy’s, an Americal fast food chain is developing FreshAI – a 
generative AI automated ordering system in drive-throughs, 
to im-prove operational efficiency and reduce errors in food 
ordering and delivery.38
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Unlock channel growth
Leverage social as both a feeder channel and a sales 
channel in its own right
The research shows social media plays an increasingly 
important role in discovery across all demographics and 
shopper journeys.  Almost 40% of young people go to 
TikTok or Instagram when looking for something like a 
place for lunch.41 Whereas 33% of consumers surveyed 
have discovered a new product or brand on social 
media in the last six months. This is already significant 
but becomes even more so among Gen Z(60%) and 
Millennials (45%).
Trust in the honesty of product reviews on social is also 
significantly high; 40% of Gen Z and 40% of Millennial 
consumers feel they get to know honest reviews in 
social media feeds. 
There is also strong evidence that brand presence on 
social media  is increasingly driving traffic to brand 
platforms and/or partner retailers. 42% of Gen Zs and 
37% of Millennials claim that they are influenced to 
purchase a product by social media advertisements.  
Sephora has recently launched gamified experience 
Leverage technology to reduce cost for consumers
In order to keep pace with consumer preferences and, more 
importantly, look to reduce overall in-store costs, brands and 
retailers are re-imagining physical stores. Identifying and 
adopting new and innovative technological solutions will be a 
critical enabler of this shift. 
Retailers can embed Internet of Things (IoT) sensors 
throughout a store’s tech and standard equipment (such as 
coolers and freezers) to remotely detect and even predict 
maintenance events before they disrupt store operations. 
These tech-enabled tools help to minimize the labor required 
for routine maintenance checks and also increase food safety.
Walmart uses sensors and IoT applications to monitor the 
temperature of individual refrigerators and the general 
status of equipment to take proactive measures and prevent 
breakdown. It also utilizes IoT sensors to control remotely its 
heating, ventilation, and air conditioning (HVAC) systems in 
stores, thereby reducing energy consumption and utility costs 
without negatively impacting the consumer experience.39 
US consumer goods multinational P&G boosted sales and 
revenue by improving product visibility and accessibility using 
artificial intelligence (AI). The AI tools analyze consumer 
behavior and store layout to determine the most effective 
product placement.40
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


through a feature called "Beauty Insider Challenge" 
in its Beauty insider program, members-only mobile 
and online social platform, appealing to the Gen Zs 
more. Customers are rewarded with bonus points for 
completing the challenges with tasks to drive instore 
traffic like buy-online, pick-up in-store, trying Sephora’s 
in-store shade-matching tool, Color iQ along with other 
tasks.42
Consider social commerce as a  sales channel in its 
own right, especially for reaching Gen Z audiences
Social platforms such as TikTok and Instagram are not just 
for product discovery but are also turning into preferred 
platforms for purchase. 46% of Gen Z consumers surveyed 
have already made a purchase on social media platforms in 
the past year across multiple categories (including groceries). 
Carrefour has partnered with Brut to form social commerce 
company Brutshop, an online platform through which 
users will be able to make purchases during events live-
streamed on social networks. In France, 60% of Carrefour 
consumers say they are interested in live-shopping services. 
Commenting on the partnership, Elodie Perthuisot, Carrefour 
Group's Executive Director of e-Commerce, Data, and Digital 
Transformation, said: “By pooling our retail and social 
media strengths, our aim is to create the most powerful 
social commerce platform on the French market. This new 
community shopping experience will generate growth and 
value for both our companies.” 43
People buy from people:  Brands and retailers  
increasingly tap into the power of influencers with 
specially designed programs for story-selling
2023 appears to be the year when brands have flipped from 
a reactive use of influencers to a proactive use of brand 
ambassadors. In the past few years, micro influencers44 
have been attracting consumer attention with high quality 
content and user interactions. Although macro influencers45 
have more reach, micro influencers are often better able to 
connect with a targeted audience. Finding authentic brand 
ambassadors from these communities and inviting them to 
share their real-life stories on brand platforms/promotions 
has been particularly salient in 2023. Of the surveyed 
consumers, 82% are highly likely to follow a recommendation 
made by a micro-influencer.46 Brands are creating specialized 
creator and influencer programs to bring influencers on 
board for their product promotions:
•	 Walmart has launched Walmart Creator platform, which 
aims to build features and experiences to support creation 
and publishing of content. “We know our consumers are 
inspired by the content and stories they see from their 
favorite influencers in their social feeds every day,” 
enthuses William White, CMO, Walmart US. “This next step 
in our strategy will help fuel inspiration for our consumers 
by connecting their favorite creators directly with our 
brand and the brands they love at Walmart.” 47 
•	 Yeti, who make quality coolers for a range of outdoor 
pursuits, dedicate a third of their website to Stories, in 
which brand ambassadors relate their real-life experiences 
across a range of use cases from angling, rodeo, barbecues, 
through to snowboarding.  Together with the community 
engagement tools, such as their award-winning 2023 Year-
in-Preview planner, these authentic stories create a strong 
basis for trust and loyalty and are credited with fueling 
much of Yeti’s double-digit growth through the past 5 years.
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Lead with purpose
Reduce food waste to help combat the cost-of-living 
crisis
Food waste is one of the biggest problems that we, as a 
global community, are facing. It is estimated that around one-
third of all food produced globally is wasted every year.48 This 
is not only a huge economic loss but also a major contributor 
to greenhouse gas (GHG) emissions. 
Advances in AI technology can help reduce food waste by 
identifying and resolving issues early. Retailers can scan and 
identify produce that would normally be disposed of, but 
which is still edible. AI also allows retailers and restaurants 
with limited resources to manage their stock levels 
effectively. Retailers can also nudge consumers to modify 
their shopping behaviors to reduce food wastage.
Brands and retailers have turned to technology to boost 
their food-waste initiatives. Supermarket Lunds & Byerlys 
offers employees the ability to scan and weigh food before 
it is added to the grocer’s deli food bars and again before the 
food is thrown away. Albertsons has deployed fresh-food 
optimization technology on an AI-driven platform across its 
entire store network, with the goal of achieving a significant 
reduction in the company’s food waste by 2030.49
Educate consumers on the sustainability impact of 
their shopping 
Society requires that consumers achieve greater awareness 
of the impact of their purchase behaviors; 52% of consumers 
say that they do not possess the necessary information 
to verify sustainability claims, and half report a lack of 
global standards of sustainability branding as an issue. In 
this context, retailers and consumer product firms can 
foster awareness of the sustainability, climate change, 
and nutrition impact of consumer purchase decisions. This 
can be facilitated by multiple mediums, such as in-store 
sustainability stations, which 38% of consumers rated as 
a desirable in-store attribute. Around 45% of consumers 
want an accurate idea of the environmental footprint of a 
prospective purchase made available to them via a QR code. 
In December 2022, L’Oréal launched its Product Impact 
Labeling system in the US (and in Canada in the following 
year). The initiative provides consumers with transparent 
scientific information about a product’s environmental and 
social impact, and compares this with other L’Oréal products 
in the same category. Products are ranked on a scale from A 
to E that considers 14 planetary-impact factors, such as GHG 
emissions, water scarcity, ocean acidification, and impact 
on biodiversity, measured at every stage of the product’s 
lifecycle, from ingredients to packaging, manufacturing 
process, transport, and ultimately use and disposal. 
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


This initiative was first launched in France in 2020. “L’Oréal’s 
Product Impact Labeling system is a core component of 
the L’Oréal for the Future program, which outlines our 
sustainability commitments for 2030. Its roll-out in the 
US will help change consumer behavior, accelerating the 
beauty industry's progress toward greater sustainability,” 
emphasizes Marissa Pagnani McGowan, CSO for North 
America. “This comes at a time when sustainability is 
increasingly a focus for US consumers. Using principles of 
environmental science, this tool will empower consumers, 
support more informed purchasing decisions, and foster a 
culture of greater brand transparency.” 50, 51
55
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


The cost-of-living crisis continues to dominate consumer sentiments in 2023 and 
looks set to remain high on their list of concerns for the foreseeable future. However, 
the impact in many geographies has eased from 2022 and consumers are interacting 
with stores and online channels more than they did last year, and are willing to pay 
more for faster delivery and fulfillment. Today, consumers are willing to explore new 
technological avenues in their shopping journey and want to use generative AI tools for 
search, recommendations, and support. Social commerce is a key channel, particularly 
in terms of its appeal to Gen Z consumers. With evolving technology preferences, 
consumers are becoming more conscious of their sustainability impact, demanding 
more sustainable options and information before making purchase decisions. 
Conclusion
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Research  
methodology
We surveyed 11,681 consumers over the age of 18 in 11 
countries across North America, Europe, and Asia–Pacific. 
The global survey took place in October and November 
2023. The demographic details of the consumers are below.
10%
9%
29%
30%
29%
28%
28%
31%
34%
33%
32%
9%
November 2021          November 2022          November 2023
Boomers,
age 57–75
Gen X, age
41–56
Millennials,
age 25–40
Gen Z, age
18–24
52%
52%
51%
47%
48%
47%
November 2021          November 2022          November 2023
Man
Woman
CONSUMERS BY AGE GROUP
CONSUMERS BY GENDER IDENTITY
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


43%
43%
41%
42%
42%
16%
15%
14%
44%
November 2021          November 2022          November 2023
Rural area
Town/suburban
 area
Large city/
urban area
23%
34%
17%
34%
20%
22%
21%
16%
18%
19%
5%
5%
6%
2%
2%
3%
36%
18%
November 2021          November 2022          November 2023
6+
5
4
3
2
1
3%
2%
43%
42%
30%
32%
15%
4%
3%
2%
5%
16%
45%
2%
November 2021          November 2022          November 2023
32%
15%
5%
2%
Other
Doctoral or professional degree
(e.g., PhD, EdD, MD, JD/LLD)
Postgraduate degree
(e.g., MA, M. Tech, MBA)
Undergraduate degree
(e.g., BSc, B. Tech)
High school/secondary school
Elementary school
CONSUMERS BY NUMBER OF 
PEOPLE IN HOUSEHOLD
CONSUMERS BY SELF-IDENTIFIED 
RESIDENTIAL AREA
CONSUMERS BY HIGHEST 
EDUCATIONAL LEVEL
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


November 2021          November 2022          November 2023
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
9%
United
States
United
Kingdom
Sweden
Spain
Netherlands
Japan
Italy
Germany
France
Canada
Australia
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
4%
3%
46%
45%
12%
14%
21%
14%
6%
7%
11%
19%
41%
3%
November 2021          November 2022          November 2023
13%
21%
11%
6%
Full-time student
Unemployed
Retired
Self-employed, consultant,
or freelancer
Part-time employed
Full-time employed
15%
14%
14%
November 2021          November 2022          November 2023
Prefer not
to say
$100,000–
149,999+60,000–
99,00020,000–
59,999Lessthan20,000
23%
22%
23%
16%
14%
12%
1%
6%
45%
51%
43%
CONSUMERS BY EMPLOYMENT
CONSUMERS BY COUNTRY OF 
RESIDENCE
CONSUMERS BY ANNUAL 
HOUSEHOLD INCOME
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; Capgemini Research Institute, What matters to today’s 
consumer, January 2023, N = 11,300 consumers; Capgemini Research Institute, What matters to today’s consumer, January 2022, N = 10,179 consumers. 
*The study findings reflect the views of the respondents to our online questionnaire for this research and are intended to provide directional guidance. 
59
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Appendix
 
• Easy and clear return policies
• Ability to specify delivery time slot
• In-home delivery (e.g., front entryway, garage)
• Order online with same day home delivery
• Contactless checkout (i.e., self-checkout, no contact 
   with store employee required)
• In-store curated recipes and other content (e.g., meal
   planning tips, ingredient suggestions) 
• Ability to dine in at the grocery store
• In-store culinary lessons on how to cook healthy meals
  for less money
• Contactless checkout (i.e., self-checkout, no contact with store
   employee required)
• In-store makeup lessons/workshops
• Ability to personalize the product
• Technology to help with your decision (e.g., virtual try-on,
   skincare analysis)
Delivery and fulfillment-related services – Grocery and health and beauty
In-store experiences – Grocery 
In-store experiences – Health and beauty
• One-click addition to online shopping cart (based on past purchases)
• Order in store with same day home delivery
• Order online, pick up curbside/at store
• Order online as a subscription/on a recurring basis
SERVICE ATTRIBUTES TESTED AMONG GROCERY AND HEALTH AND BEAUTY SHOPPERS:
Source: Capgemini Research Institute analysis.
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


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and ecommerce convergence trends bring growth 
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their friends,’ expert says,” October 17, 2023.
16.	 CNBC, “Livestream shopping booms as small businesses 
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for Walkers Baked multipacks,” March 13, 2023.
26.	 Packaging World, “McDonald's tests strawless lids 
in U.S., Nestlé Brazil packs condensed milk in pouch, 
Jägermeister swaps secondary packaging to corrugated,” 
April 4, 2023.
27.	 Aldi Corporate Sustainability, “Waste and recovery,” 
accessed on Nov 10, 2023.
1.	 Bureau of Economic Analysis, Personal Income and 
Outlays, October 27, 2023.
2.	 The New York Times, “Why are food prices so high in 
Europe?” May 30, 2023
3.	 Reuters, “French consumers forced to cut back on 
essentials, Carrefour CEO warns,” August 29, 2023. 
4.	 CNBC, “Walmart and Target face similar problems – but 
only one is thriving,” August 17, 2023.
5.	 AP News, “Macy’s had to discount spring goods to entice 
cautious consumers and sees more warning signs ahead,” 
August 22, 2023.
6.	 FT, “Tesco chief sees ‘encouraging’ signs that inflationary 
pressures are easing,” June 2023. 
7.	
 The Guardian, “Carrefour puts ‘shrinkflation’ price 
warnings on food to shame brands,” September 14, 2023.
8.	 Ecommerce News Europe, “Generative AI in ecommerce: 
A look beyond texts,” July 3, 2023. 
9.	 ESM, “Carrefour France introduces AI-powered online 
shopping chatbot," June 15, 2023.
10.	 FoxNews, “How Walmart is using AI to change how you 
shop forever," October 16, 2023.
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


28.	 FREESTUFF4U, “The Freecycle Network: A remarkable 
movement transforming the UK’s waste and consumption 
landscape,” April 15, 2023.
29.	 Capgemini Research Institute, How sustainability is 
fundamentally changing consumer preferences, 2020.
30.	 Supermarket News, “Ahold Delhaize USA is winning at 
food waste,” June 30, 2023.
31.	 Trend Watching, “For coffee to go, Dutch supermarket 
Albert Heijn pilots voluntary higher prices that cover 
hidden costs,” April 20, 2023.
32.	 Guggenheim Securities Analyst Report, “WMT: 
Decent appetite for saving money and living better,” 
October 2023.
33.	 Capgemini Research Institute, Navigating the future: 
Building resilient and efficient supply chains in the 
consumer products and retail industry, November 2023.
34.	 Unilever “Navigating the future: The in-house developed 
app that’s transforming a traditional sales model,” April 
11, 2023.
35.	 Capgemini Research Institute, “Harnessing the value of 
generative AI: Top use cases across industries,” July 2023.
36.	 Carrefour, “Carrefour integrates open AI technologies 
and launches a generative AI-powered shopping 
experience,” June 8, 2023.
37.	 Capgemini Research Institute, “Harnessing the value of 
generative AI: Top use cases across industries,” July 2023. 
N = 1,000 organizations
38.	 Wendys,” Leading Drive-Thru Innovation with Wendy’s 
FreshAI”, December 11, 2023
39.	 Retail TouchPoints, “IoT in retail: Top 5 use cases and real-
life examples,” July 17, 2023
40.	 InData Labs, “AI in FMCG: Top use cases,” June 29, 2023.
41.	 The Bottom Line, “Social Media as Search Engines: What 
Does It Mean for Your Business?” April 2023
42.	 Sephora adds gamified experience to Beauty Insider 
loyalty program in appeal to Gen Z", Sep 27, 2023
43.	 European Supermarket, “Carrefour teams up with Brut to 
form social commerce company,” February 2, 2022.
44.	 Anyone with between 10K and 100K followers on social 
media that has a more curated, cohesive community 
of followers
45.	 Anyone with between 100K and a million followers on 
social media
46.	 Forbes, “Micro-Influencer Power: Building Brand Trust 
And Driving Conversions,” August 2023
47.	 Walmart, “Walmart launches new content creator 
platform,” October 18, 2022.
48.	 Greenly, “Global Food Waste in 2023,” August 22, 2023.
49.	 Grocery Dive, “How AI, digital innovation can help grocers 
reduce food waste,” August 28, 2023.
50.	 L’Oréal Groupe, “L’Oréal USA rolls out product labeling 
system to educate consumers about the environmental 
impact of its products,”.
51.	 L’Oréal Groupe, “To empower consumers in their 
purchasing decisions, L’Oréal Canada launches product 
impact labeling system,” March 2023.
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Key contributors
Tim Bridges
Global Sector Lead, Consumer Products, 
Retail Distribution, Capgemini 
timothy.bridges@capgemini.com
Marisa Slatter 
Director, Capgemini Research Institute 
marisa.slatter@capgemini.com
Jerome Buvat
Head of Capgemini Research Institute
jerome.buvat@capgemini.com
Sumit Cherian 
Program Manager, Capgemini Research 
sumit.cherian@capgemini.com
Lindsey Mazza
Global Retail Lead, Capgemini 
lindsey.mazza@capgemini.com
Bhavesh Unadkat
Vice President, Head of Marketing 
Services, frog
bhavesh.unadkat@frog.co 
Owen McCabe
Vice President, eCommerce, Capgemini
owen.mccabe@capgemini.com
Kees Jacobs  
Vice President, Global Lead for Insights and 
Data, Capgemini Consumer Products and Retail 
kees.jacobs@capgemini.com
Subrahmanyam KVJ
Senior Director, 
Capgemini Research Institute
subrahmanyam.kvj@capgemini.com
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The authors would like to especially thank Kunal 
Karamchandani and Sakthivel S from the Capgemini 
Research Institute for their contributions to this research.
The authors would also like to thank Emmanuel 
Fonteneau, Bas Morselt, Maaike Slagter, Michelle 
Grujin, Achim Himmelreich, Vito Labate, Bridget Blaize, 
Pallav Srivastava, Kristin E Morris, Rupali Chakraborty, 
Ashwani Kumar, Jaydeep Neogi and Manish Saha for their 
contributions to this research.
About the 
Capgemini Research Institute 
The Capgemini Research Institute is Capgemini’s in-house 
think tank on all things digital. The Institute publishes 
research on the impact of digital technologies on large 
traditional businesses. The team draws on the worldwide 
network of Capgemini experts and works closely with 
academic and technology partners. The Institute has 
dedicated research centers in India, Singapore, the UK, and 
the US. It was recently ranked number one in the world by 
independent analysts for the quality of its research. 
 
Visit us at www.capgemini.com/researchinstitute/
Global contact
TIM BRIDGES
timothy.bridges@capgemini.com
Australia
AMIT SINGHANIA 
amit.singhania@capgemini.com
Spain  
DAVID LUENGO RUIZ
david.luengo-ruiz@capgemini.com
Germany 
ANDREAS UNRUHE
andreas.unruhe@capgemini.com
India
VIDHYA KRISHNASWAMY
vidhya.krishnaswamy@ 
capgemini.com
United States
TED LEVINE
theodore.levine@capgemini.com
France
ANNE-SOPHIE THAUMIAUX
anne-sophie.thaumiaux@
capgemini.com 
EMMANUEL FONTENEAU
emmanuel.fonteneau@ 
capgemini.com
Netherlands 
THEO VAN ROEKEL
theo.van.roekel@capgemini.com
Sweden
CAROLINE SEGERSTÉEN RUNERVIK
caroline.segersteen-runervik@
capgemini.com
United Kingdom
MICHAEL PETEVINOS
michael.petevinos@capgemini.com 
LINDSEY MAZZA 
lindsey.mazza@capgemini.com
For more information, 
please contact:
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Reflect. Rethink. Reconsider: 
Why food waste is everybody’s 
problem 
Why consumer love 
Generative AI
More Capgemini Research Institute publications
Illuminating the path: Building 
resilient and efficient supply 
chains in the consumer products 
and retail industry
Generative AI and the evolving 
role of marketing: A CMO’S 
Playbook
A new playbook for 
Chief Marketing 
Officers
Conversations for 
Tomorrow, 4th edition: 
The new face of 
marketing
The wake-up call: 
Building supply chain 
resilience in CPR
The age of insight: How CPR 
organizations can accelerate 
value capture from data
What matters to today’s 
consumers: 2023 consumer 
behavior tracker 
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries
Copyright © 2024 Capgemini. All rights reserved.
About Capgemini
Capgemini is a global leader in partnering with companies to 
transform and manage their business by harnessing the power 
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unleashing human energy through technology for an inclusive and 
sustainable future. It is a responsible and diverse organization of 
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Get the Future You Want | www.capgemini.com




CONTENTS
Introduction	
3
Demand	
Inflation Triggers Shift in Global Consumer Spending	
4
Gen Z — The Generation Changing Everything	
9
The Return of Chinese Consumers Abroad	
16
Ecosystem	
The Surge of Social Commerce in China — From Big 2 to Big 5	
22
8 Lessons to Master Personalization in the Retail Industry	
27
Innovation	
Tech Solutions for Retail Merchandising Success 	
31
Strategies to Help Solve the Private Label Dilemma in Retail 	
35
Solutions for Dealing with Inventory Turnover Challenges 	
38
Streamlining your Supply Chain with Warehouse Automation 	
45
Sustainability	
Food Retailers Need to Act Now for a Net-Zero Future 	
51
Delivery Decarbonization Pathway 	
55
Consumer and Home Electronics — Going Full Circle 	
61
4 Ways to Align Corporate Interests to Scale Climate Action 	
65
Leadership	
Secrets of Effective Leadership in Times of Crisis 	
68
Understanding AI's Impact on Job and Industry Transformation	
71
Transform Retail Employees into Powerful Community Builders 	
76


WELCOME
To the 10th edition of the Oliver Wyman 
Retail And Consumer Journal.
After emerging from the COVID-19 pandemic, the retail and consumer sector was confronted 
with a new set of major challenges in 2022 and 2023. These challenges include the fallout from 
inflation and cost-of-living crises in the West, as well as the demand stagnation in many 
parts of Asia. These factors put pressure on volumes, margins, inventory levels, and costs.
Despite these current challenges, the sector continues to face major long-term shifts. 
Technological advancements, particularly the rapid rise of generative artificial intelligence 
are reshaping consumer demand and how companies operate. The emergence of Gen Z 
and Gen Alpha is introducing a new dynamic to consumerism and talent management. 
Environmental concerns are also intensifying, leading to the emergence of coalition 
initiatives and new regulations in the retail and consumer sector. Additionally, recent 
geopolitical developments have further exposed the vulnerabilities of global supply chains.
While these themes can appear daunting, we remain convinced that there are ample 
opportunities within every challenge. Those who continue to anticipate, innovate, and 
transform will thrive more than ever.
This tsunami of change, and how to size the opportunity that comes with it, is the theme 
of this edition of the Retail And Consumer Journal. We explore the various developments, 
examine how companies are responding to them, and provide our insights on how to 
approach these challenges both now and in the future. We hope the shared perspectives 
will help you stay ahead of the curve and make the most of new opportunities that arise.
We hope you enjoy the reading this edition of the journal.
Sirko Siemssen
Partner and Global Head of Retail 
and Consumer Goods
Rainer Münch
Partner and Head of Retail and
Consumer Goods, Europe
Frédéric Thomas-Dupuis
Partner and Head of Retail and
Consumer Goods, Americas
Pedro Yip
Partner and Head of Retail and 
Consumer Goods, Asia Pacific


INFLATION TRIGGERS 
SHIFT IN GLOBAL 
CONSUMER SPENDING
How consumers are adjusting their spending behavior
DEMAND
Jens von Wedel
Sarah Beul
Sarah Adelfang


Contents
Inflation Triggers Shift in Global Consumer Spending
© Oliver Wyman
5
Inflation has shown signs of easing in recent months, yet consumers worldwide remain 
apprehensive about their spending power. A June 2023 Oliver Wyman survey of 10,000 
consumers in nine countries illustrates that people across the globe still have significant 
concerns about their ability to pay for essential goods and services, despite a slight 
improvement in sentiment compared with February this year. 
These concerns are widespread in Germany, the UK, France, and the US, with around 
three–quarters of consumers expressing them. The situation is even more severe in Brazil, 
Mexico, and the United Arab Emirates (UAE), where that figure is over 90%. As we detail 
below, consumers adjust their purchasing behavior accordingly. 
SHOPPING BEHAVIOR IS CHANGING WORLDWIDE
The fear of inflation is evident in consumers' spending behavior on groceries and essential 
goods. Across all countries, more than 80% of survey respondents stated that they have 
adjusted their buying behavior, including over 40% who have reduced how much they buy. 
In addition, consumers are particularly on the lookout for cheaper alternatives — more than 
half of those surveyed reported opting for lower–priced groceries, such as private label 
goods. The UK stands out in this regard, with two–thirds of consumers indicating they are 
substituting their regular purchases with cheaper alternatives. Increased price sensitivity 
has also driven consumers globally to seek cheaper options online (44% of respondents) 
and actively use coupons (41%) to save money on purchases. 
In the Middle East, consumers have adopted an approach to saving money that is not yet 
as widely common in Europe: 43% of respondents in the UAE reported utilizing bulk orders 
to reduce prices. This reflects a shopping behavior that we mainly associate with North 
America, where consumers have long been accustomed to purchasing in larger quantities, 
benefiting from ample space for storage and significant cost savings from wholesale club 
retailers. 
The bulk ordering continues to show strong momentum in Asia as well, though with a 
different approach. The model of Pinduoduo is based on a group–buying approach, where 
consumers can team up with others to purchase products in bulk. As this trend continues to 
gain traction, it highlights how different regions are embracing innovative ways to leverage 
bulk purchasing for substantial savings. For Europe, the Asian group purchase model seems 
a more viable option than the American bulk sizes due to typical limitations on storage 
room. At this point it is not yet an apparent trend.


Contents
Inflation Triggers Shift in Global Consumer Spending
© Oliver Wyman
6
Exhibit 1: Changing purchasing behaviors
Delay a major purchase
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Buy cheaper brands
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
0%
80%
60%
40%
20%
Search online for
cheapest option
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Buy less
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Use more coupons
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
0%
80%
60%
40%
20%
Buy things on sale
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Order in bulk
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
0%
80%
60%
40%
20%
Use “buy now, pay later” plans
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Source: Oliver Wyman Forum Consumer Survey 2023
REGIONAL DIFFERENCES IN CONSUMER SPENDING PRIORITIES 
Consumers are also adapting their purchases of discretionary goods. While shoppers 
are willing to accept stronger cutbacks for some product categories due to inflationary 
concerns, there are exceptions. Interestingly, apparel remains relatively resilient, with nearly 
half of respondents stating they will continue to spend as before. 
Leisure travel is also valued highly. After the prolonged period of restrictions, lockdowns, 
and uncertainties during the pandemic, many people seem unwilling to accept inflation–
driven cuts to their spend on traveling. 


Contents
Inflation Triggers Shift in Global Consumer Spending
© Oliver Wyman
7
Looking at some regional differences: Consumers in North America are less likely to 
adjust their spending on holiday gifts, while European consumers say they will continue 
to purchase white goods. Overall, customers are now thinking much more carefully about 
whether and how much they are willing to spend on furniture, cars, and home renovations 
and, if necessary, may postpone their purchase to a later point in time.  
Exhibit 2: Ranking of non–essential goods during recession
United States
40%
40%
36%
36%
32%
32%
17%
17%
17%
17%
Canada
38%
38%
31%
31%
32%
32%
17%
17%
18%
18%
Mexico
55%
55%
26%
26%
22%
22%
22%
22%
22%
22%
Brazil
55%
55%
35%
35%
35%
35%
32%
32%
35%
35%
Germany
60%
60%
41%
41%
36%
36%
43%
43%
32%
32%
France
44%
44%
37%
37%
18%
18%
19%
19%
23%
23%
Italy
46%
46%
36%
36%
23%
23%
23%
23%
22%
22%
United Kingdom
37%
37%
38%
38%
18%
18%
23%
23%
23%
23%
United Arab Emirates
39%
39%
27%
27%
25%
25%
28%
28%
30%
30%
Apparel
Leisure travel
Holiday gifts
Consumer electronics
Small domestic appliances
Elective healthcare procedures
White goods (refrigerator, etc.)
Source: Oliver Wyman Forum Consumer Survey 2023 


Contents
Inflation Triggers Shift in Global Consumer Spending
© Oliver Wyman
8
NEED FOR ACTION FOR RETAIL AND CONSUMER 
GOODS COMPANIES
Inflation effects on spending will remain severe in the short term, particularly in those 
categories where consumers are more price–sensitive and willing to adapt their spending 
patterns, such as furniture, cars, home renovations, and white goods (see Exhibit 2). 
This challenging economic landscape presents a unique opportunity for retailers and 
manufacturers that possess superior value–for–money offerings and a commitment to 
leading cost efficiency. To capitalize on this dynamic, these businesses should proactively 
undertake a strategic review of their product range and pricing strategies. For instance, 
they could consider implementing targeted price reductions for a limited period. Retailers 
could optimize their private label product selection to attract customers who are looking 
for cheaper options. By embracing such approaches, businesses can position themselves 
not only for short–term market share growth but also for lasting customer loyalty and 
competitive advantage.


GEN Z — THE GENERATION 
CHANGING EVERYTHING
DEMAND
Oliver Wyman Forum


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
10
Older people sometimes caricature Generation Z as a temperamental collection of 
“snowflakes” and “strawberries” who personify the excesses of the social media era. 
But these digital natives are so much more than that. They are emerging from the global 
pandemic resilient and pragmatic, self–reliant and collaborative. Businesses that dismiss 
them do so at their peril.
Exhibit 1: Global population of Gen Z
25% 
Gen Z
23%
Millenials
19%
Gen X
14%
Boomers
Note: Age group data adjusted to align with Pew Research Center definitions of each generation.
Source: Fitch Solutions
Born between 1997 and 2012, Gen Zers are still coming of age — but they already display 
fierce independence, passionate activism, and unwavering acceptance of others. They 
possess a moral compass and a willingness to chart their own paths rather than conform 
to previous norms. These traits will serve them well as they reshape society, the economy, 
the workplace, and much more in the years to come.
We spent two years studying this generation. Our research included focus groups and a 
recent poll of 10,000 adults in the United States and the United Kingdom. While Gen Z is not 
a monolithic group — far from it — our exhaustive research enables us to connect the dots 
in new ways on many of the commonly shared views and traits that define this cohort.
While many generations “become their parents” as they pass through life’s many stages, 
the evidence suggests Gen Z will be different. Given the economic, social, and political 
trauma they have faced in their short lives, many of their values, behaviors, and lifestyle 
choices are now etched into their DNA. Brands and employers expecting Gen Z to revert to 
the mean will be surprised when they don’t.
Our report dives deeply into what makes Gen Z tick and examines in detail the changes they 
are bringing. Here is a summary of our most important findings — and how businesses 
should prepare.
Maybe the older generations sucked it up and [got] on with it. 
Because it was quite a nice thought, being able to retire and do 
what you want. But now we’re looking at it and our retiring age 
is moving further and further and further, and we’re like, how long 
is this gonna keep going on for?
­
Midlands, UK
userid:414195,docid:149420,date:2023-12-24,sgpjbg.com


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
11
WHO THEY ARE
When it comes to identity, Gen Z defies all labels. Its members are spiritual, but not 
religious. They’re realists, and are also optimistic. They embrace gender fluidity and view 
“situationships” as a practical alternative to defined relationships.
Gen Zers want bosses who understand them — and brands that celebrate their differences 
and support them in their fight against gender norms, beauty standards, and outright 
discrimination. To stay relevant, many companies must learn to shapeshift, too, by amending 
their policies, procedures, and benefits to fit Gen Z’s needs.
Exhibit 2: Gen Z is diverse, smart, connected, and struggling with mental health
Racial and ethnic diversity
Percent of each generation that does not 
identify as non-Hispanic white¹ (US Only)
College education
Percent of each generation enrolled in 
college at ages 18-21² (US Only)
Self–reported mental health issues
Percent of each generation that self-report 
struggling with at least one mental health 
issue in the last two years⁴ (US/UK only)
TikTok usage
Percent of each generation that 
follow and buy from TikTok accounts³
Gen Z
Millenials
Gen X
Boomers
48%
46%
41%
29%
57%
52%
43%
42%
28%
16%
6%
65%
51%
29%
14%
1. Source: US Census Bureau, Insider Intelligence.
2. 
Note: Measured in 2018 for Gen Z, 2003 for Millennials, and 1987 for Gen X. Source: Pew Research Center Analysis of 
US Census Bureau, Insider Intelligence.
3. Source: Klarna, Insider Intelligence.
4. Source: Oliver Wyman Forum Global Consumer Sentiment Survey, September 2020 – present.


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
12
WHERE THEY ARE 
Gen Zers are the first true digital natives, and it shows in how they choose to stay informed. 
They may trust print and broadcast news, but 60% get their news from social media and its 
many influencers and creators, in part because they appreciate multiple viewpoints. They 
are skeptical and aware of the need to doublecheck what they hear. But they often struggle 
to distinguish fact from the conspiracy theories, half–truths, and outright lies that pervade 
social media.
To remain relevant and combat disinformation, media organizations must compete with 
social platforms through content that is not only informative and entertaining but also 
relatable. That means partnering with influencers and building up their presence on social 
media. The same is true for companies that want their story to be heard — and to stick. They 
should listen first, then understand and meet Gen Zers where they are.
HOW THEY FEEL 
Coming out of the pandemic with twice the reported mental health issues as before, Gen 
Zers have become obsessive about their well–being. And they’re managing it on their own 
terms. Increasingly distrustful of mainstream medicine, Gen Zers are embracing a more 
holistic approach that gives greater weight to their mental well–being. They track their 
health with wearables, are trying alt–treatments like CBD, and follow TikTok influencers for 
medical advice.
Their embrace of alternative medicine reflects a concern that many aspects of mainstream 
healthcare don’t address their needs. Gen Zers are demanding greater attention is paid to 
the mental health crisis, women’s health issues, and the inequalities in access to healthcare. 
And even those with access to care want better communication with their providers and 
options that fit their perceptions of self–care.
Over time, Gen Zers’ proactive approach is likely to reshape the healthcare industry with 
their expectations for what care should look like and how it should be delivered. That has 
implications for the healthcare establishment — and will compel employers to greatly 
expand the health benefits they provide.
WHAT THEY CARE ABOUT  
Gen Zers are throwing their idealism and ingenuity into fights against climate change, 
income inequality, and other issues. While they disproportionately engage in public protests, 
Gen Zers also see value in posting on social media or talking with their friends due to the 
collective impact of these small actions. Yet, they are aware they can’t create change alone. 
Their trust in government and media might be fading, but they believe big institutions have 
the responsibility to act. They think businesses need to raise their game — and any business 
that does will have a distinct advantage.


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
13
Yes, some corporate leaders are facing a backlash from investors who want them only 
to focus on the bottom line rather than taking a stand. But if companies don’t speak out 
about issues that matter to Gen Z, they risk losing the next generation of consumers and 
employees. Gen Zers have a keen eye for performative activism, and issuing a statement 
that is blatant “greenwashing” won’t suffice. Instead, this generation pays attention to 
substantive commitments of time and money. Giving Gen Zers the volunteer time and 
financial backing to support their passions are good first moves.
WHAT THEY ARE DOING FINANCIALLY 
Watching their parents and older siblings struggle financially has made Gen Zers debt–
averse, stressed about money, and determined to manage their finances differently. Gen Z 
investors are starting younger and, as a group, have a higher percentage of women and 
people of color. And true to their digital upbringing, they seek community by crowdsourcing 
investment ideas from subreddits and the flashy influencers on TikTok and Discord.
And yet, they’re not sure if they’re making the right moves: Gen Zers are 1.4 times more 
likely to report that “money stresses me out” than older generations — and five times less 
likely to be disciplined with their spending. While many Gen Zers may not have money today, 
wealth managers, asset managers, and other types of financial institutions need to play 
the long game and grab the hearts, minds, and wallets of this next generation of investors. 
Retooling their products and marketing to reflect Gen Z’s diversity is a good start, as is 
providing more educational and investing content.
HOW TO WIN THEM AS CUSTOMERS 
Gen Z has always had a world of online information at its fingertips. As comparison–shoppers, 
they are frugal, cynical, and can sniff out marketing gimmicks and false claims in a heartbeat. 
They expect more from companies than millennials do, and won’t hesitate to bury companies 
on social media for their missteps.
Yes, they are a tough sell. But as they fully reach adulthood over the coming decade, Gen Z 
will become the largest consumer demographic in history. That means brands have no choice 
other than to learn what Gen Z wants and find ways to be relatable, inclusive, trustworthy, and 
transparent. Brands need to show authenticity, get “phygital” with the right mix of physical 
and digital engagement options, and understand that dialogues are the path to transactions.


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
14
HOW TO WIN THEM AS EMPLOYEES 
While previous generations did whatever it took to climb the corporate ladder, Gen Z isn’t 
about it. The pandemic turned their first jobs into a two–year video call and raised the bar 
for what they want from their working lives. What many want is to work for globally aware 
companies that provide the flexibility, autonomy, and work–life balance they seek. And they 
will #quietquit or #jobhop from employers that don’t. A large portion of Gen Zers already are 
fashioning work for themselves that fits what they want, on their own terms: Today, 45% of 
them have side hustles.
Exhibit 3: Gen Z is on a path to becoming a leading force in the workplace
2031
2022
Share 
of workforce
forecast
(US only) 
Boomers
Gen X
Millenials
Gen Z
Note: Age group data adjusted to align with Pew Research Center definitions of each generation.
Source: US Bureau of Labor statistics
With Gen Z expected to account for nearly a third of the workforce by 2030, employers 
must raise their game to recruit and retain the best and brightest. Covering the basics — 
pay, growth opportunities, better worklife balance, transparency — is a start. So, too, 
is prioritizing their health, offering career optionality and initiatives that help them find 
personal fulfillment at work, and nurturing their entrepreneurial spirit.
As this report shows, Gen Z is different from even the young millennials who are only a 
few years older. Timeworn strategies won’t work on this cohort — and waiting for them to 
conform to the old rules is risky for businesses and employers alike. Gen Zers want more — 
more transparency, personalized attention, democratized information, equitable treatment, 
and options in the jobs they work and products they buy.


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
15
Businesses that became nimbler and more agile during the pandemic should use those 
same skills to adapt to Gen Z’s unique needs. Companies need to be creative and approach 
decisions more like experiments they can learn from. Given Gen Z’s size and clout, employers 
and brands have no choice but to adapt. The question is whether they will forge ahead to 
leapfrog the competition — or be leapfrogged. Seizing the moment will help them win over 
the most consequential generation in modern history.
Read more
WHAT BUSINESS NEEDS TO KNOW ABOUT THE GENERATION 
CHANGING EVERYTHING 


Imke Wouters
Jacques Penhirin
Kenneth Chow
THE RETURN OF CHINESE 
CONSUMERS ABROAD 
What to expect as Chinese tourists return
DEMAND


Contents
The Return of Chinese Consumers Abroad
© Oliver Wyman
17
In 2019, Chinese travelers made 155 million outbound trips, and spent a cumulative 
$245 billion on outbound tourism, an amount greater than the size of New Zealand’s total 
economy. After almost three years of border closure, Chinese travelers are finally coming 
back. Our survey of 3,495 affluent Chinese consumers, defined as those with a minimum 
monthly household income of ¥30,000, representing about 5% of China’s total population 
in 2022, sought to understand when and where we would see them again. Additionally, 
we aimed to determine whether their abundant international shopping habits, particularly 
for luxury products, would continue.
NO FULL RECOVERY YET AS DOMESTIC TRAVEL REMAINS 
A POPULAR ALTERNATIVE
Although approximately 60% of experienced international travelers — those who traveled 
internationally before COVID–19 — have already traveled or are planning to travel in 
2023, about 30% plan to wait more than two years before traveling internationally again. 
While we thought that after three years of border closure, everyone would be wishing 
to travel internationally again soon, for some the opposite has happened. In fact, 73% 
ofthe experienced travelers who have decided not to travel internationally in 2023 have 
made this choice because they prefer to travel domestically, having discovered the 
attractiveness of traveling at home during the last few years. Taking new international 
travelers into account, we expect a full recovery of Chinese outbound tourism in the second 
half of 2024 the earliest.
Exhibit 1: Expected international travel timeline
% of respondents
Pre-COVID international travelers
New international travelers
2023
2024
2025-2026
2027+
62%
9%
23%
6%
10%
4% 29%
57%
Source: Oliver Wyman’s Chinese traveler survey (June 2023)


© Oliver Wyman
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Contents
The Return of Chinese Consumers Abroad
Exhibit 2: Reasons for deferred traveling plan
% of respondents
73
47
32
53
22
28
8
35
3
8
Domestic travel is
International
travel is too costly
Health risks
No valid
passport/visa
schedule
Pre-COVID international travelers
New international travelers
24% of pre-COVID travelers 
are wary of flight cost, 
while 48% of non–international 
travelers are concerned about 
the general affordability 
of an international trip
Source: Oliver Wyman’s Chinese traveler survey (June 2023)
CHINESE TRAVELERS RETURN TO FAMILIAR DESTINATIONS
In 2023, the top destinations for Chinese travelers are expected to be familiar places, 
such as Hong Kong SAR, Western Europe, and Japan. These destinations are top of the list 
for experienced travelers, with almost 40% of those who have visited Western Europe 
planning to return this year. We expect an increase in the number of Chinese travelers 
visiting Europe later this year and expect Japan and South Korea will pick up in tourism 
significantly during the October holiday now that group tours are allowed.
Chinese travelers are also showing renewed interest in group tours. Contrary to the pre–
pandemic sentiment where only 40% traveled in group tours, 52% of surveyed travelers plan 
to join these tours for their next trip in 2023. This upward trend is observed across all age 
groups and travel experience.


Contents
The Return of Chinese Consumers Abroad
© Oliver Wyman
19
SHOPPING TOPS REASONS FOR INTERNATIONAL TRAVEL, 
BUT LUXURY SPENDING STAYS DOMESTIC
Before COVID–19, our surveys revealed the importance of shopping as a reason for 
international travel declining year–on–year, with exploring scenery becoming the primary 
motivation. However, shopping has regained its position as the top reason for international 
travel (Exhibit 3), followed by enjoying nice food. This trend is particularly popular among 
Gen Z travelers, with 62% of them inciting indulging in gastronomic experiences as their top 
reason for international travel.
Exhibit 3: Top purposes of post–pandemic international leisure travel by age group
% of respondents, Top 3 choices
Baby boomers
Participating in events or sports
Gen X
Millennials
Gen Z
Trying out new experiences
Visiting unique places
Enjoying nice food
Exploring the scenery
Exploring the local culture
Shopping
32%
33%
45%
50%
55%
41%
44%
22%
33%
55%
59%
60%
35%
35%
14%
32%
56%
62%
66%
34%
38%
20%
33%
50%
52%
62%
39%
44%
Source: Oliver Wyman’s Chinese traveler survey (June 2023)
While shopping is the main reason for international travel, the majority of luxury shopping 
is expected to remain domestic. Chinese luxury shoppers who travel internationally this year 
anticipate spending 20% of their luxury budget abroad and 80% domestically.
While the Chinese travelers are returning, it takes longer than we 
expected when the border reopened. Economic uncertainty has 
also impacted Chinese tourists’ luxury spending overseas.
Imke Wouters, Partner, Oliver Wyman


Contents
The Return of Chinese Consumers Abroad
© Oliver Wyman
20
Interestingly, we see a big difference between experienced and new luxury shoppers (those 
who only started buying luxury products during COVID–19 and so only have domestic luxury 
shopping experience). Approximately 85% of experienced luxury shoppers expect to revert 
to shopping overseas now that borders are open, only about a third of new luxury shoppers 
share this sentiment. These new luxury shoppers also have very high expectations on service 
levels internationally as they are accustomed to frequent and personal interactions with the 
sales associates of their core luxury brands domestically. With the luxury market booming in 
China in 2021, all luxury brands have invested in boosting their offerings in China. Given the 
wide domestic offerings, Chinese luxury shoppers see less of a need to shop internationally 
and are now also accustomed to buying luxury products when they want them, rather than 
waiting to travel. Gen Z represents a significant portion of these new luxury shoppers, and 
they are looking for new experiences and food rather than shopping. 
GEN Z IS THE BIGGEST GROUP OF NEW TRAVELERS
In the last four years, new types of Chinese travelers have emerged. Around 30% of the 
new travelers in 2023 are members of the Gen Z workforce, who now have a stable income 
and the means to travel internationally. They care less about shopping and prioritize new 
experiences they can share on social media. They typically have smaller budgets, so they 
favour destinations that are close with the aim to maximize the number of experiences they 
can enjoy in a short time. As they are accustomed to luxury shopping domestically they don't 
wish to waste their limited travel time on shopping.
Those who are anxiously waiting for the full return of Chinese travelers will have 
to wait a little longer and be prepared for a new type of Chinese traveler who has 
higher expectations, given the enhanced traveling and shopping experiences now 
available domestically.
Read more
WHAT YOU SHOULD KNOW ABOUT THE RETURN OF CHINESE TRAVELERS




Jens von Wedel 
Dave Xie
Sarah Adelfang
THE SURGE OF SOCIAL 
COMMERCE IN CHINA — 
FROM BIG 2 TO BIG 5
Navigating the evolving digital retail landscape
ECOSYSTEM


© Oliver Wyman
23
Contents
The Surge of Social Commerce in China — From Big 2 to Big 5
Driven by a confluence of factors, China has emerged as one of the most advanced 
e–commerce markets in the world. With a population exceeding 1.4 billion, China offers 
an immense consumer base eager for goods and services. The country’s dynamic 
urbanization and growing middle class have created a preference for a digital transaction, 
fueling the growth of online retail.
As a result of this evolution, consumption of online physical goods has risen to 
12 trillion RMB in 2022 in retail sales value from about 7 trillion RMB in 2018, and now 
accounts for 27% of China’s total retail consumption (Exhibit 1). The market’s vast scale, 
coupled with innovative business models, efficient logistics networks, and an affinity for 
social interaction, solidifies the nation’s position as a vital hub for global e–commerce.
Exhibit 1: China total offline versus online retail consumption, 2018–2022
In retail sales value, trillion RMB
2018
2019
2020
2021
2022
30.8
7.0
32.3
8.5
29.4
9.8
33.3
10.8
32.0
12.0
37.8
40.8
39.2
18.6%
20.9%
24.9%
24.5%
27.2%
Offline retail consumption
Online physical goods consumption
Online contribution to total retail consumption %
44.1
44.0
Source: National Bureau of Statistics, Oliver Wyman analysis
A look at China reveals a change in the e–commerce landscape. The longstanding platform 
dominance of the two major players — Alibaba and JD.com — is increasingly being challenged, 
driven by the emergence of social commerce. In a short period of time the “big two” have 
become the “big five”, with the addition of challengers Pinduoduo, WeChat mini–program, 
and Douyin (known elsewhere as TikTok).
While the challengers have experienced rapid growth, the two big players have seen their 
growth nearly stagnate in recent years. Facilitated by the country’s mobile–first mindset, 
these companies have seamlessly integrated social interactions into the shopping experience, 
creating new opportunities for brands and retailers. This fusion of social networks and 
e–commerce has revolutionized how people discover, assess, and purchase products.


The Surge of Social Commerce in China — From Big 2 to Big 5
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Contents
Established and emerging players must rethink their strategies to thrive in this dynamic 
environment. China remains not only an e–commerce pioneer, but also a trendsetter that 
significantly influences the industry elsewhere in the world, including Europe. So, what 
conclusions can be drawn about the effects of the shift in China’s e–commerce landscape on 
the European market?
Exhibit 2: Gross Merchandise Value (GMV) evolution of key channels1
In billion RMB
2017
2018
2019
2020
2021
2022E
19-21
CAGR%
21-22
GR%
Tmall and TaoBao 
(Alibaba)
4,820
5,727
6,589
7,494
7,976
7,500- 
7,700
+10%
Mid-single 
digit decline
JD
1,295
1,677
2,085
2,613
3,297
3,482
+36%
+6%
Pinduoduo
141
472
1,007
1,668
2,441
3,1002
+56%
36%3
Douyin4
~50
~500
~800
~1,400
+300%
+70-80%
Overall
+22%
+8-9%
1. Refer to GMV of 2017 – 2021 financial year based on GMV number released by each platform and official data and 
estimation by company senior management team and broker report; 2. Extrapolated based on PDD Q1–Q3 y–o–y growth; 
3. 2022 Q1–3 revenue; 4. Estimated based on broker report.
Source: Annual reports, Broker reports, Expert interviews, Oliver Wyman analysis
UNVEILING THE TRANSFORMATIVE POTENTIAL 
OF SOCIAL COMMERCE
Pinduoduo (under its international brand Temu) and Shein have emerged as noteworthy 
disruptors in the European market recently. Notably, Temu stands out from the competition 
through its customer centricity and advanced data insights, despite still grappling with some 
operational and commercial challenges.
Unlike established players, these newcomers are not constrained by extensive existing 
IT infrastructure. The freedom allows them to build fresh data analytics capabilities 
and seamlessly integrate new technologies such as artificial intelligence. They can also 
seamlessly tap into underpenetrated marketing channels in social media. This results 
in a superior ability to attract customers and stimulate demand, especially for low value, 
nonessential goods.


© Oliver Wyman
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Contents
The Surge of Social Commerce in China — From Big 2 to Big 5
However, it’s not only social commerce retailers and retail approaches that are benefiting. 
Many conventional e–commerce brands and retailers have struggled in recent years 
to operate a profitable customer acquisition funnel through established channels such 
as search. This has left the leading platforms somewhat uncontested in their growth to take 
a top position in many Western European markets. Social media creates a new opportunity 
for brands and retailers to leverage a fast–growing marketing channel.
EXPECTED CONSEQUENCES FOR INDUSTRY LEADER AMAZON
The entry of Chinese competitors into the European e–commerce market will most likely 
usher in a new era of competition for Amazon. While the US–based company’s biggest 
competitors have traditionally lagged, the next wave of market entrants is expected to pose 
a greater risk to its market position.
The competition is coming from two ends of the market. The first is low–budget, no–name 
products. That’s a reflection on the rising cost for sellers on Amazon , particularly those from 
China. The Chinese e–commerce competitors have low costs and demonstrate incredible 
speed and agility in adapting their product portfolios, a combination that is difficult to 
imitate. Secondly, Amazon has managed to become the go–to destination for product 
information and research, creating a powerful touchpoint in customers’ journeys. But 
influencers and opinion leaders on social platforms like Instagram and TikTok are growing 
their reach in product advice (and advertising). While so far it is mostly left up to brands and 
retailers to leverage this strength, a more direct “commercialization,” as already witnessed in 
the Chinese market, would pose an imminent threat for the incumbent market leader.
Still, Amazon’s global expertise and established customer trust can serve as a valuable asset 
for succeeding in this evolving competitive landscape. Amazon has positioned itself as a 
trusted player, delivering quality as well as premium customer service (for example, return 
policies and Amazon Prime). So, while Chinese players are likely to gain popularity among 
the younger demographic — which is characterized by a strong affinity for e–commerce, 
more limited purchasing power, and an openness to explore — the older population is likely 
to remain loyal to Amazon.


The Surge of Social Commerce in China — From Big 2 to Big 5
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Contents
IMPLICATIONS FOR BRANDS AND RETAILERS NAVIGATING 
THE NEW E–COMMERCE LANDSCAPE
Brands need to prepare themselves to penetrate the new channels, accelerate their retail 
capability building, and review their strategies. It is important to allocate marketing dollars 
and e–commerce capabilities appropriately and look out for synergies (category, price, 
promo) across platforms.
However, capabilities are often transferable across channels . In the past Instagram was the 
place that brought the influencer economy to life. Tik Tok has quickly taken over and put an 
even more commercial spin on it. Tik Tok has also become a serious competitor for Google in 
terms of advertising revenue.
Discussions with manufacturers and retailers clearly show that TikTok is on track to 
become the most attractive marketing platform for consumer brands. The more fragmented 
e–commerce landscape is a double–edged sword. On the one hand, brands need to 
build presence on more platforms, which requires a more even distribution of resources 
and higher overall investment. And earlier efforts to build differentiated positioning 
for different platforms based on different segments are likely to be down the drain.
At the same time, this increasing number of options available to customers due to this 
fragmentation may give them greater bargaining power in terms of traffic, promotion, 
and consumer data visibility. Brands also need to reflect on how new e–commerce platform 
opportunities might contrast with the sustainability goals they have set. The agility and 
speed demonstrated by those platforms, in particular Shein, come with ethical concerns 
over labor practices and sustainability that could affect brand reputation.


Frédéric Thomas–Dupuis
Randall Sargent
Danny Zhang
8 LESSONS TO MASTER 
PERSONALIZATION IN THE 
RETAIL INDUSTRY
Leverage personalization to win customer loyalty
ECOSYSTEM


© Oliver Wyman
28
Contents
8 Lessons to Master Personalization in the Retail Industry
Customers are increasingly expecting personalized recommendations, offers, and greetings 
through a seamless omnichannel experience. In fact, according to Salesforce, 73% of 
consumers expect brands to understand their unique needs and expectations, while 
56% expect all offers to be personalized. Globally, 70% of business leaders are boosting 
investments in personalization, business intelligence platform Statista finds.
However, while many retailers have only recently developed personalization capabilities, 
and few have truly mastered them, we can learn from the common mistakes observed in 
the industry.
1. START WITH A COORDINATED VISION
Personalization can mean different things to different people, from personally greeting 
top customers to personalizing search results on a retailer’s webpage to serving up the 
next best–personalized offer. Without a coordinated vision, efforts can appear disjointed 
to customers who receive mixed messaging and overlapping deals. As retailers embark 
on building personalization capabilities, it’s important to build consensus around a clear 
destination so various teams can work towards the same goal.
2. INVEST IN YOUR LOYALTY PROGRAM IN PARALLEL
Personalization requires rich customer loyalty data to make recommendations most 
relevant. Retailers should focus on driving loyalty sign–ups through in–store signage (for 
example, QR codes) and campaigns (for example, extra bonus points for creating a profile 
or downloading the app) in parallel to or in advance of building personalization. In a recent 
pilot, we found that a combination of personalized communication and in–store signage and 
kiosks resulted in 14% more new sign–ups. Personalized offers and communication can help 
drive engagement, but retailers need a strong foundation of customers they can track and 
reach to reap the full benefits of personalization.
3. PERSONALIZATION IS NOT JUST ADVANCED TARGETING OR SEGMENTATION
True one–to–one personalization requires a complete flip in mindset from the traditional 
ways of marketing, where a company develops an offer or campaign and then determines 
the right customer segment to send it to. A better approach is to start with customers and 
determine through a combination of business rules (for example, what are the priorities 
and strategic decisions to layer in) and algorithms (for example, collaborative filtering, and 
propensity modeling) what each should get from a bank of content, offers, and campaigns.
4. OFF–THE–SHELF TECHNOLOGIES ARE (OFTEN) NECESSARY BUT NOT SUFFICIENT
There is no single solution that comprehensively delivers one–to–one personalization. 
Instead, building a personalization capability requires stitching and tailoring various types 
of technology together: New machine learning/artificial intelligence algorithms (“the brains”) 
should be built in a flexible and scalable environment and delivered to customers via existing 


8 Lessons to Master Personalization in the Retail Industry
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Contents
off–the–shelf solutions. In a recent pilot, we leveraged the retailer’s CRM software to deliver 
personalization to customers, feeding it the outputs of algorithms we built that flexibly 
ranked the most relevant offers for each customer.
5. CURATING EXISTING OFFERS DRIVES SIGNIFICANT VALUE
Many retailers feel that personalization requires multiplying their volume of content, offers, 
and campaigns. In reality, they can drive substantial financial impact through curation 
of what they already have. For example, a South American grocer recently launched a 
personalized digital flyer that led to a 2%–5% increase in customer spend, simply by curating 
existing offers and content without introducing any new personalized offers or discounts.
6. GENERATIVE ARTIFICIAL INTELLIGENCE (AI) CAN HELP, NOW
Generative AI can help to increase the amount of content, offers, and campaigns without 
requiring significant additional creative resources. We’ve tested leveraging generative 
AI to personalize email greetings to customers, finding that it drives twice as many click–
through rates. This new technology requires human oversight and review but can massively 
accelerate creation.
7. DESIGNATE A CROSS–FUNCTIONAL TEAM
Personalization requires coordination across many parts of the organization, including 
digital, marketing, merchandising, and IT. We see the most effective organizations creating 
a small, dedicated cross–functional team focused solely on building and sustaining 
personalization capabilities and coaching and challenging the rest of the organization to 
make use of what’s available.
8. TAKE ACTION BEFORE EXTERNAL DISRUPTION FORCES YOUR HAND
In jurisdictions around the world, local governments are starting to limit print flyer distribution 
or ban it altogether for environmental reasons. In other markets, sudden increases in printing 
and distribution costs can leave retailers stranded. Creating a digital alternative that can be 
personalized will allow retailers to stay on the front foot.
The rapid advance of technology has opened the doors for exciting personalization 
opportunities. As retailers develop these capabilities and unveil this technology, it will be 
important to keep these lessons top of mind.
Additional contributor Felix Dumont




Coen de Vuijst
Dominik Böhler
Alexander Mol
TECH SOLUTIONS FOR 
RETAIL MERCHANDISING 
SUCCESS 
The future of retail management is being reshaped
INNOVATION


Tech Solutions for Retail Merchandising Success 
© Oliver Wyman
32
Contents
The future of retail management is shaped by technology, providing customers with 
a personalized, multi–touchpoint shopping experience while accelerating the innovation 
cycle. However, estimating the pace of change, identifying fads from trends, and making 
the right technology investments are difficult tasks. With supply chain disruption and 
inflation impacting customer budgets, retailers must focus on merchandising and sourcing 
to maintain their competitive edge. Technology can help mitigate the risks of economic and 
geopolitical factors, as well as the growth of discounters and rising labor and energy costs.
Exhibit 1: Five critical areas of focus for technology in merchandising and sourcing
Priorities
Why do this?
1	
Further automate the merchandising levers
•	 Make better decisions
•	 Free up time and resource by automating
2	
Bring an E2E cost view to optimise the business
•	 Reduce business complexity and 
operating cost
•	 Win-win with customers by passing 
on savings
3	
Look at your business through a customer lens
•	 Drive growth with profitable customers
•	 Increase loyalty
4	
Build a high-tech innovation function
•	 Differentiate! Offer products customers 
cannot get anywhere else
5	
Leverage sourcing scale and get more for less
•	 Best possible prices in branded
•	 Amazing product and price in OL
Source: Oliver Wyman analysis
PRIORITY 1 
FURTHER AUTOMATE THE MERCHANDISING LEVERS
Retailers are striving to reduce their reliance on manual processes and spreadsheets 
by incorporating automation and advanced analytics into their systems. Tech companies 
that have entered the retail space have successfully implemented highly automated 
processes that are supervised by humans, which has resulted in lower costs, faster 
operations, and fewer errors. Retailers must close the automation gap to stay competitive. 
Automated promotion management, for instance, could include predictive analytics that 
generate promotions automatically and individualized digital leaflets that combine mass and 
individualized promotions. Automation can also optimize businesses by integrating insights 
from price, promotions, assortment, and supplier management. This could reduce personnel 
requirements and increase efficiency in merchandising and sourcing departments by up 
to 60%.


Tech Solutions for Retail Merchandising Success 
© Oliver Wyman
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Contents
PRIORITY 2  
BRING AN END TO END COST VIEW TO OPTIMISE THE BUSINESS
In the highly automated world of tomorrow's merchandising and sourcing, strategic goals 
and daily actions will be closely intertwined, much like an autonomous vehicle, where 
destination input leads to efficient navigation. To achieve this, specific instructions are 
essential. Understanding cause and effect is crucial to make informed decisions, including 
how merchandising and sourcing affect cash flow and the bottom line. Currently, such 
insights are limited to gross margins or derivatives. Decision–makers need profit and loss 
(P&L) insights at the product and customer level, accounting for all costs, including cost 
of goods sold (COGS), supply chain, store labor, waste, marketing, and home delivery. 
This comprehensive view of the business will allow better decision–making in areas such as 
macro and micro assortment optimization, supplier negotiations, and customer acquisition 
and retention.
PRIORITY 3 
LOOK AT YOUR BUSINESS THROUGH A CUSTOMER LENS
A true customer perspective becomes increasingly important and personalized promotions 
and customer segmentation are no longer enough. To achieve true customer centricity, 
retailers must prioritize the acquisition, development, and retention (ADR) of customers 
and determine the personalized “best action” for each customer to move them through 
the ADR cycle. Retailers can use customer insights to improve their business by integrating 
ADR insights into core merchandising decisions, developing a "personalized next action" 
capability, and creating customers–for–life through new services like personalized apps for 
budget management, health, cooking, and sustainability. By focusing on ADR, retailers can 
build long–lasting loyalty and add meaningful value to their customers' lives. 
PRIORITY 4 
BUILD A HIGH–TECH INNOVATION FUNCTION
Retailers have an advantage over fast–moving consumer goods (FMCG) companies 
in building successful direct–to–consumer models. To gain deeper insights into consumers' 
behavior and unmet needs, retailers should blend human imagination with advanced 
technology. Behavior data analysis can help identify gaps in customer decision trees 
and discover latent needs. AI technology can scan external data for untapped trends, 
while human creativity can enhance insights. Retailers can turn these insights into action 
by investing in robust product management processes and collaborating with strategic 
suppliers for research and development (R&D) support. Innovative products can help 
retailers stand out from discounters, win the battle for customers, and provide offerings 
that are not found elsewhere.


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PRIORITY 5 
LEVERAGE SOURCING SCALE, AND GET MORE FOR LESS
Branded and own–label sourcing require different approaches. Branded sourcing involves 
obtaining accurate comparisons and standardizing terms to leverage international scale, 
while advanced technologies like fuzzy matching and interpolation can expand comparisons 
and counteract price differentiation. Collaborative sourcing involves working with a select 
group of major suppliers to reduce costs and accelerate new product development. Own–
label sourcing requires strategic and collaborative work with suppliers through multi–year 
agreements, open book arrangements, and value engineering to optimize specifications. 
Advanced retailers will increasingly utilize cost models based on commodity prices, labor 
costs, and freight to challenge supplier quotes. The automotive industry offers insight into 
future retail sourcing with sophisticated cost models and should–cost analyses.
REVOLUTIONIZING RETAIL
Retailers can use technology to improve merchandising and sourcing decision–making, gain 
granular P&L insights, and offer highly personalized customer experiences. Full–service 
retailers should leverage technology to support innovation, improve sourcing processes, 
and transition to more collaborative models. However, to succeed in the digital age, retailers 
need to recruit and retain a new mix of talent. Retailers should be realistic about what 
technology to deploy, improve their technology and data foundations, and develop new 
functionality while improving legacy tech in parallel. Retailers who make technology a core 
part of their strategy and make the right choices on technology deployment will be the 
winners in the future tech–driven world.
Read more
FUTURE OF MERCHANDISING


Sirko Siemssen
Meryem Ben–Goumi
Vikram Dhaliwal
Alexander Pöhl
STRATEGIES TO HELP 
SOLVE THE PRIVATE LABEL 
DILEMMA IN RETAIL
The new reality of private label in retail
INNOVATION


Strategies to Help Solve the Private Label Dilemma in Retail
© Oliver Wyman
36
Contents
On top of inflation–induced cost price volatility, retailers are now facing the fallout of 
consumers shifting to less–expensive channels and product ranges. The latter has cost 
European retailers more than €700 million of annualized commercial margin already, 
turning many private label portfolios into liabilities within just 12 to 18 months. As 
consumer spending may not return to pre–2022 levels for several years, it is critical for 
retailers to address this challenge seriously and head–on. In our report Addressing 
The Private Label Dilemma In Retail, we highlight the actions to consider based on our 
experience working with retailers over the past decades.
At first glance, the growth of private label is good news. As cheaper alternatives to branded 
products, private label lines should allow to slow the shift to cheaper competitors or 
channels, while also helping consumers through the cost–of–living crisis. However, the 
shift puts pressure on retailers’ margins also, with volumes flowing to lower– and low–end 
range products that dilute overall profitability. As a result, while the first wave of challenges 
rooted in the return to inflation has been difficult to absorb, this second–order effect will 
create even more challenges.
The strategic intent behind added–value private label lines is clashing with the new 
reality of crumbling volumes during the cost–of–living crisis. Retailers must decide how to 
continue winning through private label while improving economics.
Our private label playbook comprises a comprehensive set of recommendations for doing 
so effectively.
IMMEDIATE ACTIONS TO IMPROVE PRIVATE LABEL MARGINS
Stop the margin erosion and enhance your ability to act based on better control and steering 
of product–switching dynamics. These are some key steps to follow:
1.	 Perform a rapid private label assessment 
What are the results of mix–changes? What are the underlying switching dynamics? 
Which internal sourcing capabilities and how can they be improved?
2.	 Get systematically on top of private label cost of goods sold and commodity 
cost opportunities 
What is the input cost evolution across all private label products? What benefits does AI 
automation offer in understanding navigating input cost modelling complexities, and 
providing leverage in negotations with manufacturers?
3.	 Run fast–track category resets based on a thorough understanding of consumer 
product switching behavior  
How to optimize product allocation, store placement, and pricing to positively impact 
switching dynamics, prevent slippage, and maintain price perception targets?


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PRIVATE LABEL ACTIONS FOR THE LONG TERM
The current crisis is a reminder that the substantial enhancements to private label 
management capabilities of the last decade are just the beginning. In most cases, there 
are still gaps in product management and operations capabilities as well as in reaching 
meaningful scale. Things to consider:
1.	 The next private label customer proposition  
Recalibrate your north star and reposition your portfolio. Consider what you want to 
grow and focus on. Translate strategy into action by defining operational targets and 
guidelines at a granular level.
2.	 Develop true product cost–management capabilities 
Move towards a true product company mindset that considers customer proposition, 
product cost, and supply chain as one.
3.	 Get real in terms of scale and focus on volume bundling 
Combating margin erosion requires a focus on volume bundling through alliances,  
backed by top–down guidance and incentives to overcome internal resistance.
Since 2022, retailers are mostly reacting to cost of goods sold (COGS) inflation via 
negotiations and pricing. As the dust settles, it’s becoming clear that retailers face another 
wave of challenges driven by consumers trading down to the bottom–end of their private 
label portfolio. This opens gaps in their profitability picture, while the declining volumes in 
the upper parts of the portfolio raise core strategic questions. The time has come to review 
assortment and private label propositions, as well as underlying capabilities, to navigate the 
storm successfully and come out on top.
Read more
ADDRESSING THE PRIVATE LABEL DILEMMA IN RETAIL


SOLUTIONS FOR DEALING 
WITH INVENTORY  
TURNOVER CHALLENGES 
How retailers manage inventory in the face of new challenges
INNOVATION
Bobby Gibbs
Purav Adiecha


Solutions for Dealing with Inventory Turnover Challenges 
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As companies look ahead to the second half of 2023, they face continued macroeconomic 
uncertainty. One thing they know for sure is that they continue to face interest rates higher 
than at any point in the last 15 years thanks to 11 rate hikes by the US Federal Reserve 
since the beginning of 2022. Higher interest rates mean additional attention to cash 
flow management.
Retailers in many sectors have already suffered from the cutback in consumer spending 
since interest rates began to increase. This trend may be exacerbated as the Fed is 
considering raising interest at least one more time before the end of the year. For retailers 
with high debt loads, an improved working capital position is an essential lifeline. Even 
for those who have strong balance sheets, the increased carrying cost from the current 
interest rates could be worth $544 million across retailers in the S&P 1500 Composite.
A KEY MEASURE OF WORKING CAPITAL EFFICIENCY
For any company, there are three key measures of addressing working capital efficiency: 
Days Sales Outstanding (Accounts Receivable), Days Payments Outstanding (Accounts 
Payable), and Days Inventory Outstanding. Receivables outstanding are rarely an issue for 
retailers, as customers typically pay in cash or with credit cards (which have very regular, 
on–time collections). Retailers can address Days Payments Outstanding (DPO) with the right 
vendor engagement approach, but these concessions often create a zero–sum proposition 
when negotiating against vendors. Our experience has shown that the opportunity for 
savings on Days Inventory Outstanding (DIO) can create more sustainable value.
Some retail sectors require more inventory than others. Inventory levels in retail are 
generally down since 2018 but have ticked up since last year as shown below. Home 
improvement retail has seen the greatest increase over this period (approximately 16% 
year–over–year and 2% annualized since Q1 2018). These retailers are expecting a decline in 
sales in 2023, which will exacerbate this issue.


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Exhibit 1: DIO for select industries within the Retail Sector shows a recent spike in 
inventory gluts
Mar ’18
Mar ’19
Mar ’20
Mar ’21
Mar ’22
Mar ’23
0
10
30
50
70
90
110
130
20
40
60
80
100
120
Specialty Stores
Department Stores
Apparel Retail
Retail Sector as a whole
Home Improvement Retail
Hypermarkets and Super Centers
Drug Retail
Food Retail
+5.4%
Source: S&P CapIQ, S&P Composite 1500 data


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SOLUTIONS FOR STRUGGLING INVENTORY TURNOVER
Below are some solutions we propose for companies that are struggling with inventory 
turnover. These solutions have been implemented by Oliver Wyman clients in the past and 
are based on the experiences of our internal retail experts.
ADD THE COST OF INVENTORY TO MERCHANDISING REPORTING AND INCORPORATE 
INTO GOVERNANCE
What gets measured gets managed; therefore, incorporating Net Working Capital (NWC) and 
its drivers into merchandising reports will bring more attention to those metrics from the 
business. This can be accomplished either by adding these NWC metrics to existing reports 
or in standalone reports that are more “cash culture”–focused. Key metrics to incorporate 
include days of inventory outstanding, carrying cost of inventory, inventory on hand, and 
days of net working capital. Management will then be better informed to take action.
IDENTIFY HIGH–INVENTORY STOCK–KEEPING UNITS (SKUS) FOR DISCOUNT AND 
SERVICE LEVEL ADJUSTMENT
At nearly every retailer, we see certain SKUs accumulate excess inventory. By starting with 
those, we can not only unlock quick wins but also find the structural reasons causing this 
inventory to build up. At this point, management will work to reduce the buildup from 
two angles:
Flush out stock: Management can expedite the sale of built–up stock through a combination 
of promotional methods (targeted offers) and changes to planogram facings (movement 
of slow–moving SKUs to more favorable in–store locations).
Adjust replenishment: Any recurring orders for the high–inventory SKUs should be 
reevaluated to reduce either the quantity or frequency of orders.
REDUCED STORE–LEVEL ASSORTMENT THROUGH CLUSTERING
When reducing store–level assortment, it’s essential to identify “safe” candidates for 
delisting — those where a high percentage of lost sales for the specific product would be 
redistributed among other products in the same “cluster.” In the switching analysis example 
below, the product on the left has near substitutes that would absorb a large percentage 
of the sales should the product in question be delisted. The same can’t be said of the 
product on the right, which would result in an almost complete loss in sales if the product 
were removed from the inventory mix.


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Exhibit 2: Companies should identify opportunities to reduce SKU counts through an 
incrementality–based measurement of assortments
Sunscreen lotion switching example
Low Incrementality 
High Incrementality 
The goal is to ultimately identify “safe” potential candidates for delisting,
resulting in an opportunity to flush out inventory
29%
2%
1%
53%
Sunscreen
SPF100 3oz
15%
Sunscreen
SPF85 3oz
Sunscreen
SPF55 3oz 2pk
95%
Luxury
Tanning Oil
Sunscreen
SPF85 3oz
3%
2%
Luxury
Tanning Oil
Non-luxury 
Tanning Oil
Sunscreen
SPF100 3oz
Though not a bad seller, 
if this SKU is delisted just 
~15% of sales would be 
lost. The remaining 85% 
would be split between a 
variety of other products.
Though this SKU is not
a bad seller, if this smaller 
SKU was delisted, a 
majority of the sales would 
be lost because there are 
few close substitutes.
Source: Oliver Wyman analysis
POOL SWITCHABLE ITEMS FOR COMBINED SERVICE LEVELS
Switching analysis can also inform where products should be grouped to pool inventory in 
setting service levels. For highly switchable products (like the sunscreen on the left above), 
shared safety stock could service all of the products in that cluster, so that each product 
does not need its safety stock. By switching from servicing safety stock from the individual 
product level to the cluster level, the total amount of safety stock on hand is reduced 
substantially. A customer decision tree can be used to ensure that all products in the cluster 
are highly switchable.


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CASE STUDIES 
WHAT THIS COULD BE WORTH
RETAILER WITH MORE THAN $25 BILLION IN SALES (50% PERISHABLES)
The following case illustrates how a large retailer with perishables was able to reduce 
inventory and simultaneously optimize supplier performance.
Oliver Wyman was engaged to streamline supply chain management processes 
and governance. Approach and measures taken included:
•	 Needs–based planning for inventories, which allowed the client to reach optimal 
service levels
•	 Specific assignment of SKUs to storage locations to improve the flow of inventory — 
this improved the readiness of inventory for delivery by 1.4 percentage points for 
perishables and 1.3 percentage points for nonperishables
•	 Assortment review and SKU rationalization
These actions allowed the client to achieve an overall reduction in inventory of 15% 
(with an overall cost reduction of $25.2 million), plus an 80% reduction in process 
disruptions for incoming goods. The client then leveraged these wins to negotiate more 
variable payment terms with its suppliers, thereby improving working capital through 
an additional avenue (payables).
RETAILER WITH MORE THAN 10BILLIONINSALESThefollowingcaseillustrateshowaretailclient(nonperishables)implementedinventorymanagementsolutionsonalargescale.Thecompanyhasawideproductmix(bothslowandfastmovers)thatfeaturesbothnationalbrandsandprivatelabelsandmorethan10 billion 
in annual sales. As part of a wider initiative to improve internal capabilities, Oliver Wyman 
was tasked with reducing working capital in the business.
Solutions the client used to better manage inventory included:
•	 Governance: The company implemented a uniform set of managerial key performance 
indicators (KPIs), which gave management a more focused view of which inventories 
were stuck and should be moved through increased promotion and discounts.
•	 Clustered assortment: As described previously, Oliver Wyman grouped the client’s 
products into switchable clusters, which helped with SKU rationalization (and elimination) 
and created more manageable service levels of safety inventory.
•	 Supply visibility: The retailer implemented new forecasts and Material Requirements 
Planning (MRP) systems to better manage the inflow of inventory.


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The client was able to reduce its inventory by 25% by the end of the project while 
improving inventory availability by 1.2 percentage points and reducing inventory shrink 
by 2 percentage points. Newly implemented supply controls and KPI dashboards have 
helped the client ensure that the improvements made have been sustainable.
CONCLUSION: RETAILERS HAVE MULTIPLE OPTIONS WHEN IT COMES 
TO WORKING CAPITAL
In the face of increased uncertainty and higher interest rates, having more cash on hand or 
drawing less from a revolver is never a bad thing. For retailers to weather these conditions, 
they should be equipped with ample liquidity and processes that turn current assets into 
cash quickly. Inventory reduction and turnover improvement are ways that can have major 
impacts in this area, and many channels exist for accomplishing them.
Joshua Korn contributed to this article


Dustin Wisotzky
Cornelius Herzog
Christian Jobst
STREAMLINING YOUR 
SUPPLY CHAIN WITH 
WAREHOUSE AUTOMATION
The secrets of the fully automated warehouse
INNOVATION


Streamlining Your Supply Chain with Warehouse Automation
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The goal of full warehouse automation might soon be in sight, at least for some. 
The idea of automating the warehouse is almost as old as logistics and supply chain 
management itself. The prime motivation of automation is to increase warehouse 
productivity and profitability while improving overall efficiency in operations by eliminating 
human error. Rising labor costs, the challenges of constructing and operating warehouses 
in highly compact footprints in inner urban areas, and safety and environmental concerns 
have all fueled continued investment in increased levels of warehouse automation. That 
journey is now closing in on its end vision for a fully autonomous warehouse that can 
operate 24/7. 
WHERE AUTOMATION IS TODAY
Most warehouses have now automated at least part of their operation. Retailers and fast–
moving consumer goods (FMCG) companies often touch level 4 autonomy — where no 
human intervention is required — for at least some part of their operation. Warehouses 
at the leading edge deploy advanced hardware and software, where several hundred 
smart robots are deployed in the warehouse to store and pick goods in a complex, three–
dimensional bin system.
It would be incorrect to assume that this level of automation has been achieved in all 
industries, however. The challenges of warehouse automation are specific to the industry. 
(See Exhibit 1.) Not only does the current level of automation vary greatly by industry but it 
can also vary even within the business. For instance, while carmakers and tier–1 suppliers 
often achieve high levels of automation in picking small components using fully automated 
systems that shuttle between store locations, these same businesses manage a much 
lower level of automation when having to handle a component portfolio that varies in size 
and weight.
As a rule of thumb, it holds true that the larger the item and the more diverse the 
product portfolio in terms of volume or weight, the more difficult end–to–end warehouse 
automation becomes. 


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Exhibit 1: Characteristic levels of warehouse automation by industry
Description
Automotive
Machinery
Retail
FMCG
Manual warehouse
No automation used in the warehouse. 
All process steps are conducted by 
manual labour.
Assisted warehouse
Some process steps use mechanization 
to support manual labor, e.g., roller belts.
Partially automated warehouse
A part of the warehouse is automated 
while other parts use manual labour,
e.g., automatic high bay.
Highly automated warehouse
Combinations of several automated 
processes are used, e.g., automatic 
unloading of trucks and storing to high bay.
Fully automated warehouse
No manual labour except for IT/service 
mechanics in the warehouse.
1 Fast-moving consumer goods.
1
2
3
4
5
Source: Oliver Wyman analysis
CHALLENGES ON THE ROAD TO FULL AUTOMATION
Many solutions are now available “off the shelf”. The technology and systems needed 
to move a pallet automatically from a truck onto a conveyor and then into the storage 
warehouse in one seamless movement, one that then merges into automatic pallet 
storage within the warehouse, are readily available. The decreasing price of sensors, 
e–labels and machine vision systems ensure that the robots, automated machines and 
the various components of the automated system are all able to communicate with each 
other seamlessly.
The biggest challenge now facing warehouse operations is that many of these hardware 
andsoftware solutions are in effect “islands” — and there is no easy way to connect these 
islands to create a system that is fully autonomous. This is true especially for warehouses 
where the automation system has evolved over time, a situation more typical than not 
in most companies. The legacy of piecemeal acquisition ensures that it will inevitably be 
a major struggle to connect the patchwork of hardware, software, and IT–architecture 
solutions. This is a challenge full automation has to tackle. Thereby, it is of paramount 
importance for companies to develop digital supply chain capabilities, where not only 
the right hard– and software is required but also the right people and an organization 
that is capable of implementing and maintaining this setup.


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A second important issue is data: Poor data quality or data incompatibility can be the 
undoing of even the best of automation systems. Connectivity and data are the equivalent 
of the blood and the cardiovascular system of the autonomous warehouse. The hard truth 
is that almost all companies today struggle with getting their data right. At every step 
in the supply chain, it is essential to have accurate, real–time data, including for packing 
specifications and lot sizes. The data has to be exact in order to enable the machine 
intelligence to decide how to handle the various items. 
GETTING AUTOMATION RIGHT 
Compared to a conventional warehouse, a fully autonomous warehouse is more akin to 
a machine for production rather than being just a place for storage. Ensuring that the 
autonomous warehouse functions as desired requires the company to think afresh about the 
role of the warehouse itself — and link seamlessly into all adjacent processes. If the benefits 
of the autonomous warehouse are to be fully realized, it is necessary for the company to 
think about reshaping their operating model and accompanying organization, including the 
processes and IT systems, in order to ensure that they are all fully integrated. 
These challenges can make the strategy, design and implementation of warehouse 
automation appear particularly daunting, especially for large corporations, such as those 
in retail, automotive or manufacturing, that often have enormous warehousing footprints 
located at hundreds of different sites. 
THE PLACE TO START: TAILORING AUTOMATION 
TO BUSINESS AND SERVICE REQUIREMENTS
The vision of full warehouse automation is big lure for many Chief Operating Officers 
(COOs). The benefits are transparent, enabling a significant performance edge and future 
cost benefits. Yet full automation might not be desirable in all circumstances given the 
current state of technology. Depending on the industry, partial automation might well 
yield a more optimal outcome. To establish whether full automation is the right goal 
fo the business requires developing a full understanding of the company’s business and 
service requirements.


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Customer and service requirements vary significantly between markets, customer segments 
and product groups. Rather than a one–size–fits–all approach, leading players follow 
a segmented approach to warehouse automation, tailoring their warehouse designs to the 
specific needs of individual channels, categories, and order profiles. They are careful to 
choose the right level of automation and the right technology for each of their segments, 
ensuring that what is implemented is able to provide the required degree of flexibility 
for a large spread of order profiles, fulfillment speeds, and scalability. 
The answer to warehouse automation is more often than not to adopt a tailored 
approach, one located in the specific service requirements of the company. By thinking 
of the warehouse automation challenge in this way, the COO is able to start determining 
the most appropriate automation strategy for the company. Done right, this will set the road 
to full autonomy.




FOOD RETAILERS  
NEED TO ACT NOW  
FOR A NET-ZERO FUTURE 
What to keep in mind when crafting transition plans
SUSTAINABILITY
Suzanne van der Meijden
Coen de Vuijst
Julien Hereng


Food Retailers Need to Act Now for a Net-Zero Future 
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Agriculture and food systems are responsible for 31% of human–caused, greenhouse gas 
(GHG) emissions and are also among the biggest drivers of water use, land–use change, 
habitat destruction, and biodiversity loss. That’s according to the latest CDP Europe report, 
which surveyed some 1,500 companies representing around 75% of European market 
capitalization on corporate efforts to cut emissions. The report is produced by global 
carbon monitor CDP and consulting firm Oliver Wyman.
While around half of the European companies that filled out the CDP questionnaire 
reported having 1.5°C climate transition plans, under 5% demonstrated advanced progress 
in developing ways to connect their transition plans with business plans. According to the 
report, the food industry has one of the widest gaps between its ambition to cut emissions 
and its practices.
This year’s report featured a deep dive on grocery retail, describing the sector as strong 
on intent, but failing to translate the desire to cut emissions into action. In this deep dive, 
we will highlight key conclusions of the CDP report and next steps retailers should take.
Exhibit 1: Food retailers intent and desire to cut emissions into action
Intent
Action
Climate
Engages with their supplier 
on climate-related topics
Includes climate KPIs 
in supplier contracts 
79%
94%
39%
37%
Indicates freshwater is 
important for direct use
Requests suppliers about 
water use data1
Water
72%
100%
39%
14%
Adopted a public commitment 
to reduce deforestation 
Embedded deforestation 
footprint monitoring activities
Forest
79%
87%
43%
20%
CDP respondent average
Grocery retail
1. Respondents indicating that they do not know if they request their suppliers about water use are marked as no.
Source: Oliver Wyman analysis; CDP data; retail sector deep dive
Grocery retailers are among the most value–chain dependent sectors in the economy, with 
97% of their emissions produced upstream in supply chains or downstream with customers. 
These are referred to as Scope 3 emissions, and for companies, these emissions are 
among the hardest to quantify and reduce because they are not in the direct control of the 
manufacturer or retailer.
In practice, most grocers are not yet creating the kind of contractual relationships with 
suppliers that leverage doing business with them as incentive to cut emissions and protect 
nature. More than 70% of grocery emissions are being generated by these suppliers. 
Downstream, too, grocers could incentivize customers to buy products with smaller carbon 
footprints through pricing, assortment, and promotion practices.


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THE KEY STEPS GROCERY RETAILERS MUST FOLLOW 
TO ACHIEVE CLIMATE GOALS 
To make meaningful steps towards closing the delivery gap, grocery retailers need to act 
now, detailing out how they will achieve their climate goals. For grocers the key efforts 
are likely to be through departments sourcing products and those merchandising them:
Develop a sustainable procurement strategy:
•	 Screen the assortment of products and determine how to make it more sustainable 
by finding new products or new sources of old products that will reduce their carbon 
footprints. This may require bringing new suppliers onboard with more sustainable 
operations or in areas that regulate impacts on nature. It also may involve relying more 
on private label merchandise where grocers have more control.
•	 Make demands on suppliers about practices deemed acceptable and set targets 
for reduction of emissions. Be clear about the consequences if suppliers fail to comply, 
which could involve cutbacks in business with the supplier or the delisting of the supplier
•	 Monitor the progress of suppliers through clearly structured, regular data exchanges and 
help the supplier, if necessary, to develop tools to measure progress
Transform merchandising and guide consumers in the right direction. Then leverage 
the extra efforts in negotiations to encourage suppliers to participate. For instance:
•	 Provide attractive placement and increase promotion for sustainable products
•	 Decrease promotions that encourage waste or promote unsustainable products  
•	 Adapt target margins for sustainable products to allow for more of them to be used
RETAILERS SHOULD KEEP THE FOLLOWING ELEMENTS 
IN MIND WHEN CRAFTING TRANSITION PLANS 
•	 Approach the transformation with both top–down and bottom–up strategies to create 
a culture of sustainability in which central management and operational staff are all 
working toward net zero
•	 Be transparent about the short–term financial implications as well as long–term finance 
and risk benefits of the transition with stakeholders including financial institutions, 
shareholders, employees, and even customers
•	 Prioritize battles and commit only to achievable and meaningful actions — avoid 
announcing small, token measures
•	 Bring consumers on board, and keep in mind that readiness strongly differs 
per geography
•	 Anticipate that this is an effort that must be sustained over decades and through 
successive generations of managers to be successful


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Food Retailers Need to Act Now for a Net-Zero Future 
As scrutiny of transition plans increases, grocery retailers will begin to feel the heat 
around emissions and their impact on nature. Being proactive will at least put companies 
on the right side of the debate.
Read more
STEPPING UP: STRENGTHENING EUROPE'S CORPORATE CLIMATE TRANSITION


Mehdi El Alami
Dustin Wisotzky
Florent Gallon
Stefano della Rossa
DELIVERY 
DECARBONIZATION  
PATHWAY
How can e–commerce delivery become carbon neutral?
SUSTAINABILITY


Delivery Decarbonization Pathway
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The breadth of products offered through e–commerce has expanded, and more categories 
are now available online, from a greater number of vendors around the globe. Online and 
offline shopping are more closely integrated, and second–hand goods are increasingly 
popular. More delivery options are available, and related services — such as tracking and 
rerouting — are becoming standard.
This growing diversity offers customers more opportunity and choice to find what 
they want. But it also makes it increasingly difficult for both shoppers and retailers 
to understand the environmental impact of online purchases — and, more specifically, 
of delivery.
Our previous study of e–commerce, published in 2021, highlighted that in Europe, 
the environmental impact of e–commerce is positive: Online shopping in Europe generates 
an average of between 1.5 and 2.9 times less greenhouse gas (GHG) emissions than offline 
shopping. The study also demonstrated that emissions from both types of shopping vary 
significantly by product type, country, and — more importantly — customers’ locations 
and purchasing behavior.
The objective of this study is to go to a further level of granularity and focus on delivery 
emissions — to compare the emissions from various delivery models, to identify the main 
drivers, and to determine how delivery–related emissions of CO2 equivalent (CO2e) can be 
further reduced. Does home delivery generate higher emissions than pickup–point delivery 
(PUDO: pick up, drop off)? Does faster delivery result in higher emissions? How can the best 
technologies available today help reduce delivery emissions? What would it take to reach a 
30% reduction in emissions per parcel by 2030 compared to the 2019 level?
Several major parcel operators have committed to at least matching the EU Green Deal 
target of being climate–neutral by 2050. Among them, the sustainability leaders are aiming 
to reach net zero by 2040, 10 years earlier. Most initiatives address the entire value chain, 
encompassing renewable energy sourcing and production, carbon–neutral buildings, 
carbon–neutral packaging, and zero–emissions transport — and complementing these 
measures with carbon offsetting.
To substantially reduce delivery–related emissions, resources and efforts will need to be 
focused on the levers with the greatest impact, and multiple complex solutions will have 
to be navigated. This calls for a comprehensive assessment of the emissions generated 
by today’s delivery modes and an understanding of possible trajectories to decarbonize 
these modes.
This new study focuses on six countries, which together account for over 60% of European 
online sales: France, Germany, Italy, Spain, Sweden, and the United Kingdom. It is based 
on an analysis of official statistics, our proprietary CO2e impact model, data made public by 
delivery operators and confirmed through interviews, and consumer surveys conducted 
in 2022.


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CUSTOMER STANDPOINT: FASTER DELIVERY, 
MORE DELIVERY OPTIONS, MORE ATTENTION 
TO THE ENVIRONMENT
Beyond prices, consumers are often faced with three major questions when choosing 
a delivery option: Do they want a parcel delivered to their home — or to a nearby location 
where they can pick it up? How fast do they want to get their purchase? And what is 
the environmental impact of the available options?
Home delivery remains the preferred option for receiving an article purchased online 
inthe six countries studied. On average, more than 60% of e–shoppers say they favor it.
Fast delivery (in less than two days) is an important decision factor for 45% of e–shoppers 
and for up to 72% of frequent buyers. Next–day delivery is offered by 70% of the largest 
European e–stores.
87% of all e–shoppers are keen to change their habits if it can reduce their environmental 
impact. Their preferred actions are, in order: grouping orders (26%), favoring national 
shipment (16%), walking to a PUDO location (16%), and choosing an environmentally 
friendly merchant (16%). The least–popular action, preferred by just 13%, is a delayed 
delivery if it could reduce delivery emissions.
EMISSIONS FROM DELIVERY MODELS: SCALE AND COUNTRY 
ENERGY MIX MATTER MORE THAN SPEED
Our analysis shows that delivering at home a single, 1 kg parcel through a country’s 
most common postal system in two days or more generates an average of 1,075 gCO2e, 
a measure of the global–warming effect of greenhouse gases in terms of the equivalent 
quantity of carbon dioxide. Different delivery models were compared to understand the key 
emissions drivers. The results show that the best way to minimize emissions per parcel is 
not to reduce delivery speed but to optimize last mile delivery and use the largest possible 
vehicles in the linehaul and maximize their loads.
The second most important factor influencing emissions is the size and location of buildings — 
hubs, delivery stations, and pickup points. Buildings’ impact can be even greater than that of 
transportation, especially in countries that depend heavily on fossil fuels to produce electric 
power, such as Germany and Italy (500 to 600 gCO2e per parcel compared to the average of 
300 gCO2e per parcel).


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Delivery speed by itself does not drive emissions. When ranking delivery options by lead 
time for the consumer (the gap between ordering and delivery), emissions form a U–curve: 
the fastest and slowest options have the highest emissions (see Exhibit 1). The slowest 
option (international delivery in 10 days or more) has the highest emissions (six times 
the level of national delivery). National deliveries in one to four days generate emissions 
ranging between 10% lower and 15% higher than national standard delivery. Same day 
options can generate emissions up to three or four times higher than national standard.
Exhibit 1: Base case — Emissions by delivery model (gCO2e/parcel)
International 
delivery
by air
1,245
3,115
4,036
6,392
Europe 
cross-border
by road
1,075
National 
standard
1,075
National 
next day
1,011
Suburban 
distribution 
center
Standard 
PUDO
Standard 
locker
Quick 
commerce
Ship
from 
store
Delta vs National standard
+360-650%
+15%
N/A
+0-15%
-5%
-10%
-10 - +5%
-10 - +5%
+200%
+50-330%
Standard
with
microstation
968
965
982
4,978
7,985
1,230
4,617
International models
Home delivery models
Out-of-home models
Store-based models
Transport
Sensitivity range
X
Building
Packaging
Lead time (Days)
IT
National standard level
10
3-4
2-3
1-2
1-2
1-2
2-3
0-1
1,611
Source: Oliver Wyman 2023


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DECARBONIZATION PATHWAY: 30% REDUCTION 
BY 2030, THEN 60% REDUCTION AT FULL POTENTIAL 
WITH KNOWN TECHNOLOGIES
Reaching a 30% reduction in greenhouse gas emissions by 2030 would require action on all 
sources of emissions, through the generalization of today’s best practices, the deployment 
of emerging clean motorization technologies, and the improvement of countries’ energy 
mixes. This 30% goal has been derived from the various targets set by the EU Commission 
for trucks, vans, packaging, national energy mixes, and other factors.
In the long term, pushing decarbonation drivers to the maximum level technically possible 
could lead to a reduction in overall emissions of between 55% and 60% to 448 gCO2e. 
That would leave 40% to 45% remaining before full carbon neutrality is achieved, through 
new technologies or infrastructure that is even more energy efficient.
Exhibit 2: Parcel delivery decarbonization roadmap by country (gCO2e/parcel)
2030 milestone
Average long-term 
emission reduction
Emission reduction
gCO₂e/parcel today
1,600
600
1,400
1,200
1,000
800
400
200
0
0
10%
20%
30%
40%
50%
60%
70%
France
United Kingdom
Germany
Sweden
Spain
Italy
Source: Oliver Wyman 2023 


Delivery Decarbonization Pathway
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This report is the result of an independent study led by Oliver Wyman. It was conducted over 
a 12–week period and commissioned by Amazon. The methodology has been defined by 
Oliver Wyman independently of Amazon. The analysis, conclusions, and projections are those 
of Oliver Wyman only. The analysis is based on official statistics up to 2021 (unless stated 
otherwise) and publicly available information. The study does not use any private information 
from Amazon or other retailers or transport operators. Consumer behavior data is based 
on proprietary surveys conducted by Oliver Wyman in 2022 across Europe (France, Germany, 
United Kingdom, Sweden, Italy, Spain).
Read more
DELIVERY DECARBONIZATION PATHWAYS


CONSUMER AND HOME 
ELECTRONICS — 
GOING FULL CIRCLE
Joint study from GFU and Oliver Wyman
SUSTAINABILITY
Dr. Martin Schulte


© Oliver Wyman
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Contents
Consumer and Home Electronics — Going Full Circle
The concept of the circular economy, where materials and products are reused and recycled 
for as long as possible, is certainly a noble one. However, our latest research revealed that 
some countries still have work to do to achieve this ideal. Even in Germany, the supposed 
“world champion of recycling,” a third of the country’s old kitchen appliances, washing 
machines, and entertainment electronics — and an even higher share of smartphones — 
are not recycled. The material value of discarded devices amounts to €5 billion nationwide.
The primary reason for this waste of resources is a lack of awareness about recycling 
options. In our recent survey, conducted with the electronics industry trade group gfu 
Consumer & Home Electronics, which involved 1,000 consumers from Germany, the United 
Kingdom, and France, it was found that one–quarter of the respondents did not know 
ecologically sensible ways to recycle electrical devices. That was especially true for younger 
people. Only half of adults under 35 knew how to recycle a large kitchen appliance.
Exhibit 1: Overview of consumers recycling knowledge
Large kitchen
appliance
70%
Consumer
electronics
69%
Mobile
phones
72%
Washing
machines
69%
Source: Oliver Wyman Consumer Survey 2023
Germany is a country of bulky waste collection. But there is a 
lack of implementation when it comes to recycling electrical 
appliances. At the same time, younger people are taking a more 
holistic approach to the circular economy by buying refurbished 
devices or renting instead of buying them.
Dr. Sara Warneke, Managing Director, GFU


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Exhibit 2: Number of unused or broken appliances in homes
Plus: Rare earth minerals, such as Neodymium, Cerium, Yttrium and more.
45 kg
Steel
4 kg
Copper
3 kg
Aluminium
11 gr
Lithium
0.3 gr
Gold
0.6
Washing
machines
0.7
Large kitchen
appliance
1.1
Small kitchen
appliance
1.7
Consumer
electronics
2.0
Mobile
phones
Source: Oliver Wyman Consumer Survey 2023
 
Many e–waste recycling options, including returns to electronics stores, supermarkets, and 
the original manufacturers, were largely unknown to survey respondents. The results stand 
in sharp contrast with other categories of materials. Roughly 90% of all respondents knew 
how to properly recycle paper, plastic, glass, and clothing. To remedy this, consumers need 
more convenient and free options such as designated recycling points, e–waste collection 
days, and incentive systems.
A more effective resource utilization in consumer electronics 
requires greater efforts from manufacturers, retailers, and 
policymakers alike. Going full circle is in everyone's interest. If the 
European Green Deal is to be taken seriously, manufacturers need 
to rethink their product designs.
Dr. Martin Schulte, Partner, Oliver Wyman
In addition to issues with recycling, the study found that consumers get just 22% of their 
electronic devices repaired. The causes for that low figure are mostly solvable through 
efforts by legislators and industry to improve product repairability and increase the 
availability of spare parts.


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Exhibit 3: Main reasons for not repairing appliance
Too expensive
It cannot be repaired
I wanted a newer 
version 
Found nobody who 
could repair it 
No spare parts available
I did not want the item 
anymore 
Would have taken too 
long 
Washing
machine
Large 
kitchen 
appliance
Small
kitchen 
appliance
Consumer 
electronics
Mobile 
phone
I didn'r repair 
this because:
Too much effort
Source: Oliver Wyman Consumer Survey 2023
This is where the EU's Green Deal initiative comes in, with France leading the way as the pilot 
market for the "repairability index" introduced in 2021. Under this system, manufacturers 
calculate a score between 0 and 10 to each electronic device, indicating how difficult it is 
to repair and informing customers about their available repair options prior to purchase. 
It's been effective. In France, the repair rate stands at 32%, surpassing both Germany 
(22%) and the United Kingdom (24%). Additionally, there is growing pressure, especially 
among younger adults, for free returns and improved information about recycling options 
in general.
Read more
CONSUMER AND HOME ELECTRONICS – GOING FULL CIRCLE


Simon Glynn
4 WAYS TO ALIGN
CORPORATE INTERESTS TO 
SCALE CLIMATE ACTION
The next stage of action for corporate climate leaders
SUSTAINABILITY


4 Ways to Align Corporate Interest to Scale Climate Action
© Oliver Wyman
66
Contents
Originally published in World Economic Forum 
The step change in corporate climate action in the past few years has been extraordinary. 
Yet we are more than halfway through the critical period between the 2015 Paris Agreement 
and 2030, and emissions are still rising. Clearly, the world needs to scale up.
For our research report on Climate Action At Scale , launched at Climate Week NYC, 
we spoke to climate and sustainability practitioners from some of the world's largest 
corporations on their experiences in making this shift. They recognize that what needs 
to come next will be qualitatively different from what we have seen so far. In a survey 
of 200 climate practitioners, half see decarbonization as being a serious challenge — 
either an “existential threat” or “highly concerning” — by 2030, while a third already see it 
that way.
They are also clear about what is needed, what they can do and where they depend 
on others. Here are four lessons we learned:
1.	 You can’t act at scale against your interests. Leaders at scaling up are creating 
the conditions for corporate and climate interests to align
Doing something because it is the “right thing” is a recipe for incrementalism. Trying to act 
at scale on that basis creates justifiable resistance, because the pressure to perform 
commercially is too strong. This resistance fades when a company’s corporate interests 
and climate interests coincide.
The strongest examples are in B2B businesses that are finding profitable ways to act 
as decarbonization service providers for their corporate customers. Interests might align 
for Ball Corporation, for example, if investment in building a circular economy in aluminum 
displaces the use of competing, less recyclable materials in beverage packaging. Interests 
might align for Maersk if consumer brands concerned about their own carbon footprints 
pay a premium for shipping powered by biofuels rather than fossil fuels.
2.	 You can’t achieve climate action at scale just by reducing. But you can by building
Emission reductions are critical, but reducing to zero means doing something differently, 
not just emitting less. Scale leaders embrace the creative destruction that typically drives 
transformation and innovation. It’s about renewal: of the business, the industrial sector it 
operates in and the broader economy. At the core, it’s about new value propositions that 
companies have developed. These include offerings that grow the share, whether or not 
at a price premium, of low–carbon solutions at the expense of higher–carbon alternatives, 
and propositions that save money through operational efficiencies, usually in energy but 
also in people and materials.
Sodexo, for example, is reducing its Scope 3 emissions by rebalancing the food it serves 
in clients’ offices, schools and other institutions. It is introducing “low carbon meals”: 
not plant–based or vegetarian diets, but a shift in the balance of what is on the plate toward 
less meat and more vegetables. The initiative takes a big investment in the reskilling 


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of its cooks, but it pays for itself in the competitive proposition for corporate clients, 
and in the shift from animal to vegetable protein, in addition to the decarbonization benefit.
3.	 Leaders in climate action at scale are adopting new business designs, using new 
mindsets to earn new rewards
As one practitioner put it: “What we can do a traditional business case for, we’ve done.” 
To go beyond, leading organizations are open to new ways of thinking — about risk and 
uncertainty, about what makes a business case and about the capabilities that will matter 
in the future. We identified a wide range of arguments used to support investments at scale 
that would not convincingly generate a competitive financial return relative to the baseline 
of today’s business.
Businesses that are moving ahead are instead using arguments based on:
•	 Competitive differentiation: Positioning to meet new demand from business customers.
•	 Protecting revenue: Investments to preserve the company’s licence to operate as 
stakeholder expectations change.
•	 Enabling revenue: Investments without which some of the value–creating visions 
described earlier would not be viable.
•	 First mover advantage: Investments to learn, demonstrate and lead.
•	 Anticipating or influencing regulation: Take action to remain competitive in the face 
of future regulation or carbon pricing.
•	 Delegating investments: Impose decarbonization requirements on the supply chain.
•	 Avoiding stranded assets. Move forward to avoid being left behind.
•	 Filling the return gap. Structure or fund an investment that gets an innovative solution 
to a tipping point, making a non–commercial solution commercially viable.
4.	 Climate action at scale depends on investors, policy–makers and other players for 
solutions as well as profitability. Companies can’t do it by themselves, but they can 
show the way
In the absence of much pull from the end consumer, which nobody is expecting, 
these corporate initiatives are built on two insecure foundations: continuing investor 
commitment and evolving public policy. “Creating the conditions”, as we described in the 
first point, may mean bringing about whole ecosystems, regulatory environments and 
financing, not just new customer value propositions.
The appetite is strong for a clear policy environment that will make companies’ plans 
for climate action at scale viable, both practically and commercially. Meanwhile, the leading 
companies we interviewed are not passively waiting. They are positioning themselves, 
making the moves they can, and working together with business partners, investors and 
policy–makers to shape a future in which they can scale up their climate transitions.
Read the original piece Here


Michael Lierow
SECRETS OF EFFECTIVE 
LEADERSHIP IN TIMES 
OF CRISIS
How leaders can respond to unexpected events
LEADERSHIP


Secrets of Effective Leadership in Times of Crisis
© Oliver Wyman
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Contents
The past few years have sprung plenty of surprises on business leaders – COVID-19, the 
subsequent supply chain crisis, and then, once everything looked like it had startled to 
settle down, the massive disruption from the war in Ukraine. The highest inflation for 
several decades, increased interest rates, and a new international banking crisis resulting 
from poor bond yields have been poured onto the mix, adding fuel to the fire. And for many 
businesses what is burning is margin.
These challenges have stretched business leaders. The world has moved from a time 
where an occasional crisis might be expected to one where continuous crisis management 
is rapidly becoming the norm. In this article, we explore the personal challenges leaders 
face during a crisis and the innovative approaches required to lead effectively in these 
situations. 
UNEXPECTED DEMANDS ON LEADERSHIP
In troubled times, as the business environment moves from the familiar to uncharted 
territory, leaders are called upon to show ingenuity in their responses. Dealing with the 
complexity and uncertainty produced by a crisis, let alone a whole string of them, demands 
not only a willingness to show flexibility but also knowledge of how to demonstrate the 
leadership required. This is both contextual and personal.
Becoming more effective requires increasing the range of your responses. This in turn 
demands increased self-awareness about how you act when under severe pressure.
To respond appropriately to the unexpected often requires doing something new and 
untried. In a crisis, nothing is fixed. But without adequate personal preparation, our 
instincts and habitual actions are always capable of undermining even the best-laid plans. 
Rehearsal in responding to the unexpected can prepare us for the real event.
CHARACTERISTICS THAT ARE IMPORTANT FOR A LEADER 
IN A CRISIS
Here are a few suggestions on how to prepare yourself for a crisis drawn from an effective 
“leadership workout” carried out by a successful COO. The exercises carefully combine 
our right-brain capacity for sensing and feeling with more left-brain cognitive and 
analytical approaches.


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Become familiar with the unfamiliar: Start by recognizing your comfort zones, as these 
tend also to be our default options in times of crisis. What is your preferred leadership 
style when hard pressed? What do you do, what do you say, and what do you not do? What 
alternative ways of leading might be more effective?
Get comfortable with the uncomfortable: The goal here is to turn our sense of stress 
and discomfort into our ally. In past crises, what feelings and thoughts distinguished 
the moments when you have felt, or have actually been, out of your depth? Label 
this vulnerability for what it is. Recognize how stress affects you physically and label 
these feelings as your personal “danger signal”, the “red flag” that can alert you to 
impending crisis.
Tune into the stressful moment: The goal is for you to become aware of your danger 
signals as early on as possible. Once you have identified what happens to you in stressful 
moments during times of crisis, learn to recognize this feeling in everyday circumstances. 
What can you do to modify how you respond so as to ensure that the danger signals are of 
benefit to you and an ally during crisis?
Limber up the agility muscle: The goal is to become more flexible in your leadership 
responses in changing circumstances. From past experience, what are your own red flags 
telling you not to do? Practice alternatives. Try out a number of different leadership styles 
and become familiar with how this makes you feel and how it affects others.
Act expansively when under pressure: Most of us, when under severe pressure. We 
narrow down our options and revert to well-tried solutions. We need to train ourselves to 
do the opposite, to open up the solution space during such times by involving others in 
tackling the challenges. Who is it that you will turn to for extra input during a crisis? Who 
has complementary skill-sets and can bring a different perspective? What novel approaches 
are you willing to embrace?
The “leadership workout” will help encourage the practice of right-brain approaches that 
are unfamiliar to many leaders. This practice is in direct contrast, however, to the impulsive 
behavior typified by following our “gut instinct”. Our first responses are sometimes the 
wrong ones. The testing of our potential responses prior to enacting them, to establish 
whether they are appropriate, remains always the first duty of a responsible leader.
For more practical advice on how to effectively lead in times of a crisis, read our in-
depth analysis.
Read more
SECRETS OF EFFECTIVE LEADERSHIP IN TIMES OF CRISIS


Hunter Williams
UNDERSTANDING AI’S IMPACT 
ON JOB AND INDUSTRY  
TRANSFORMATION
How the next GPT will reshape our economy
LEADERSHIP


Understanding AI’s Impact on Job and Industry Transformation
© Oliver Wyman
72
Contents
In an intriguing twist of historical irony, the product that introduced generative AI to the 
world is aptly named ChatGPT. Within this context, GPT stands for “generative pre–trained 
transformer,” a term for a class of large language models (LLMs). However, in the annals of 
science and technology, “GPT” has long held another meaning: “general purpose technology.” 
These are innovations with applications so sweeping that they affect entire economies and 
civilizations. Examples of GPTs in this sense include the wheel, the printing press, the internal 
combustion engine, and the internet. The question now arises: will generative AI become 
another GPT, with similarly far–reaching implications and impacts? If so, how will it affect 
today's industries, and what can business leaders do to anticipate its impacts?
The impact of AI on various jobs and industries has been a topic of much discussion. 
Business leaders face hard decisions on how much to invest in deploying AI, where to focus 
the efforts, and how to manage the risks.  For private equity investors and other financial 
sponsors, understanding how their portfolio is exposed to AI’s risk and opportunities is 
crucial so the right investment decisions can be made and the right guidance given to 
portfolio companies.
To simplify this complex topic, we believe two dimensions are worth considering: first, the 
degree to which AI is likely to impact a particular industry, and second, the extent to which 
total demand in an industry is likely to expand given greater productivity (and therefore 
lower costs) due to the deployment of AI. 
HOW AI WILL IMPACT AN INDUSTRY
The first dimension has been a topic of extensive academic research, examining the nature 
of jobs in an industry and their substitutability with AI. While many recent technological 
innovations have displaced lower earners or more blue–collar jobs — think self–order kiosks 
at fast food restaurants — generative AI's impact is expected to be greatest on middle–
skilled, white–collar jobs. The effects of AI will also be felt in management structures: fewer 
middle managers will be needed if (for example) 10 AI–turbocharged programmers can soon 
do the work of 50 today. Some jobs have more “exposure” to the potential impacts of AI than 
others, and this can be extrapolated to the industry level based on the job mix in a given 
industry. To quantify these differences, we have leveraged the AI Industry Exposure (AIIE) 
index, created by Edward Felten, Manav Raj, and Robert Seamans in their academic research 
first in 2021 and updated it to reflect the impact of LLMs specifically in 2023. Their work 
found that janitorial services, meat processing, and coal mining (to take three examples) 
should see less impact from AI while accounting, commercial banking, and legal services will 
see far more. 
But we also need to consider the second–order impacts on industries of “AI shock.” How long 
will enhanced productivity boost margins before being competed away? And what industries 
will grow most as a result of higher productivity and, therefore, lower costs? Mechanical 


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weaving, for instance, did not just make clothes cheaper; it allowed demand for them to 
explode. Instead of owning just one set of work clothes and a “Sunday best," a typical worker 
could afford to have a different outfit each day, leading to today's closets full of clothes that 
may not even be remembered or worn.
AI–DRIVEN PRODUCTIVITY GAINS AND DEMAND EXPANSION
To estimate how “elastic” an industry is to growth from a positive productivity shock, 
Oliver Wyman examined the correlation between labor productivity and real output for each 
industry in the North American Industry Classification System (NAICS) hierarchy from 1987 
through to 2019 (to avoid COVID noise). Ranked in descending order from highest to lowest 
correlation, a higher score on the y–axis can be interpreted as more potential for industry 
growth in total output due to higher productivity. By plotting industries according to both 
their expected AI impact and their historical relationship with labor productivity, (Exhibit 2), 
valuable insights can be gleaned into what might be expected in different industries over the 
coming decades.
Exhibit 1: Industry–level potential impact of AI on productivity and total output
0
2
-2
1
-1
0.5
-0.5
2.5
1.5
-1.5
AI Industry Exposure (AIIE)
0
500
400
300
200
100
50
550
450
350
250
150
Productivity and Output Correlation (Rank)
Source: Occupational Heterogeneity in exposure to Generative AI” by Felten, Raj, Seamans, Bureau of Labor Statistics, 
Oliver Wyman analysis


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Industries on the far left, ranging from dry cleaning to janitorial services, will experience 
limited direct AI impacts. For these businesses, other levers, such as scale effects and 
non–AI automation, will be more important for growth and profitability. Executives in these 
industries need not spend as much valuable time and effort considering the impact of AI, 
and investors can view them as having a lower “AI beta.” Those in the upper left may want 
to focus more on labor productivity improvements (but not from AI) while those in the 
lower left are likely to find greater returns from other productivity levers.
However, for businesses in industries on the right side of the matrix, the impact of AI 
needs to be carefully considered. In the upper right, for an industry where productivity and 
growth are highly correlated, greater labor productivity will lead, over time, to lower prices 
and greater demand for those products or services. The size of the pie could grow quickly. 
Businesses here need to focus on how to rapidly adopt AI to drive productivity and enjoy 
first–mover advantages, gaining market share and winning more than their fair share of the 
future growth to come.
Conversely, in the bottom right quadrant, where productivity and growth are less linked, 
productivity improvements and lower costs may end up shrinking the overall pie as the 
same amount of work is done with fewer resources. The positive productivity shock can be 
seen as a deflationary headwind to growth in these saturated or inelastic markets. Many 
education and healthcare services appear in this quadrant, suggesting AI may help to 
“bend the cost curve” in these industries that have suffered, for so long, from the Baumol 
effect — wages rising in jobs that have seen little to no increase in labor productivity, 
in response to increased salaries in other professions that have experienced significant 
productivity growth.


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Exhibit 2: Industry–level impact by two digit NAICS classification
0
2
-2
1
-1
0.5
-0.5
2.5
1.5
-1.5
AI Industry Exposure (AIIE)
0
500
400
300
200
100
50
550
450
350
250
150
Productivity and Output Correlation (Rank)
Accommodation and food services
Administrative and waste management services
Agriculture, forestry, fishing, and hunting
Arts, entertainment, and recreation
Construction
Educational services
Finance and insurance
Health care and social assistance
Information
Management of companies and enterprises
Professional, scientific, and technical services
Real estate and rental and leasing
Retail Trade
Transportation and Warehousing
Manufacturing
Mining
Other services, except government
Utilities
Wholesale trade
Source: Occupational Heterogeneity in exposure to Generative AI” by Felten, Raj, Seamans, Bureau of Labor Statistics, 
Oliver Wyman analysis
Understanding how your industry or the industries of your portfolio could be affected by 
AI is one thing; figuring out what to do about it is another. At Oliver Wyman, we are 
supporting our clients in developing AI strategies, integrating generative AI into their 
operations, managing the related risks, and helping them redesign work to achieve the 
optimal combinations of AI, automation, and talent. And we have an interest in getting it right, 
given our industry (falling into “management, scientific and technical consulting services”) sits 
in the upper right. By staying ahead of the curve and anticipating the far–reaching implications 
of generative AI, businesses can position themselves for success in a rapidly changing world.
John Lester, Sian Townson, and David Waller also contributed to this article
Read more
NAVIGATING THE AI REVOLUTION


TRANSFORM RETAIL 
EMPLOYEES INTO POWERFUL 
COMMUNITY BUILDERS
LEADERSHIP
Laure Charpentier


Transform Retail Employees into Powerful Community Builders
© Oliver Wyman
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Contents
Now more than ever, people are looking for their tribe. They have an increased focus on 
communicating with others in groups and communities that they are comfortable with, a 
trend that accelerated when so many were isolated during the pandemic.
This shift also extends to the business world. The more a brand and its salespeople resonate 
with a customer’s culture and what they believe in, the more loyal the customer will be 
and the more they’ll spend. Research from the Oliver Wyman Forum, for example, finds 
that more than 90% of Gen Z consumers are willing to pay extra for brands that support 
the causes they care about. Savvy retailers have begun taking advantage by enlisting their 
employees to build tailored communities around their stores through social media and other 
outlets. Striking the right tone can provide a significant sales boost, as well as vastly improve 
loyalty and reduce customer acquisition costs.
WINNING THE TALENT WARS THROUGH COMPANY VALUES
The foundation for improving customer retention in this way starts with a loyal, engaged 
workforce. Even more than customers, workers want to be aligned with the company’s 
purpose. Employers must clearly communicate what the company stands for and 
demonstrate a commitment — to environmental causes, civil rights, or other important 
social and political issues — through real actions. There is 27 percentage point difference 
in employee retention between companies that provide purpose and meaning in their work 
and those that do not. Stronger sense of meaning and purpose also has a positive cascading 
effect on the customer experience.
This helps to build an emotional connection with employees and gives them a sense of 
belonging. It also fosters a greater feeling of achievement when they can see that their work 
really matters.
On the flip side, businesses that fail to adequately uphold their values and make meaningful 
connections put themselves at a considerable disadvantage in the war for talent. Salary 
raises and flexible schedules are not enough to placate workers as the quiet quitting trend 
gives way to what business author and former Unilever CEO Paul Polman calls “an era of 
conscious quitting.” For example, more than half of US employees say they would consider 
resigning if their company’s values did not line up with their own, Polman’s February 2023 
survey finds.


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Fortunately, empowering workers to build store-based communities (and even encouraging 
them to become micro-influencers of a sort) goes a long way toward addressing these 
difficult labor issues. Not only is it an excellent way to increase their engagement, but it also 
serves to attract new employees who are energized by the company’s purpose and values. 
Workers who are truly bought in to the message will pass it along to friends and social media 
followers, which can help attract new hires and lower recruiting spend. 
THE BLUEPRINT FOR A COMMUNITY-BUILDING CAMPAIGN
Workers who can serve as the company’s “value champions” also will perform their jobs 
better and be extra valuable as community builders. Finding the right people is usually the 
responsibility of store managers, who should find staffers that spend a lot of time on social 
media and are already well-versed in creating content on Instagram or TikTok. Taking on the 
role doesn’t usually come with a direct incentive for salespeople, but it can be a way for them 
move up the ranks more quickly and get opportunities outside of their regular department.
A large cosmetics chain provides a good model for how to implement a community-
building program. The company’s stores empower one of their beauty advisors to run 
their Instagram accounts; that person is responsible for attracting an audience of like-
minded clients to the store by making them aware of special offers and inviting them to 
events. Often the salesperson will bill the store as not just a retail space, but an enjoyable 
destination for members of the community to gather. A store might throw parties, host 
product launches, or in the case of the cosmetics company, bring in makeup artists to give 
clients free makeovers.
In some cases, multiple people from the same store could be assigned as representatives for 
different communities. For example, one salesperson reaches customers on TikTok who are 
young and identify as trendsetters, while another focuses on clients who use Instagram and 
are more interested in self-care products.
The store ambassadors must make themselves highly identifiable. There is no magic bullet 
for doing so, but perhaps the best way to start is by engaging with clients directly when 
they’re at the store. To help, the store can post signage encouraging shoppers to follow the 
salesperson on social media.


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HOW STORES MAKE COMMUNITY BUILDING SUCCESSFUL
The effort to bring customers together is especially effective in smaller cities that offer fewer 
opportunities to meet people. Of course, the concept is not to target just any customer; if 
the salesperson’s reach is too broad, the community aspect will get diluted. Finding the right 
mix is easier for brands whose customer bases are relatively narrow and well-defined. The 
store can organize its communities in a variety of ways and may designate a different day for 
each one to be the focus of its events and social media attention. Ideally the parent company 
will leave the planning to the local stores, which have a better sense of their clientele and 
foot traffic.
Throughout the process, proper messaging is key. The store manager controls the 
communication strategy but should give the employee a lot of freedom within it. Again, 
people will respond only if the salesperson’s message resonates well with their convictions 
and the type of products they’re looking for. Among other guidelines, messages should 
keep the brand highly visible, use language that’s properly tailored to the audience, and be 
mindful of diversity. Whatever the channel, the company’s image must be maintained, so the 
store should designate someone as a community manager to review content regularly.
Several metrics are available to get a picture of how successful a community-building 
initiative has been. Every store manager needs to check Google comments and ratings. 
They can also monitor comments on Instagram, TikTok, and other social platforms, and 
calculate engagement rates of their employees’ accounts. Promotions that were specifically 
advertised to a single community can also be tracked by traffic and revenue.
DEVELOPING CLOSER CUSTOMER RELATIONSHIPS
Many companies are further generating word-of-mouth business by empowering sales 
representatives to step up their one-to-one interaction with customers. Luxury businesses in 
Asia have been using this technique for the past few years. Salespeople contact their clients 
on WhatsApp whenever there’s a new product coming into the store, eventually developing 
more personal relationships akin to real friendships. In China for example, 61% of Gen Z 
shoppers are in contact with their sales assistant at least twice a month through instant 
messaging, according to an Oliver Wyman study.
Retailers and brands in large cities in Europe and the US have begun following suit more 
recently. It seems clear that efforts to develop such connections will only become more 
personalized and granular in the future. Building this level of client loyalty, the strategy will 
still depend on the company’s ability to first establish a solid bond with its employees mainly 
from its purpose, value, and ways of taking care of them. From that foundation will come the 
intended savings in talent or client acquisition costs and bigger numbers at the cash register.


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2
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Executive 
Summary 
In the 2023 edition of our annual research series, What 
matters to today’s consumer, we found that consumers were 
worried about the cost-of-living crisis, with this concern 
naturally feeding into their expectations and purchasing 
behaviors. Many were worried, in particular, about the cost of 
feeding their families and buying essential items.
This report is the third in our annual research series that 
examines evolving consumer behaviors. This year, we find 
that many of the behaviors we noted in our 2023 report have 
persisted, with consumers continuing to express concern 
about their personal financial situations amid rising inflation. 
However, this concern has dropped significantly in the past 
twelve months as just 43% of consumers worry their personal 
finances will worsen over the next 6–9 months, compared 
with 80% who were concerned that they would worsen in the 
equivalent period last year. 
New to this year’s research, we also explore the rise of 
generative AI and its impact on consumers’ purchasing 
behaviors. What we found is that around one in five 
consumers has used generative AI to shop and just over half 
of users have already acted on product recommendations 
made by generative AI tools, such as ChatGPT, with 55% of 
Gen Z having bought products recommended by generative 
AI tools.
Social commerce is a retail channel that is growing in 
popularity, with 46% of Gen Z consumers having purchased 
a product via social media platforms. We also explore how 
consumers have become more sustainability-conscious, 
demanding greater transparency on product origin and 
business practices and processes. Around 60% of consumers 
want brands to play an active role in consumer education and 
awareness in this regard. 
We highlight three opportunities for brands and retailers 
to capitalize on these evolving trends. First, companies can 
identify and adopt innovative technological solutions to 
reduce costs, with savings passed on to consumers. New 
technologies such as generative AI are critical to businesses’ 
becoming more customer centric. Second, brands and 
retailers can unlock channel growth by prioritizing social 
commerce, as this is a key area for channel growth, for 
example using influencers to amplify product promotions. 
Finally, organizations can educate consumers on the 
sustainability impact of their shopping and, in particular, seek 
to reduce food waste.
3
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Introduction 
In this year’s report, we explore the impact of the cost-of-
living crisis on consumers and examine their strategies for 
coping with it with the aid of technology. We also examine 
the influence of generative AI on shopping behaviors 
and habits and look at the areas in which consumers use 
generative AI in their shopping experiences. The impact of 
social commerce – especially on Gen Z – is also a focus of this 
report. Finally, we examine the way in which consumers are 
becoming more conscious of the impact of their purchases 
and are increasingly demanding a positive attitude towards 
promoting sustainability on the part of the brands they use. 
To address these themes, we conducted a global survey of 
more than 11,500 consumers over the age of 18 across 11 
countries: Australia, Canada, France, Germany, Italy, Japan, 
the Netherlands, Spain, Sweden, the UK, and the US. To 
qualify for inclusion in the survey, consumers must have 
purchased groceries and/or health and beauty products in 
the preceding six months. For more details on the survey 
sample, please refer to the Appendix.
We close this report by suggesting the key actions for brands 
and retailers to consider in order to manage and adapt to the 
ongoing shifts in consumer behavior.
4
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Introduction 
This report explores five broad trends:
Consumer worries around 
cost of living 
The rise of social 
commerce especially 
among Gen Z 
Use of generative AI in 
shopping 
Consumer awareness 
about the environmental 
and societal impact of 
their purchases
What makes for a positive 
shopping experience in 
the post-digital age 
1
2
3
4
5
5
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


CONSUMER WORRIES AROUND 
COST OF LIVING ARE STILL HIGH 
BUT HAVE EASED SLIGHTLY
01
6
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


The cost-of-living crisis 
continues to seriously 
impact consumer 
sentiments but there is 
some relief
Overall, 52% of consumers are extremely concerned about 
their personal finances compared with 61% last year. In the 
US, the share has dropped to 53% from 65%. Consumer 
spending, which accounts for more than two-thirds of US 
economic activity, accelerated 0.7% in September 2023.1  
In France (55%) and Spain (59%), this share is higher. In the EU, 
consumer food prices were 17% higher, year on year, in April 
2023. The prices of basic food items in the EU have shot up: 
e.g., sugar has risen by 55%, fresh whole milk by 25%, eggs by 
23%, and potatoes by 20%.2 Alexandre Bompard, Chairman 
and CEO of French supermarket chain Carrefour, comments: 
“We are seeing a non-spending tsunami in France. When 
people go without essential goods, one must act.” 3
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Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Of consumers in the lower income range (less than $20,000), 
66% are more concerned about their personal financial 
situations, which is the highest proportion among all income 
brackets. This concern about personal finances is more 
pronounced among Millennials (58%), Gen Z (56%), and Gen X 
(54%) than among Boomer consumers (42%) (see Figure 1). 
Overall, 43% of consumers fear their personal finances will 
worsen in the next 6–9 months, far below the 80% last year. 
In the US, 38% of consumers agree with this compared to 
55% in the previous year. Brian Cornell, CEO of US retailer 
Target, sums it up aptly: “As we look at the consumer 
landscape today, we recognize the consumer is still 
challenged by the levels of inflation that they’re seeing in 
food and beverage and household essentials.” 4
61%
52%
60%
56%
66%
58%
64%
54%
55%
42%
66%
63%
61%
49%
55%
38%
SHARE OF CONSUMERS WHO AGREE WITH THE STATEMENT: "I AM EXTREMELY CONCERNED ABOUT MY 
PERSONAL FINANCIAL SITUATION."
High income
(More than
$100,000)
Medium income
($35,000 –
$100,000)
Low income
(Less than
$35000)
Boomers
(Age 57+)
Gen X
(Age 41–56)
Millenials
(Age 25–40)
Gen Z
(Age 18–24)
Overall
November 2022                 November 2023
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023; N = 11,681 consumers: 1,048 Gen Z 
consumers; 3,358 Millennial consumers; 3,586 Gen X consumers; 3,689 Boomer consumers; Capgemini Research Institute, What 
matters to today’s consumer, January 2023; N = 11,300 consumers: 992 Gen Z consumers; 3,264 Millennial consumers; 3,332 Gen X 
consumers; 3,712 Boomer consumers.
FIGURE 1.
Consumers are less concerned about their personal financial situation this year
8
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


70%
66%
66%
64%
63%
62%
56%
54%
44%
32%
SHARE OF CONSUMERS WHO AGREE WITH THE FOLLOWING STATEMENTS
I have used “buy now, pay later” payment methods
I am looking to buy smaller quantities each time
I am spending more time searching online to find deals and discounts
I am spending more time shopping at different physical stores to find
deals and discounts
I am buying products from hypermarkets and discount stores, rather
than buying them from specialty grocery stores and convenience stores
I am buying cheaper private-label or low-cost brands over name brands
I go to the store and spend only what I have
I am delaying purchases of luxury items
I am cutting back on non-essential items
I am making fewer impulse purchases
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 2.
Consumers exhibit stringent behaviors in response to the cost-of-living crisis
Consumers continue to be 
stringent about their 
purchases
63% of consumers in our survey are buying private-label 
or low-cost brands over named brands this year, compared 
to 65% the previous year. As many as 70% of consumers 
say they are making fewer impulse purchases and 66% are 
cutting back on non-essential items, compared to 73% and 
69%, respectively, in the previous year (see Figure 2). Jeff 
Gennette, CEO of US retail group Macy’s, notes that, over 
the past several quarters, Macy’s customers have pulled back 
aggressively on discretionary purchases and have generally 
become more deliberate in their purchasing behaviors. 
“As we plan the remainder of the year and think about 
2024, we remain cautious of the pressures impacting our 
customers, especially at Macy’s, where around 50% of 
identified consumers have an average household income of 
$75,000 or under.” 5
9
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; Capgemini 
Research Institute, What matters to today’s consumer, January 2023; Capgemini Research Institute, What matters to today’s consumer, 
January 2022; Capgemini Research Institute, The great consumer reset: COVID-19 and the consumer products and retail consumer, 
November 2020. 
*Overall spending includes groceries and food supplies; household supplies; personal care products; over-the-counter healthcare 
products; furniture and furnishings; consumer electronics/white goods; apparel and accessories; at-home entertainment/
media; luxury products; takeaway food from restaurants; casual or fine dining; alcoholic beverages; tobacco; leisure travel; 
work-related travel.
FIGURE 3.
The share of consumers planning to cut discretionary spending has fallen in 2023
33%
32% 29%
25%
28%
37%
33%
35%
57%
53%
47%
58%
54%
44%
40%
SHARE OF CONSUMERS WHO PLAN TO REDUCE PURCHASES, OVERALL AND BY PRODUCT CATEGORY
Luxury products
Furniture and furnishings
Over-the-counter
healthcare products
Groceries and food
supplies
Overall spending*
November 2020                 November 2022                 November 2023
Consumers remain 
choiceful, particularly in 
discretionary categories 
Overall, 40% of consumers plan to cut spending across 
multiple categories, slightly lower than the 44% last year (see 
Figure 3). Consumers plan to cut spending on groceries (25%), 
over-the-counter (OTC) healthcare products (33%), furniture 
(53%), and luxury items (54%). CFO of US retailer Walmart 
John David Rainey comments: “At headline level, consumer 
spending has proven resilient but, below the surface, we 
continue to see signs that consumers remain choiceful, 
particularly in discretionary categories.” 6
10
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


64
%
expect retailers to alert consumers when 
brands start using lower quality ingredients/
raw materials without reducing the price
65
%
expect retailers to alert consumers when 
brands reduce the weight of a product without 
reducing the price
Consumers expect 
retailers to provide 
“shrinkflation” alerts 
Consumer expectations of retailers have increased; 65% 
expect retailers to alert consumers when brands reduce the 
weight of a product without reducing the price (a 
phenomenon known as “shrinkflation”) Carrefour, for 
example, now labels products to warn of this.7 64% expect 
retailers to alert consumers when brands start using lower-
quality ingredients/raw materials without reducing the price 
(so-called “skimpflation”). 
In line with the previous year’s expectations, 70% of 
consumers want more discounts on essential items and 67% 
want retailers to accept lower prices. 73% of consumers will 
be more loyal to companies that help them through this 
difficult time, and 71% of consumers plan to purchase more 
products/services from these companies. 
11
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


ONE IN FIVE CONSUMERS HAS 
ALREADY USED GENERATIVE AI 
IN SHOPPING
02
12
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


High consumer awareness of generative AI continues in 2023, 
with 86% of consumers saying they are aware of tools such as 
ChatGPT and DALL-E. We found that awareness of generative 
AI as a shopping tool is also high. 72% of consumers overall 
are aware of the use of generative AI in shopping experiences 
and 20% have used it already. 28% of consumers mentioned 
they are not aware of generative AI for shopping  
(see Figure 4).
Nearly 55% of Gen Z consumers have bought 
products recommended by generative AI tools
Among consumers who are aware of the use of generative 
AI in shopping experiences, and have already used it, 
66% are open to purchasing new products or services 
recommended by generative AI compared to 64% in April 
2023. The shopping experience of 55% of users has been 
notably enhanced by generative AI tools. Gen Z and Millennial 
consumers lead the pack, with 56% and 61%, respectively, 
believing that generative AI tools improve their user 
experience, as compared with 52% for Gen X and 43% for 
Boomer consumers. 
20%
33%
19%
28%
SHARE OF CONSUMERS WHO AGREE WITH THE STATEMENTS BELOW
I am aware of the use of generative AI in shopping 
experiences, and I have used it already
I am aware of the use of generative AI in shopping 
experiences, and I plan to use it in the future
I am aware of the use of generative AI in shopping 
experiences, but do not plan to use it myself
I am neither aware of nor have explored generative AI 
tools for shopping
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers
FIGURE 4.
One-fifth of consumers have used generative AI in shopping 
13
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Generative AI is transforming online purchase behaviors. 
Over half (52%) of users have replaced traditional 
search engines with generative AI tools for product 
recommendations (see Figure 5). Among these users, 
54% are men and 46% are women. Gen Z and Millennials’ 
preference for generative AI over traditional search engines 
for product/service recommendations are now at 54% and 
56%, respectively. 
A significant 52% of users have already acted on product 
recommendations made by generative AI tools, with 55% 
of Gen Z having bought products recommended by them, 
compared with 57% of Millennials. Among these users, 55% 
are men and 45% are women. 
German online retailer Zalando has launched a new fashion 
assistant, powered by ChatGPT, to enhance the consumer 
experience and improve consumer perceptions of the 
website. For instance, when a consumer enquires about 
suitable attire for a spring wedding in Spain, Zalando's 
fashion assistant can discern the formal nature of the event, 
anticipate weather conditions, and offer appropriate clothing 
GENERATIVE AI PREFERENCES BY AGE AMONG CONSUMERS, WHO ARE AWARE AND HAVE USED IT 
FOR SHOPPING
I have replaced traditional search engines with generative AI tools
for product/service recommendations
I have already bought products recommended by generative
AI tools
Global            Gen Z (Age 18–24)            Millenials (Age 25–40)            Gen X (Age 41–56)            Boomers (Age 57+)
52%
55%
57%
50%
52%
54%
56%
51%
37%
36%
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,299 consumers who are aware of 
the use of generative AI in shopping experiences and have used it already: 345 Gen Z consumers, 986 Millennial consumers, 635 Gen 
X consumers, 333 Boomer consumers.
FIGURE 5.
Generative AI is not just used by Gen Z
14
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


recommendations. The ultimate objective is to train this 
feature on consumer preferences, including favored brands 
and availability of products in their sizes, to deliver a more 
personalized product selection.8
Using a new chatbot based on OpenAI's ChatGPT-4 
technology, Carrefour’s online shoppers in France will be 
able to choose products based on their budget and food 
constraints or seek new menu ideas. The chatbot can also 
suggest anti-waste solutions for reusing ingredients and 
compose baskets based on specific recipes.9
Using a new Chatbot based on generative AI, Walmart’s 
online shoppers can compare and choose products, and 
receive recommendations based on their preferences 
and needs. It also lets customers try products virtually 
before buying. Walmart is testing this feature as part of its 
generative AI-powered search and shopping assistant.10
15
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers have a positive 
outlook on generative AI 
tools 
•	 A substantial 66% of users welcome product 
recommendations from generative AI.
•	 60% of users trust services and products  
suggested by generative AI.
More importantly, a substantial 59% of users seek 
personalized recommendations from generative AI that align 
with their personality (see Figure 6).
•	 55% of users seek advice in areas such as diet plans, 
make-up suggestions, and fashion combinations from a 
generative AI tool.
•	 58% of users say generative AI should be able to identify 
their brand and product loyalty, thereby recommending 
similar products.
GENERATIVE AI PREFERENCES BY AGE AMONG CONSUMERS, WHO ARE AWARE AND HAVE USED IT 
FOR SHOPPING
I would seek advice for my future shopping experiences from a
generative AI tool
I want generative AI to align with my current preferences
I am positively anticipating generative AI's ability to offer customized
fashion and home-décor recommendations 
I want generative AI to recognize my history with / loyalty to certain
brands and product types in order to suggest similar products
I would like a chatbot similar to ChatGPT from brands/companies
to ask questions and receive responses quickly
Global 
59%
58%
57%
57%
55%
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,299 consumers who are aware of 
the use of generative AI in shopping experiences and have used it already.
FIGURE 6.
Consumer preference for generative AI in different stages of the shopping experience
16
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,299 consumers who are aware of 
the use of generative AI in shopping experiences and have used it already.
FIGURE 7.
Consumer preference for generative AI tools for different tasks
SHARE OF CONSUMERS USING GENERATIVE AI TOOLS FOR DIFFERENT TASKS, WHO ARE AWARE AND 
HAVE USED IT ALREADY
42%
37%
36%
36%
36%
34%
33%
32%
31%
27%
Advertising collateral
Virtual try ons/make-up at home
Chatbot recommendations based on personal shopping history
Customized follow-up care and usage tips
Targeted advertising
Chatbot answering queries in real time
User-generated social media posts
Automated summary of product reviews
Tailored loyalty programs
Chatbot resolved post purchase queries
While consumers may not always be aware that the tools 
they use include generative AI, 42% of users have used it 
in a chatbot to resolve queries and many other tasks (see 
Figure 7).
60
%
of users trust services and products
suggested by generative AI
17
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


FIGURE 8.
Impact of generative AI on online shopping, for consumers who are aware and have used it already
(Continue on the next page...)
AWARENESS
Generative AI creates advertising
collateral
Chatbot answers queries in
real time
Targeted advertising
Tailored loyalty program
User-generated social media posts
PURCHASE
LOYALTY/ADVOCACY
Used by: Coca-Cola
Animated several classical art pieces for 
an advertisement1
Used by: Meraci
Employed an AI chatbot taking 
conversational input and follow-up 
questions about products4
Used by: Tesco
It uses data from various channels 
to create personalized promotions 
based on shopping behaviors5
Used by: GE Appliances
Flavorly AI generates dishes 
and combinations for 
customers based on what 
they’ve bought8
Used by: Google
Google Product Studio powered by 
generative AI empowers businesses of any 
size to create visual content tailored to 
their dynamic marketing requirements9
27%
29%
36%
42%
34%
40%
37%
45%
36%
43%
Sources: 
1. Forbes, “The amazing ways Coca-Cola uses generative AI in Art and advertising,” September 8, 2023.
2. Ecommerce News, “generative AI in Ecommerce: A look beyond texts,” July 3, 2023.
3. PYMNTS, “Luxury retailers try on AI to reduce returns,” June 16, 2023.
4. Modern Retail, “Retailers are using ChatGPT to help people pick what to buy,” April 27, 2023.
5. Analytics India, “How this company is redefining retail experience with generative AI,” May 5, 2023
18
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


CUSTOMER SUPPORT
Chatbot resolves post-purchase
queries
Used by: Macy’s
Employing an AI-powered shopping 
assistant to automatically answer queries 
about products and receive responses10
42%
49%
Automated summary of
product reviews
Customized follow-up care
and usage tips
POST-PURCHASE
Used by: Amazon
Offers concise summaries of 
reviews to improve CX6
Used by: Carrefour
Perfado AI-generated messaging 
to hyper-personalize the language 
for customers7
36%
42%
33%
40%
Chatbot recommendations based
on consumer queries
Virtual try-ons/make-up
at home
CONSIDERATION
Used by: Zalando
Fashion assistant can recommend 
products based on contextual 
clues2
Used by: Valentino
Autumn 2023 collection can be 
tried on virtually3
32%
40%
31%
39%
Share of people using generative AI tools for these tasks,
who are aware and have used it already
The satisfaction level of respondents with respect to generative AI performing these
tasks, who are aware and have used it already
6. Amazon, “How Amazon continues to improve the customer reviews experience with generative AI,” August 14, 2023.
7. Persado, “How motivation AI-Generated language helps Carrefour engage customers,” December 15, 2022.
8. Consumer Goods Technology, “GE Appliances and Google Cloud collaborate to create customized recipes using generative AI,” August 29, 2023.
9. PYMNTS, “Google turns product images into merchant sales using generative AI,” May 23, 2023.
10. CXOToday, “How generative AI is reshaping consumer insights and retail strategy,” November 1, 2023.
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,299 consumers who are aware of the use of generative AI in shopping experiences and have used it already.
19
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Key consumer challenges 
about generative AI
Extensive coverage of generative AI in the media means 
consumers are now more alert to the possibility of tools 
being used for unethical ends. 
•	 62% of consumers harbor concerns about generative 
AI producing false/misleading testimonials or reviews, 
compared with 30% in April 2023 (see Figure 9).
•	 The potential of generative AI to copy or clone competitors' 
product designs or formulas is a concern for 61% of 
consumers, compared with 27% in April 2023.
Source: Capgemini Research Institute, generative AI consumer survey, April 2023; N = 3,974 consumers who are aware of the generative AI 
tools and use them frequently; N = 1,247 (chatbots), N = 910 (gaming), N = 320 (search), N = 435 (text), N = 244 (generating synthetic data), 
N = 490 (video), N = 152 (images), N = 176 (audio); Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 
2,299 consumers who are aware of the use of generative AI in shopping experiences and have used it already.
FIGURE 9.
Using generative AI to provide false/misleading testimonials or reviews is one of the biggest worries for consumers 
KEY GENERATIVE AI CONSUMER CONCERNS, WHO ARE AWARE AND HAVE USED IT ALREADY
Lack of clarity on the sources used for training the generative
AI algorithms
Possibility of using deep fakes to create content without permission of the
involved individuals
Impersonation of individuals using generative AI to provide
false/misleading testimonials or reviews
Use of generative AI algorithms to copy/clone a competitor’s product
design/formula
Non-recognition/non-payment for artists/contributors whose creations
are used for training generative AI
Bias in the generative AI models leading to unrepresentative results
April 2023                      October–November 2023
30%
61%
33%
58%
27%
61%
30%
62%
25%
59%
25%
59%
20
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers also want generative AI tools to be created and 
distributed responsibly:
•	 A significant majority (70%) of users appreciate prior 
disclosure if their interaction will involve generative AI. This 
response has been consistent for some years: in 2018, 66% 
of consumers stated the same.11
•	 When interacting with organizations or brands via 
generative AI, 70% of users prefer the option to escalate to 
a human representative in case they are not satisfied while 
interacting via generative AI.
70
%
of users prefer the option to escalate to
a human representative in case they are not 
satisfied while interacting via generative AI
21
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


SOCIAL COMMERCE CONTINUES 
TO GROW DRIVEN LARGELY  
BY GEN Z
03
22
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Social commerce is picking 
up the pace
The global social commerce market was valued at $561 billion 
in 2021 and is projected to rise to $6,341 billion by 2030, 
showing a CAGR of 31.1% in 2022–30.12
BookTok, a reading suggestion platform from Chinese tech 
company TikTok, has become highly influential, with over 180 
billion viewers at time of writing. BookTok helped in the sale 
of an estimated 20 million books in 2021, representing over 
2.4% of total book sales for the year and nearly half of the 
book purchases from social media in 2021.13
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers: 1,048 Gen Z 
consumers, 3,358 Millennial consumers, 3,586 Gen X consumers, 3,689 Boomer consumers.
FIGURE 10.
46% of Gen Z consumers have already bought products on a social media platform
SHARE OF CONSUMERS WHO HAVE BOUGHT A NEW PRODUCT/BRAND THROUGH SOCIAL MEDIA, BY 
AGE GROUP
24%
46%
35%
21%
10%
Boomers (Age 57+)
Gen X (Age 41–56)
Millenials (Age 25–40)
Gen Z (Age 18–24)
Overall
Overall            Gen Z (Age 18–24)            Millenials (Age 25–40)            Gen X (Age 41–56)            Boomers (Age 57+)
23
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers have already bought products 
via social media platforms 
Social commerce refers to shopping experiences that occur 
directly on a social media platform, including clicking a link on 
a social network that leads to a retailer’s product page with 
an immediate purchase option.14
Around one-quarter of consumers have bought a product 
via a social media platform: 41% of consumers from Spain; 
30% from the US; and 28% from Sweden. More purchases 
are made by households with children (36%) than households 
without children (17%).
As many as 46% of Gen Z consumers surveyed have made a 
purchase on a social media platform in the past year. Almost 
48% of US Gen Z (aged 18‒29) say they will do at least some 
of their year-end shopping on social media platforms such as 
TikTok or Instagram.15
Overall, Instagram (62%) and YouTube (62%) are the preferred 
purchasing platforms across generations of consumers, 
followed by Facebook (55%) and TikTok (44%). Gen Z 
consumers show a strong preference for Instagram (70%), 
TikTok (63%), and YouTube (58%) for their purchases, whereas 
Millennials primarily prefer to use Instagram (67%) and 
YouTube (63%)(see Figure 11). The most strongly preferred 
platforms for Gen X and Boomer consumers are YouTube, 
Instagram, and Facebook.
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,774 consumers who have purchased 
on social media in the past year, 481 Gen Z consumers; 1,176 Millennial consumers; 766 Gen X consumers; 351 Boomer consumers.
FIGURE 11.
Consumers prefer Instagram and YouTube as purchasing platforms
CONSUMERS' TOP THREE SOCIAL MEDIA PURCHASING PLATFORMS
Instagram 
             YouTube 
             Facebook 
             TikTok
62%
62%
55%
44%
63%
36%
58%
70%
67%
63%
52%
49%
59% 64%
65%
35%
52%
64%
66%
23%
Boomers (Age 57+)
Gen X (Age 41–56)
Millennials (Age 25–40)
Gen Z (Age 18–24)
Overall
24
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,774 consumers who have 
purchased on social media in the past year. 
FIGURE 12.
Apparel and accessories is the most popular purchase category via social media
CONSUMER PURCHASE PREFERENCES VIA SOCIAL MEDIA
Occasionally purchased (3 to 7 times in the past year) 
Frequently purchased (8 times or more in the past year)
Groceries and food supplies
Personal care products
Health and wellness products
Apparel and accessories  
44%
42%
38%
36%
18%
19%
20%
22%
In the past year alone, consumers have made products and 
services purchases through social media across categories. 
Among consumers who have purchased from social media, 
apparel (62%), health and wellness products (61%), and 
personal products (58%) are the categories in which they 
have most frequently purchased more than three times in the 
past year. It is interesting to note that 58% of consumers who 
have purchased on social media have purchased groceries 
through it in the past year (see Figure 12).
Of Gen Z consumers, 51% have occasionally purchased 
apparel and accessories via social media, as compared to 23% 
of Millennials.  
Consumers in the United States have frequently purchased 
(8 times or more in the past year) groceries and food supplies 
(32%), personal care products (31%), and apparel and 
accessories (26%) via social media, making more purchases 
through this channel than consumers in other geographies. 
25
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Why consumers prefer to buy on 
social media platforms
Around 46% of Gen Z consumers and 44% of Millennials are 
discovering products via social media. Over half (56%) of 
consumers who have bought on social media say they have 
accessed reliable reviews through their social media feeds. 
Consumers feel that social media helps accelerate purchase 
decisions. Over half (53%) of consumers who have purchased 
via social media say they have been influenced by feeds, 
stories, reels, lives shows, and influencers in making 
purchases.  
French personal care organization L’Oréal has been investing 
heavily in “live commerce,” a type of social commerce, in the 
Indonesian market. L’Oréal has 14 different studios that live-
stream the brand's products. 
How are social media platforms 
using social commerce?
Social media platforms are integrating shopping features 
to cater to the impulse purchase behavior of consumers, 
while brands are setting up virtual shops on such platforms. 
Many social media platforms are running beta testing of 
their shopping features and slowly expanding to reach global 
markets. 
Livestreaming sales in the U.S. has been estimated to reach 
$50 billion in 2023 and are expected to account for more than 
5% of total e-commerce sales in the U.S. by 2026.16 In the 
US, TikTok, Amazon, Walmart, Shopify, and YouTube are all 
getting in on the game. “People are excited by what you’re 
seeing from China, where you see really high conversion 
rates on some of these experiences, much higher than a 
regular website would have. You’re seeing potentially up to 
40% in some cases,” comments Daniel Debow, Vice-President 
of Product at Shopify, which launched live-shopping 
capabilities with YouTube in July 2022.17
26
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: 
Amazon Live Shopping
1. Estore factory, “Prime day 2023 breaks all the records, makes history,” August 1, 2023.
2. Economic Times, “Flipkart big billion days vs Amazon Great Indian Festival: Sale discounts, card deals, 
and other details,” October 5, 2023.
Twitter (Now X) Shop
3. Retail Dive, “Twitter tests Shops feature,” March 10, 2022. 
4. TikTok, “Guess the shop,” accessed October 20, 2022.
Facebook Shop
5. PYMNTS, “Facebook shops top 1 million stores, 250 million users,” March 19, 2021.
6. Sprout Social, “6 masterful examples of brands selling on Facebook Shops,” April 6, 2022.
FIGURE 13.
Integrating social to retail and retail to social 
Instagram Shop
• Over 1.63 billion, or 70% of monthly active users have shopped on Instagram
• Top brands such as Adidas (34.2 million followers), Sephora (21.2 million 
followers) and Target (5.3 million followers) have set up shop in Instagram shop
Amazon Live Shopping
•  Amazon Prime live day streams had more than 100 million views in the US and 
India, with simultaneous viewing peaking at 57,000
• For the Great Indian Festival, Amazon Live, introduced in India in 2022, will 
present over 1,000 streams, featuring more than 300 influencers across 
categories including tech, gaming, fashion, lifestyle, home, sports, and beauty to 
assist customers in making informed purchases
Twitter (Now X) Shop
• In November 2022 Twitter collaborated with Walmart to broadcast the first shoppable 
livestream
• Verizon (1.5 million followers) is involved in the testing phase, showcasing 11 products
Facebook Shop
• Meta is driving in-platform shopping on Facebook shops through in-app checkouts 
• Around 1 million users make purchases from the shops monthly
• Top brands such as Burberry, Adidas, Lacoste and John Lewis & Partners have set 
up shops on Facebook
Tik Tok Shops
• In September 2023 TikTok launched shops in the US, UK, and parts of South-east Asia
• In the US, >200,000 sellers have signed up
• Sephora has teamed up with TikTok to launch a joint content-creation program
Pinterest Business
• Pinterest has signed a multi-year agreement with Amazon to enhance its 
shoppable content, making Amazon Pinterest's first third-party advertising 
partner
YouTube Shops
• YouTube has partnered with Shopify to enable onsite checkout for its sellers
• In June 2023, YouTube launched its first shopping channel, in South Korea
Instagram Shop
7. Capital One shopping, “Instagram Shopping Statistics (2023): User & revenue growth,” March 8, 2023.
8. USA Today, “Sephora enables Instagram checkout for easy shopping without leaving the app,” June 24, 2020.
TikTok Shops
9. Tech Crunch, “TikTok Shop officially launches in the US,” September 12, 2023.
10. Retail Gazette, “Sephora teams up with TikTok to launch content creator programme,” March 14, 2023.
Pinterest Business
11. PYMNTS, “Pinterest inks deal with Amazon Ads to fuel shoppable content,” April 28, 2023.
12. Hoot suite, “The Pinterest shopping features you should know in 2023,” March 8, 2023.
YouTube Shops
13. Tech Crunch, “YouTube rolls out new shopping features, announces partnership with Shopify,” July 19, 2022.
14. Economic Times, “YouTube to launch its first official shopping channel in South Korea,” June 21, 2023.
27
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Social media influencers 
are impacting consumers’ 
product discovery and 
purchasing processes 
In the six months preceding November 2022, social media 
influencers were holding sway on the buying decisions of 
consumers. The current survey suggests that this trend 
continues. 
In November 2023 we found through our survey that 33% 
of consumers had discovered a new product/brand on social 
media in the preceding six months, up slightly from 32% 
last November. Further, 21% had learned of a new product 
or brand from a social media influencer and 15% of the 
consumers purchased the new product. 
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; Capgemini 
Research Institute, What matters to today’s consumer, January 2023.
FIGURE 14.
Social media influencers are still holding sway
Purchased that new product/brand in the past six months 
Learned of that new product/brand from a social media
influencer in the past six months
Discovered a new product/brand on social media in
last six months
32%
33%
22%
21%
16%
15%
November 2022                 November 2023
28
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Social media and influencers carry 
much more weight with Gen Z
As per our previous survey in November 2022, 61% of Gen Z 
consumers discovered a new product/brand on social media, 
and 60% say the same this year. In our current survey, 45% 
of Gen Z say that they learned of a product from influencers, 
and 32% say they have purchased the new product (see 
Figure 15).
Since 2021, US beauty product organization Estée Lauder 
has been focusing on TikTok influencers to capture the Gen 
Z audience. As per Estée Lauder’s brand-equity data, Gen 
Z’s purchase considerations have been steadily rising since 
mid-2022. This suggests that Gen Z’s willingness to purchase 
Estée Lauder products rose throughout the second half of 
2022 and into 2023.18
Influencers impact consumers’ buying preferences
We found that 51% of consumers who have purchased 
on social media prefer to seek purchasing advice from 
influencers, claiming they give a clear breakdown of factors 
to consider before making a purchase. 
Almost half of consumers who have purchased on social 
media (48%) prefer to buy products directly from an 
influencer based on their live recommendation and live 
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 1,048 Gen Z consumers.
FIGURE 15.
45% of Gen Z consumers learned of a new product/brand from a social media influencer
60%
45%
32%
IMPACT OF SOCIAL MEDIA ON GEN Z CONSUMERS
Purchased that new product/
brand in the past six months 
Learned of that new product/
brand from a social media influencer 
in the past six months
Discovered a new product/brand
 on social media in the past six months
discount offers. More than half of consumers (51%) also 
look for their influencers' social media presence to search 
for discounts and offers. Consumers who have purchased 
on social media (48%) feel a sense of belonging to their 
community through interacting with live events organized 
by influencers. 
29
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Celebrity and influencer 
brands are attuned to the 
consumer mindset
Celebrities and influencers with huge numbers of followers 
are launching their own brands. In the US, having gained 
traction through digital sales and sales partnerships with 
chains such as Ulta and Sephora, some celebrity brands 
are now establishing their own physical locations, with 
76% locating their shops in malls. US Celebrity brands are 
estimated to occupy more than 300,000 sq ft of physical 
retail space.19
•	 Among celebrity brands, Kate Hudson's Fabletics has the 
biggest physical presence, with 95 stores; 
•	 Drake's October's Very Own is next with 11; and 
•	 Sarah Jessica Parker's SJP Collection has 6. 
30
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; 1,048 Gen Z 
consumers; 3,358 Millennial consumers; 3,586 Gen X consumers; 3,689 Boomer consumers.
FIGURE 16.
45% of Gen Z consumers have bought a product from influencers and celebrity brands 
20%
45%
32%
17%
6%
SHARE OF CONSUMERS WHO HAVE BOUGHT A PRODUCT FROM INFLUENCERS AND CELEBRITIES
Boomers (Age 57+)
Gen X (Age 41–56)
Millenials (Age 25–40)
Gen Z (Age 18–24)
Overall
Théo Spilka, Global VP of Strategic Licensing and Business 
Development at Swiss fragrance company Firmenich, is 
optimistic about the recent influx of celebrity brands, 
specifically in the beauty category. “Things have come back 
in a more managed way and this has coincided with a very 
strong trend in beauty companies, where the celebrity will 
invest in the brand themselves.” 20
Celebrity beauty brand sales increased by 33% between 
2021 and 2022, with overall sales hitting $762 million in 2022 
alone. Since 2019, there have been 42 celebrity beauty brand 
launches, including four new launches for the current year to 
June.21,22
Consumers have already started buying 
from celebrity and influencer brands
Consumers across generations have started buying from 
celebrity and influencer brands. One-fifth  of consumers have 
bought products from such brands in the past year, with Gen 
Z (45%) showing the highest interest, followed by Millennials 
(32%)(see Figure 16).
31
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


In the past year alone, many consumers have already made 
purchases in various product categories from influencers and 
celebrity brands more than three times. For example, 45% of 
consumers have purchased personal care products three to 
seven times from celebrity and influencer brands in the past 
year (see Figure 17). 
Top categories that have been frequently bought (more than 
three times) by consumers, who have made purchase from 
celebrities last year, are personal care products (66%), apparel 
and accessories (63%), and groceries and food supplies (60%).
Celebrities and influencers take advantage of their follower 
bases to launch their brands and convert them into sales:
•	 Kylie Cosmetics smartly tapped into founder Kylie Jenner's 
300 million+ Instagram following and beauty industry 
connections to preview products and generate hype. 
Shoppable Instagram posts turned interest into sales. 
Kylie also partnered with mega influencers (including her 
sisters) to co-create products and advertise launches to a 
combined audience of 500 million+ followers.23
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 2,365 consumers who have bought 
from celebrity/influencer brands.
FIGURE 17.
Purchase preferences by product category for consumers who have bought from influencer and celebrity brands
CATEGORY-BASED PREFERENCE FOR CELEBRITY AND INFLUENCER BRANDS, ON THE PART 
OF CONSUMERS
Occasionally purchased (3 to 7 times in the past year)
Frequently purchased (8 times or more in the past year)
Furniture and furnishings
Luxury products
Alcoholic beverages
Casual or fine dining in restaurants
Household supplies
Groceries and food supplies
Apparel and accessories
Personal care products
45%
21%
43%
20%
34%
26%
39%
16%
37%
15%
31%
14%
31%
13%
31%
11%
32
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers trust and relate more with 
influencer and celebrity brands
Consumers across generations feel they can trust and 
relate to celebrity- and influencer-promoted brands. 54% 
feel connected with the celebrity/influencer through the 
transaction and 58% say that they are encouraged to buy 
products related to the celebrity/influencer’s field/expertise.
Over half (55%) say they trust the celebrity/influencers 
and this trust converts to willingness to buy from them. 
Moreover, 54% of consumers who bought from celebrity 
and influencer brands say that they prefer such brands to 
traditional brands, and 55% of such consumers trust that the 
celebrity/influencer brands will be of good quality.
Since April 2022, Shopify has been working to position itself 
as a go-to partner for influencers and celebrity brands. 
Drake Related, the brand of Canadian musician and five-time 
Grammy award winner, Drake, was one of the first brands 
to test Collective, Shopify’s native “shopdripping” tool. Fans 
were able to use the tool to buy Drake’s merchandise as they 
were leaving one of his concerts. Shopify’s collaboration with 
Drake represents a big shift from its traditional partnerships 
with brands and creators.24
45
%
of Gen Z consumers have bought products 
from influencer and celebrity brands in the 
past year
33
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


CONSUMERS ARE BECOMING 
MORE CONSCIOUS OF THEIR 
PURCHASING IMPACT 
04
34
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers across the world are becoming aware of the 
power of their purchasing and consumption decisions. This 
new class of conscious consumers, a group that wants to 
see change at global level through their public and private 
actions, demonstrates their consciousness regarding 
sustainability, price, food waste, and social justice, among 
other factors.
The majority of 
consumers still maintain 
a consistent demand for 
sustainable products 
especially Gen Z  
 
60% of consumers globally indicate that they have purchased 
products from organizations they consider to be sustainable. 
While this figure has fallen from 70% in 2020, Gen Z, at 
71%, has seen a rise across this period, showing a strong 
predilection for sustainable products (see Figure 18). 
PepsiCo has initiated a practical trial involving paper-based 
outer packaging as a sustainable alternative to traditional 
plastic wraps for its Walkers Baked snack multipacks. These 
modified multipacks are currently accessible in more than 
300,000 units at 800 Tesco stores in the UK. It is designed 
to encourage widespread recycling through conventional 
curbside recycling programs.25
Source: Capgemini Research Institute, Sustainability in Consumer Products and Retail survey, March 2020, N = 7,520 consumers: 
849 Gen Z consumers, 2,294 Millennial consumers, 2,182 Gen X consumers, 2,195 Boomer consumers; Capgemini Research 
Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers: 1,048 Gen Z consumers, 3,358 Millennial 
consumers, 3,586 Gen X consumers, 3,689 Boomer consumers.
FIGURE 18.
Gen Z consumers still want sustainable products
70%
60%
71% 71%
73%
65%
68%
68%
58%
54%
SHARE OF CONSUMERS ACROSS AGE GROUPS WHO BOUGHT PRODUCTS FROM ORGANIZATIONS THAT 
ARE PERCEIVED AS SUSTAINABLE
March 2020                         October–November 2023
Boomers (Age 57+)
Gen X (Age 41–56)
Millennials (Age 25–40)
Gen Z (Age 18–24)
Global
35
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 19.
Consumers are not comfortable purchasing products that are not sustainable 
51%
43%
38%
36%
36%
33%
33%
33%
32%
32%
32%
31%
30%
29%
28%
28%
27%
CONSUMERS DISLIKE FOR PRODUCTS THAT ARE NOT SUSTAINABLE, ACROSS CATEGORIES
Prescription 
medication
Household 
supplies
Groceries 
and food
 supplies
Over-the-
counter 
healthcare 
products
At-home 
entertainment
/Media
Personal 
care
 products
Apparel 
and
 accessories
Leisure 
travel
Consumer 
electronics
/white goods
Casual 
or fine 
dining in
 restaurants
Take-away 
food
from 
restaurants
Furniture
 and 
furnishings
Home 
improvement
 supplies
Alcoholic
 beverages
Work-relate
d travel
Luxury 
products
Tobacco
36
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


A further 61% of consumers felt brands, stores, and 
supermarkets should do more to reduce waste, and 57% felt 
disappointed in their efforts in 2022. More than half (58%) 
of these consumers increased spending with companies that 
focused on reducing waste in 2022. 
According to our current survey, brands that demonstrate 
transparent food-waste reduction practices receive support 
from 57% of consumers, and 71% of consumers consider 
retailer policies and initiatives as key drivers of the reduction 
of food waste. German discount supermarket chain Aldi has 
committed to achieving zero waste in operations by diverting 
90% of its waste from landfills through recycling, donation, 
and organic recycling programs by 2025, and to reduce food 
waste by 50% by 2030. To accomplish this, Aldi has rolled 
out non-food donation programs to nearly all its stores and 
distribution centers, expanded recycling and food-recovery 
initiatives, and has piloted and expanded composting 
initiatives.27
Sustainability is a more influential factor in purchase 
decisions for non-essential and luxury items
Around one-quarter (27%) of consumers are uncomfortable 
buying non-sustainable prescription medication, and 28% 
are uncomfortable purchasing non-sustainable household 
supplies and over-the-counter (OTC) health products, and 
non-sustainably produced grocery and food supplies. For 
luxury goods (43%) and non-staple items such as tobacco 
(51%), alcoholic beverages (36%), and work-related travel 
(38%), we observe an even higher percentage of consumers 
who are uncomfortable if their purchases are not sustainable 
(see Figure 19). The cost per product or service for the 
earlier mentioned categories are much higher than the 
remaining categories. German herbal liqueur manufacturer 
Jägermeister has announced a change in its outer packaging 
from solid board to recycled corrugated outers, which, it 
says, are particularly compatible with its highly efficient 
packing machines.26
Consumers are conscious of the impact of food waste
In 2022, 72% of consumers said they were conscious of their 
level of food wastage. This concern persists in 2023, with 69% 
voicing concern. As many as 71% recognize the contribution 
of food waste to environmental issues, and 73% believe that 
their behavior and choices on an individual level can help 
in addressing the issue. We found 67% of consumers want 
educational campaigns and awareness programs to address 
the issue of food waste. 
67
%
of consumers want educational campaigns and 
awareness programs to address the issue of 
food waste.
37
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Price remains the main 
purchasing factor for 
consumers, followed 
closely by trust
While consumers are changing their habits, price remains 
the primary motivator behind purchases. Forty-one% of 
consumers are increasing second-hand product consumption, 
and the same proportion are moving towards a freecycle 
model (donating products to friends/neighbors/community 
members or accepting products for free, thereby reducing 
waste and promoting reuse).28 However, 48% of consumers 
buy alternative, cheaper versions of name-branded 
products. Further, over half (51%) report that they are buying 
refurbished or imperfect products to get a better price.
Consumers across all age groups may be unwilling to meet high 
price points and expect to pay less for sustainable products. In 
2023, 40% of consumers have paid 5–10% more for sustainable 
products, down from 45% in 2020 (see Figure 20). 
The next two major concerns both relate to the validation and 
verification of sustainable goods, with 52% of respondents 
reporting insufficient information to verify sustainability 
claims, compared with 49% in 2020,29 and 50% reporting a 
lack of global standards for sustainability branding.
Another concern, reported by almost half the respondents, 
is that they are either unaware of how to differentiate 
sustainable products (43%), as compared with 38% in 2020, or 
they do not trust sustainability claims (46%, compared with 
44% in 2020).
38
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Sustainability in Consumer Products and Retail survey, March 2020, N = 4,779 consumers 
who have paid more for a sustainable product; Capgemini Research Institute, Consumer demand survey, October–November 2023, 
N = 4,307 consumers who have paid more for a sustainable product.
FIGURE 20.
Consumers are less willing to pay more for sustainable products than in 2020
20%
24%
20%
7%
7%
3%
3%
45%
40%
30%
SHARE OF ALL CONSUMERS WHO HAVE PAID MORE FOR A SUSTAINABLE PRODUCT   
October–November 2023
March 2020
≥20% more
15% to <20% more
10% to <15% more
5% to <10% more
1% to <5% more
Consumers need more information as awareness 
levels on sustainability remains low 
 
Nevertheless, in many respects, current levels of awareness 
of the sustainability impact of consumer purchases remain 
low:
•	 In 2020, 61% of consumers were unaware of the water 
footprint of the production of a pair of jeans (7,500 liters in 
2020); in 2023, 57% are unaware, confirming that the issue 
persists. 
•	 In 2020, 78% were unaware of the water footprint of a bar 
of chocolate (1,000 liters); currently, 70% are unaware.
•	 Only 42% of consumers were aware that annual milk 
consumption causes CO2 emissions equivalent to those 
produced by 1,140 km of driving a vehicle.
•	 56% of consumers state they will switch to a sustainable 
product if they receive comprehensive information about 
its environmental impact.
Ahold Delhaize USA is launching its HowGood label program 
to provide product-sustainability ratings and traceability. 
Other programs include Champions 12.3, an initiative with 
multiple global partners focused on reducing food waste. 
Another is the U.S. Food Loss and Waste 2030 Champions 
program, run in partnership with the United States 
Department of Agriculture (USDA) and the United States 
Environmental Protection agency (EPA).30
39
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


KEY INFORMATION THAT 
CONSUMERS REQUIRE IN ORDER 
TO ACT MORE SUSTAINABLY 
 
63% of consumers want brands to play an active role in their 
education around sustainable products and 55% believe that 
the greater a brand’s sustainability effort, the more positive 
the consumer perception of that brand.
In terms of obtaining this information, 46% support the 
inclusion of detailed labels and scannable QR codes on 
product packaging that provide carbon, water footprint, and 
product recyclability attributes (see Figure 21). 
50%
48%
46%
51%
47%
51%
47%
45%
41%
50%
46%
45%
39%
55%
KEY PRODUCT ATTRIBUTES, AS CITED BY CONSUMERS
Will you switch to a more sustainable
product based on this information?
Do you want to see this
information through a QR code?
Amount of waste generated during manufacturing 
Environmental impact of the packaging 
Social impact of the product
Impact on water resources
Impact on air
Carbon-neutral certified products
Impact on biodiversity
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 21.
Consumers want product information relating to deforestation, impact on water resources and air quality
63
%
of consumers want brands to play an active
role in their education around sustainable 
products
40
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 22.
Consumers consider multiple important attributes for grocery purchasing decisions
45%
46%
40%
40%
43%
38%
49%
52%
52%
57%
45%
45%
49%
49%
57%
69%
RELATIVE IMPORTANCE OF PRODUCT ATTRIBUTES WHEN SHOPPING FOR GROCERIES
I wish to see this data via a scannable QR code                 Important attribute
Price
Organic sourcing
Information on the environmental impact of the product
Locally produced products
Sustainable packaging
Lab-grown meat or plant-based meat substitutes
Company’s engagement with local communities
 or charitable activities
Certifications like Fair Trade, Organic, or B Corp influence
 my trust in a product and my willingness to buy it
Albert Heijn, the largest Dutch supermarket chain, is piloting 
a “true-pricing” initiative at three of its AH to-go convenience 
stores. When consumers buy a self-service cup of coffee in 
Groningen, Wageningen, or Zaandam, they’ll see two prices: 
the standard retail price and the true price. The latter factors 
in CO2 emissions, water use, resource consumption, and labor 
conditions related to the production of coffee, cow’s milk, 
and oat milk.31 Highlighting a few consumer preferences 
(see Figure 22), we found that despite the focus on buying 
responsibly price is still by far the most important influencing 
factor on purchasing decisions:
•	 57% of respondents value local production products as 
a product attribute, and 52% want to see this data via a 
scannable QR code.
•	 52% of respondents consider sustainability of packaging 
(e.g., eco-friendly, biodegradable) as an important product 
attribute, and 49% want to see this data via a scannable QR 
code.
41
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


IN 2023 BOTH IN-STORE 
AND ONLINE SHOPPING 
HAVE INCREASED
In November 2023, 66% of consumers said they had interacted 
significantly with physical stores, up from 61% in November 2022 as 
compared to 36% who shopped online in November 2023, up from 
33% in November 2022.
66
%
of consumers said they had interacted
significantly with physical stores, up from 61% 
in November 2022
42
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; 
Capgemini Research Institute, What matters to today’s consumer, January 2023; Capgemini Research Institute, What 
matters to today’s consumer, January 2022.
Note: The question asked was “Please indicate your frequency of using physical stores when shopping with retailers. 
Please rate on a scale of 1 to 7, where 1 = very low interaction and 7 = very high interaction.” 
FIGURE 23.
Consumers' interactions with physical stores and online is gradually increasing
41%
67%
61%
66%
38%
33%
36%
34%
% OF CONSUMERS SHOPPING AT PHYSICAL STORES AND ONLINE WITH RETAILERS
November 2023
November 2022
November 2021
November 2020
Physical stores
Online
As in 2022, preference for in-store shopping increases with age: 
•	 72% of Boomers (aged 57–75), up from 69% in November 
2022, say their level of in-store interactions is high today, 
compared with only 56% of Gen Z (aged 18–24), up from 45% in 
November 2022.
Our 2022 research revealed that consumers spread their 
purchases across physical and online channels, a trend that 
continues in 2023. In November 2022, 56% of grocery shoppers 
said they go to the store to purchase the bulk of their groceries, 
supplementing this with small online orders as required. In our 
November 2023 survey, a similar percentage of consumers (51%) 
say the same. 
43
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


DELIVERY AND FULFILLMENT 
CONTINUE TO TAKE PRECEDENCE 
OVER IN-STORE EXPERIENCES
05
44
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Grocery shoppers place greater importance on delivery and 
fulfillment in 2023 as they did last year:
•	 43% of consumers say that delivery and fulfillment are 
the most important factors when shopping for groceries, 
compared with 41% in November 2022.
•	 39% say the same for in-store experiences, up from 33% in 
November 2022.
Health and beauty shoppers:
•	 Similarly, 41% of consumers say that delivery and 
fulfillment are the most important aspects of shopping 
for health and beauty products, up from 39% in November 
2022. 
•	 40% say the same for in-store experiences, up from 34% in 
November 2022. 
Consumers’ willingness to pay for fast delivery has 
increased from last year  
In November 2022 and November 2023, consumers were 
asked what percentage of their order value they would 
be willing to pay for certain delivery speeds and services, 
assuming an average order bill of $30. Across all shoppers in 
November 2023, consumers said they would be willing to pay 
6% for two-hour delivery, up from an average of 4% among 
all consumers in November 2022. This trend is consistent 
across key demographic segments (see Figure 24). 
Amazon’s Prime Air will offer air delivery within 60 minutes to 
consumers in California.
Likewise, Walmart sees delivery growth outpacing pick-up 
growth with sub-3-hour and sub-1-hour delivery segments 
showing the fastest increases in uptake.32
45
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers: 1,048 Gen Z 
consumers, 3,358 Millennial consumers, 3,586 Gen X consumers, 3,689 Boomer consumers; 4,096 consumers with children in their 
household, 7,588 consumers without children in their household; 5,097 urban consumers, 4,936 suburban consumers, 1,648 rural 
consumers; Capgemini Research Institute, What matters to today’s consumer, January 2023.
FIGURE 24.
Shopper willingness to pay for two-hour delivery is up from 2022 
4%
6%
6%
9%
5%
8%
4%
6%
3%
5%
5%
8%
4%
6%
4%
7%
6%
4%
4%
6%
AVERAGE % OF ORDER VALUE SHOPPERS ARE WILLING TO PAY FOR TWO-HOUR DELIVERY, ACROSS 
CONSUMER SEGMENTS
Rural
Suburban
Urban
Without 
children in
 household
With 
children in
household
Boomers
Gen X
Millennials
Gen Z
Overall
November 2022                 November 2023
46
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


In our current research, across all consumers, 7% is the 
average they would be willing to pay for 10-minute delivery, 
compared with 4% in November 2022 (see Figure 25). The 
increase may reflect a desire to absorb inflation-driven 
prices for convenient service, even during an economically 
difficult period. 
The key trends by age, location, and delivery satisfaction 
largely remain the same as last year:
•	 On average, Gen Z consumers are willing to pay 10% of the 
order value for 10-minute delivery, compared to 7% overall 
•	 Willingness to pay for fast delivery decreases with age 
•	 Urban shoppers are more willing to pay than suburban and 
rural shoppers
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; 1,048 Gen Z 
consumers, 3,358 Millennial consumers, 3,586 Gen X consumers, 3,689 Boomer consumers; 4,096 consumers with children in their 
household, 7,588 consumers without children in their household; 5,097 urban consumers, 4,936 suburban consumers, 1,648 rural 
consumers; Capgemini Research Institute, What matters to today’s consumer, January 2023.
FIGURE 25.
Gen Z shoppers are willing to pay the most for 10-minute delivery
4%
7%
6%
10%
5%
9%
4%
7%
3%
5%
5%
9%
4%
7%
4%
8%
7%
4%
4%
6%
AVERAGE % OF ORDER VALUE SHOPPERS ARE WILLING TO PAY FOR 10-MINUTE DELIVERY, ACROSS 
CONSUMER SEGMENTS
Rural
Suburban
Urban
Without 
children in
 household
With 
children in 
household
Boomers
Gen X
Millennials
Gen Z
Overall
November 2022                 November 2023
47
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers’ in-store expectations 
 
Consumers expect a level of ease while shopping in-store, 
including the ability to try new products in-store, availability 
of in-store sustainability stations, and for technology in-store 
to offer the same level of interaction as an app (see Figure 
26). 
Stockouts are a concern 
for many consumers
47% of retail and 38% of consumer product organizations 
expect stockouts/product shortages in the 2023 holiday 
season, and nearly 40% of organizations expect late 
deliveries due to import delays.33 While organizations employ 
a number of demand forecasting and demand-planning 
tools, seasonal stockouts and product shortages could still 
occur. Stockouts or poor substitutions could lead to loss of 
consumer trust, particularly in industries such as groceries. 
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; Capgemini Research 
Institute, What matters to today’s consumer, January 2023.
FIGURE 26.
In-store curated recipes and other content is one of the most important attributes for consumers while shopping for groceries
30%
36%
30%
35%
28%
32%
IMPORTANT IN-STORE SERVICE ATTRIBUTES FOR CONSUMERS WHEN SHOPPING FOR GROCERIES
Ability to dine in at the 
grocery store
In-store culinary lessons 
In-store curated recipes 
and other content 
'November 2022                 'November 2023
48
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Consumers are concerned they will not be able to 
obtain the products they require or want
Given the ongoing unreliability of supply chains, many 
consumers are still concerned about the medium-term 
availability of essential products. In November 2023, 40% 
(41% in 2022) of consumers said that they were highly 
concerned regarding the potential unavailability of groceries 
and food supplies, and 39% (35% in 2022) voiced the same 
concerns in relation to prescription medication (see Figure 
27). 
Changes in consumer shopping behavior in response to 
stockouts:
•	 In the event of a preferred product becoming unavailable, 
most consumers (60%) prefer to buy a similar product from 
a competing brand.
•	 Additionally, 55% say that they have bought an item of 
the same weight/size made by a different brand, at a 
lower price.
Consumer goods companies are increasingly giving their 
retail partners more visibility of inventory levels, a powerful 
data insight that they can use across their own supply chains, 
as well as convenience features that expedite processes. 
Unilever, for example, offers the Shikhar app, which allows 
Unilever’s small-scale retail partners (or Kirana stores) the 
opportunity to connect directly with Unilever sellers and 
place orders 24/7.34
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers.
FIGURE 27.
Consumers are most concerned about the unavailability of essential products
% OF CONSUMERS CONCERNED ABOUT PRODUCT UNAVAILABLITY
Highly concerned                 Somewhat Concerned                 Slightly concerned                 Not at all concerned
Luxury products
Furniture and furnishings
Home improvement supplies
Consumer electronics/white goods
Apparel and accessories
Personal care products
Over-the-counter healthcare products
Household supplies
Prescription medication
Groceries and food supplies
15%
15%
15%
55%
17%
20%
22%
41%
18%
22%
23%
37%
19%
24%
24%
34%
19%
23%
22%
36%
29%
24%
20%
27%
29%
26%
21%
23%
32%
25%
20%
24%
39%
23%
19%
19%
40%
23%
19%
18%
49
Capgemini Research Institute 2024
What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


HOW BRANDS AND RETAILERS 
CAN MANAGE AND ADAPT TO 
SHIFTS IN CONSUMER BEHAVIOR
06
50
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Adapt to compete 
Brands and retailers use generative AI tools to 
become more consumer-centric  
There is no doubt that 2023 has been the breakthrough year 
for generative AI – and this was evident in its use for shopping 
across a range of categories.  Already 20% of consumers 
globally and 27% of US consumers have used generative AI as 
part of their shopping for products or services in 2023, and 
the evidence is this trend will accelerate in 2024. 
Indeed, we found 47% of Gen Z and Millennials would like a 
chatbot with features such as ChatGPT to facilitate asking 
questions and to receive responses quickly. In fact, 42% of 
Millennials would seek advice on future shopping experiences 
from generative AI tools based on their purchase history and 
loyalty to products. 
We also found evidence that brand-owners and retailers 
recognize that generative AI tools provide a seamless, 
customized shopping experience that will become the 
new floor of consumer expectations going forward. Of 
the surveyed retail organizations, 93% say generative AI 
is a topic for boardroom discussion for them, and 83% of 
retail organizations agree that generative AI can be used 
to improve customer service by providing automated  
and personalized support. We found that 62% of retail 
organizations have established a dedicated team and budget 
to integrate generative AI into future product/service 
development plans. For instance, 63% of organizations have 
started pilots for the use case “Efficient, self-optimizing 
real-time customer-service chatbots,” and 11% have already 
implemented the use case.35
A good example of this is Hopla, the AI chatbot that 
Carrefour.fr has integrated into its online platforms,  Hopla 
enhances the consumer shopping experience  by providing 
a range of consumer benefits from personalized product 
recommendations, budget-friendly shopping assistance, and 
menu ideas.36 
Generative AI can also help drive cost out for retailers who 
are increasingly operating on tight margins.  79% of retail 
organizations say the use of generative AI  can help improve 
internal operations and enhance facility maintenance. 62% 
of retail organizations expect benefits of more than 10%, 
within three years, in terms of an increase in operational 
efficiency and workflow automation. Retail organizations are 
prioritizing the use of Gen AI in their logistics function like 
route optimization (55%) and in operations management and 
supply chain optimization (45%).37
Wendy’s, an Americal fast food chain is developing FreshAI – a 
generative AI automated ordering system in drive-throughs, 
to im-prove operational efficiency and reduce errors in food 
ordering and delivery.38
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Unlock channel growth
Leverage social as both a feeder channel and a sales 
channel in its own right
The research shows social media plays an increasingly 
important role in discovery across all demographics and 
shopper journeys.  Almost 40% of young people go to 
TikTok or Instagram when looking for something like a 
place for lunch.41 Whereas 33% of consumers surveyed 
have discovered a new product or brand on social 
media in the last six months. This is already significant 
but becomes even more so among Gen Z(60%) and 
Millennials (45%).
Trust in the honesty of product reviews on social is also 
significantly high; 40% of Gen Z and 40% of Millennial 
consumers feel they get to know honest reviews in 
social media feeds. 
There is also strong evidence that brand presence on 
social media  is increasingly driving traffic to brand 
platforms and/or partner retailers. 42% of Gen Zs and 
37% of Millennials claim that they are influenced to 
purchase a product by social media advertisements.  
Sephora has recently launched gamified experience 
Leverage technology to reduce cost for consumers
In order to keep pace with consumer preferences and, more 
importantly, look to reduce overall in-store costs, brands and 
retailers are re-imagining physical stores. Identifying and 
adopting new and innovative technological solutions will be a 
critical enabler of this shift. 
Retailers can embed Internet of Things (IoT) sensors 
throughout a store’s tech and standard equipment (such as 
coolers and freezers) to remotely detect and even predict 
maintenance events before they disrupt store operations. 
These tech-enabled tools help to minimize the labor required 
for routine maintenance checks and also increase food safety.
Walmart uses sensors and IoT applications to monitor the 
temperature of individual refrigerators and the general 
status of equipment to take proactive measures and prevent 
breakdown. It also utilizes IoT sensors to control remotely its 
heating, ventilation, and air conditioning (HVAC) systems in 
stores, thereby reducing energy consumption and utility costs 
without negatively impacting the consumer experience.39 
US consumer goods multinational P&G boosted sales and 
revenue by improving product visibility and accessibility using 
artificial intelligence (AI). The AI tools analyze consumer 
behavior and store layout to determine the most effective 
product placement.40
52
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


through a feature called "Beauty Insider Challenge" 
in its Beauty insider program, members-only mobile 
and online social platform, appealing to the Gen Zs 
more. Customers are rewarded with bonus points for 
completing the challenges with tasks to drive instore 
traffic like buy-online, pick-up in-store, trying Sephora’s 
in-store shade-matching tool, Color iQ along with other 
tasks.42
Consider social commerce as a  sales channel in its 
own right, especially for reaching Gen Z audiences
Social platforms such as TikTok and Instagram are not just 
for product discovery but are also turning into preferred 
platforms for purchase. 46% of Gen Z consumers surveyed 
have already made a purchase on social media platforms in 
the past year across multiple categories (including groceries). 
Carrefour has partnered with Brut to form social commerce 
company Brutshop, an online platform through which 
users will be able to make purchases during events live-
streamed on social networks. In France, 60% of Carrefour 
consumers say they are interested in live-shopping services. 
Commenting on the partnership, Elodie Perthuisot, Carrefour 
Group's Executive Director of e-Commerce, Data, and Digital 
Transformation, said: “By pooling our retail and social 
media strengths, our aim is to create the most powerful 
social commerce platform on the French market. This new 
community shopping experience will generate growth and 
value for both our companies.” 43
People buy from people:  Brands and retailers  
increasingly tap into the power of influencers with 
specially designed programs for story-selling
2023 appears to be the year when brands have flipped from 
a reactive use of influencers to a proactive use of brand 
ambassadors. In the past few years, micro influencers44 
have been attracting consumer attention with high quality 
content and user interactions. Although macro influencers45 
have more reach, micro influencers are often better able to 
connect with a targeted audience. Finding authentic brand 
ambassadors from these communities and inviting them to 
share their real-life stories on brand platforms/promotions 
has been particularly salient in 2023. Of the surveyed 
consumers, 82% are highly likely to follow a recommendation 
made by a micro-influencer.46 Brands are creating specialized 
creator and influencer programs to bring influencers on 
board for their product promotions:
•	 Walmart has launched Walmart Creator platform, which 
aims to build features and experiences to support creation 
and publishing of content. “We know our consumers are 
inspired by the content and stories they see from their 
favorite influencers in their social feeds every day,” 
enthuses William White, CMO, Walmart US. “This next step 
in our strategy will help fuel inspiration for our consumers 
by connecting their favorite creators directly with our 
brand and the brands they love at Walmart.” 47 
•	 Yeti, who make quality coolers for a range of outdoor 
pursuits, dedicate a third of their website to Stories, in 
which brand ambassadors relate their real-life experiences 
across a range of use cases from angling, rodeo, barbecues, 
through to snowboarding.  Together with the community 
engagement tools, such as their award-winning 2023 Year-
in-Preview planner, these authentic stories create a strong 
basis for trust and loyalty and are credited with fueling 
much of Yeti’s double-digit growth through the past 5 years.
53
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Lead with purpose
Reduce food waste to help combat the cost-of-living 
crisis
Food waste is one of the biggest problems that we, as a 
global community, are facing. It is estimated that around one-
third of all food produced globally is wasted every year.48 This 
is not only a huge economic loss but also a major contributor 
to greenhouse gas (GHG) emissions. 
Advances in AI technology can help reduce food waste by 
identifying and resolving issues early. Retailers can scan and 
identify produce that would normally be disposed of, but 
which is still edible. AI also allows retailers and restaurants 
with limited resources to manage their stock levels 
effectively. Retailers can also nudge consumers to modify 
their shopping behaviors to reduce food wastage.
Brands and retailers have turned to technology to boost 
their food-waste initiatives. Supermarket Lunds & Byerlys 
offers employees the ability to scan and weigh food before 
it is added to the grocer’s deli food bars and again before the 
food is thrown away. Albertsons has deployed fresh-food 
optimization technology on an AI-driven platform across its 
entire store network, with the goal of achieving a significant 
reduction in the company’s food waste by 2030.49
Educate consumers on the sustainability impact of 
their shopping 
Society requires that consumers achieve greater awareness 
of the impact of their purchase behaviors; 52% of consumers 
say that they do not possess the necessary information 
to verify sustainability claims, and half report a lack of 
global standards of sustainability branding as an issue. In 
this context, retailers and consumer product firms can 
foster awareness of the sustainability, climate change, 
and nutrition impact of consumer purchase decisions. This 
can be facilitated by multiple mediums, such as in-store 
sustainability stations, which 38% of consumers rated as 
a desirable in-store attribute. Around 45% of consumers 
want an accurate idea of the environmental footprint of a 
prospective purchase made available to them via a QR code. 
In December 2022, L’Oréal launched its Product Impact 
Labeling system in the US (and in Canada in the following 
year). The initiative provides consumers with transparent 
scientific information about a product’s environmental and 
social impact, and compares this with other L’Oréal products 
in the same category. Products are ranked on a scale from A 
to E that considers 14 planetary-impact factors, such as GHG 
emissions, water scarcity, ocean acidification, and impact 
on biodiversity, measured at every stage of the product’s 
lifecycle, from ingredients to packaging, manufacturing 
process, transport, and ultimately use and disposal. 
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


This initiative was first launched in France in 2020. “L’Oréal’s 
Product Impact Labeling system is a core component of 
the L’Oréal for the Future program, which outlines our 
sustainability commitments for 2030. Its roll-out in the 
US will help change consumer behavior, accelerating the 
beauty industry's progress toward greater sustainability,” 
emphasizes Marissa Pagnani McGowan, CSO for North 
America. “This comes at a time when sustainability is 
increasingly a focus for US consumers. Using principles of 
environmental science, this tool will empower consumers, 
support more informed purchasing decisions, and foster a 
culture of greater brand transparency.” 50, 51
55
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


The cost-of-living crisis continues to dominate consumer sentiments in 2023 and 
looks set to remain high on their list of concerns for the foreseeable future. However, 
the impact in many geographies has eased from 2022 and consumers are interacting 
with stores and online channels more than they did last year, and are willing to pay 
more for faster delivery and fulfillment. Today, consumers are willing to explore new 
technological avenues in their shopping journey and want to use generative AI tools for 
search, recommendations, and support. Social commerce is a key channel, particularly 
in terms of its appeal to Gen Z consumers. With evolving technology preferences, 
consumers are becoming more conscious of their sustainability impact, demanding 
more sustainable options and information before making purchase decisions. 
Conclusion
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Research  
methodology
We surveyed 11,681 consumers over the age of 18 in 11 
countries across North America, Europe, and Asia–Pacific. 
The global survey took place in October and November 
2023. The demographic details of the consumers are below.
10%
9%
29%
30%
29%
28%
28%
31%
34%
33%
32%
9%
November 2021          November 2022          November 2023
Boomers,
age 57–75
Gen X, age
41–56
Millennials,
age 25–40
Gen Z, age
18–24
52%
52%
51%
47%
48%
47%
November 2021          November 2022          November 2023
Man
Woman
CONSUMERS BY AGE GROUP
CONSUMERS BY GENDER IDENTITY
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


43%
43%
41%
42%
42%
16%
15%
14%
44%
November 2021          November 2022          November 2023
Rural area
Town/suburban
 area
Large city/
urban area
23%
34%
17%
34%
20%
22%
21%
16%
18%
19%
5%
5%
6%
2%
2%
3%
36%
18%
November 2021          November 2022          November 2023
6+
5
4
3
2
1
3%
2%
43%
42%
30%
32%
15%
4%
3%
2%
5%
16%
45%
2%
November 2021          November 2022          November 2023
32%
15%
5%
2%
Other
Doctoral or professional degree
(e.g., PhD, EdD, MD, JD/LLD)
Postgraduate degree
(e.g., MA, M. Tech, MBA)
Undergraduate degree
(e.g., BSc, B. Tech)
High school/secondary school
Elementary school
CONSUMERS BY NUMBER OF 
PEOPLE IN HOUSEHOLD
CONSUMERS BY SELF-IDENTIFIED 
RESIDENTIAL AREA
CONSUMERS BY HIGHEST 
EDUCATIONAL LEVEL
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


November 2021          November 2022          November 2023
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
10%
9%
9%
United
States
United
Kingdom
Sweden
Spain
Netherlands
Japan
Italy
Germany
France
Canada
Australia
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
4%
3%
46%
45%
12%
14%
21%
14%
6%
7%
11%
19%
41%
3%
November 2021          November 2022          November 2023
13%
21%
11%
6%
Full-time student
Unemployed
Retired
Self-employed, consultant,
or freelancer
Part-time employed
Full-time employed
15%
14%
14%
November 2021          November 2022          November 2023
Prefer not
to say
$100,000–
$149,999+
$60,000–
$99,000
$20,000–
$59,999
Less than
$20,000
23%
22%
23%
16%
14%
12%
1%
6%
45%
51%
43%
CONSUMERS BY EMPLOYMENT
CONSUMERS BY COUNTRY OF 
RESIDENCE
CONSUMERS BY ANNUAL 
HOUSEHOLD INCOME
Source: Capgemini Research Institute, Consumer demand survey, October–November 2023, N = 11,681 consumers; Capgemini Research Institute, What matters to today’s 
consumer, January 2023, N = 11,300 consumers; Capgemini Research Institute, What matters to today’s consumer, January 2022, N = 10,179 consumers. 
*The study findings reflect the views of the respondents to our online questionnaire for this research and are intended to provide directional guidance. 
59
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Appendix
 
• Easy and clear return policies
• Ability to specify delivery time slot
• In-home delivery (e.g., front entryway, garage)
• Order online with same day home delivery
• Contactless checkout (i.e., self-checkout, no contact 
   with store employee required)
• In-store curated recipes and other content (e.g., meal
   planning tips, ingredient suggestions) 
• Ability to dine in at the grocery store
• In-store culinary lessons on how to cook healthy meals
  for less money
• Contactless checkout (i.e., self-checkout, no contact with store
   employee required)
• In-store makeup lessons/workshops
• Ability to personalize the product
• Technology to help with your decision (e.g., virtual try-on,
   skincare analysis)
Delivery and fulfillment-related services – Grocery and health and beauty
In-store experiences – Grocery 
In-store experiences – Health and beauty
• One-click addition to online shopping cart (based on past purchases)
• Order in store with same day home delivery
• Order online, pick up curbside/at store
• Order online as a subscription/on a recurring basis
SERVICE ATTRIBUTES TESTED AMONG GROCERY AND HEALTH AND BEAUTY SHOPPERS:
Source: Capgemini Research Institute analysis.
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


References
11.	 Capgemini Research Institute, AI in CX consumer survey, 
May 2018, N = 10,000 consumers.
12.	 Acumen Research and Consulting, “Social commerce 
market size – Global industry, share, analysis, trends and 
forecast 2022–2030,” December 2022.
13.	 WordsRated, “BookTok Statistics,” September 27, 2023.
14.	 e-Marketer, “Social Commerce 2023: Social media 
and ecommerce convergence trends bring growth 
opportunity for brands,” January 27, 2023. 
15.	 CNBC, “48% of Gen Zers will do their holiday shopping on 
TikTok, Instagram this year – they trust the ‘wisdom of 
their friends,’ expert says,” October 17, 2023.
16.	 CNBC, “Livestream shopping booms as small businesses 
strike gold on social media,” June 9,2023
17.	 CNBC, “Livestream shopping took China by storm. Now 
Amazon, TikTok and YouTube are betting the QVC-style 
pitches will take off in the U.S.” February 14, 2023.
18.	 The Harris Poll, “Estée Lauder makes a play for Gen Z,” 
March 16, 2023.
19.	   Axios, “Celebrity retail brands surging in popularity,” July 
21, 2023.
20.	 The Financial Times, “When it comes to celebrity beauty 
brands, ‘authenticity’ sells,” February 2023.
21.	 Nielson IQ, “Celebrity beauty brands: Key success drivers 
in 2023,” June 30, 2023.
22.	 Nielson IQ, “The ultimate guide to celebrity beauty 
brands,” June 22, 2023.
23.	 Hearst Bay Area, “From zero to hero: How these 
companies Mastered Social Commerce,” July 21, 2023, 
https://marketing.sfgate.com/blog/from-zero-to-hero-
how-these-companies-mastered-social-commerce.
24.	 Modern Retail, “How Shopify’s partnership with Drake 
lays the groundwork for future celebrity collaborations,” 
October 17, 2023.
25.	 Food Engineering, “PepsiCo trials paper-based packaging 
for Walkers Baked multipacks,” March 13, 2023.
26.	 Packaging World, “McDonald's tests strawless lids 
in U.S., Nestlé Brazil packs condensed milk in pouch, 
Jägermeister swaps secondary packaging to corrugated,” 
April 4, 2023.
27.	 Aldi Corporate Sustainability, “Waste and recovery,” 
accessed on Nov 10, 2023.
1.	 Bureau of Economic Analysis, Personal Income and 
Outlays, October 27, 2023.
2.	 The New York Times, “Why are food prices so high in 
Europe?” May 30, 2023
3.	 Reuters, “French consumers forced to cut back on 
essentials, Carrefour CEO warns,” August 29, 2023. 
4.	 CNBC, “Walmart and Target face similar problems – but 
only one is thriving,” August 17, 2023.
5.	 AP News, “Macy’s had to discount spring goods to entice 
cautious consumers and sees more warning signs ahead,” 
August 22, 2023.
6.	 FT, “Tesco chief sees ‘encouraging’ signs that inflationary 
pressures are easing,” June 2023. 
7.	
 The Guardian, “Carrefour puts ‘shrinkflation’ price 
warnings on food to shame brands,” September 14, 2023.
8.	 Ecommerce News Europe, “Generative AI in ecommerce: 
A look beyond texts,” July 3, 2023. 
9.	 ESM, “Carrefour France introduces AI-powered online 
shopping chatbot," June 15, 2023.
10.	 FoxNews, “How Walmart is using AI to change how you 
shop forever," October 16, 2023.
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


28.	 FREESTUFF4U, “The Freecycle Network: A remarkable 
movement transforming the UK’s waste and consumption 
landscape,” April 15, 2023.
29.	 Capgemini Research Institute, How sustainability is 
fundamentally changing consumer preferences, 2020.
30.	 Supermarket News, “Ahold Delhaize USA is winning at 
food waste,” June 30, 2023.
31.	 Trend Watching, “For coffee to go, Dutch supermarket 
Albert Heijn pilots voluntary higher prices that cover 
hidden costs,” April 20, 2023.
32.	 Guggenheim Securities Analyst Report, “WMT: 
Decent appetite for saving money and living better,” 
October 2023.
33.	 Capgemini Research Institute, Navigating the future: 
Building resilient and efficient supply chains in the 
consumer products and retail industry, November 2023.
34.	 Unilever “Navigating the future: The in-house developed 
app that’s transforming a traditional sales model,” April 
11, 2023.
35.	 Capgemini Research Institute, “Harnessing the value of 
generative AI: Top use cases across industries,” July 2023.
36.	 Carrefour, “Carrefour integrates open AI technologies 
and launches a generative AI-powered shopping 
experience,” June 8, 2023.
37.	 Capgemini Research Institute, “Harnessing the value of 
generative AI: Top use cases across industries,” July 2023. 
N = 1,000 organizations
38.	 Wendys,” Leading Drive-Thru Innovation with Wendy’s 
FreshAI”, December 11, 2023
39.	 Retail TouchPoints, “IoT in retail: Top 5 use cases and real-
life examples,” July 17, 2023
40.	 InData Labs, “AI in FMCG: Top use cases,” June 29, 2023.
41.	 The Bottom Line, “Social Media as Search Engines: What 
Does It Mean for Your Business?” April 2023
42.	 Sephora adds gamified experience to Beauty Insider 
loyalty program in appeal to Gen Z", Sep 27, 2023
43.	 European Supermarket, “Carrefour teams up with Brut to 
form social commerce company,” February 2, 2022.
44.	 Anyone with between 10K and 100K followers on social 
media that has a more curated, cohesive community 
of followers
45.	 Anyone with between 100K and a million followers on 
social media
46.	 Forbes, “Micro-Influencer Power: Building Brand Trust 
And Driving Conversions,” August 2023
47.	 Walmart, “Walmart launches new content creator 
platform,” October 18, 2022.
48.	 Greenly, “Global Food Waste in 2023,” August 22, 2023.
49.	 Grocery Dive, “How AI, digital innovation can help grocers 
reduce food waste,” August 28, 2023.
50.	 L’Oréal Groupe, “L’Oréal USA rolls out product labeling 
system to educate consumers about the environmental 
impact of its products,”.
51.	 L’Oréal Groupe, “To empower consumers in their 
purchasing decisions, L’Oréal Canada launches product 
impact labeling system,” March 2023.
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries


Key contributors
Tim Bridges
Global Sector Lead, Consumer Products, 
Retail Distribution, Capgemini 
timothy.bridges@capgemini.com
Marisa Slatter 
Director, Capgemini Research Institute 
marisa.slatter@capgemini.com
Jerome Buvat
Head of Capgemini Research Institute
jerome.buvat@capgemini.com
Sumit Cherian 
Program Manager, Capgemini Research 
sumit.cherian@capgemini.com
Lindsey Mazza
Global Retail Lead, Capgemini 
lindsey.mazza@capgemini.com
Bhavesh Unadkat
Vice President, Head of Marketing 
Services, frog
bhavesh.unadkat@frog.co 
Owen McCabe
Vice President, eCommerce, Capgemini
owen.mccabe@capgemini.com
Kees Jacobs  
Vice President, Global Lead for Insights and 
Data, Capgemini Consumer Products and Retail 
kees.jacobs@capgemini.com
Subrahmanyam KVJ
Senior Director, 
Capgemini Research Institute
subrahmanyam.kvj@capgemini.com
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The authors would like to especially thank Kunal 
Karamchandani and Sakthivel S from the Capgemini 
Research Institute for their contributions to this research.
The authors would also like to thank Emmanuel 
Fonteneau, Bas Morselt, Maaike Slagter, Michelle 
Grujin, Achim Himmelreich, Vito Labate, Bridget Blaize, 
Pallav Srivastava, Kristin E Morris, Rupali Chakraborty, 
Ashwani Kumar, Jaydeep Neogi and Manish Saha for their 
contributions to this research.
About the 
Capgemini Research Institute 
The Capgemini Research Institute is Capgemini’s in-house 
think tank on all things digital. The Institute publishes 
research on the impact of digital technologies on large 
traditional businesses. The team draws on the worldwide 
network of Capgemini experts and works closely with 
academic and technology partners. The Institute has 
dedicated research centers in India, Singapore, the UK, and 
the US. It was recently ranked number one in the world by 
independent analysts for the quality of its research. 
 
Visit us at www.capgemini.com/researchinstitute/
Global contact
TIM BRIDGES
timothy.bridges@capgemini.com
Australia
AMIT SINGHANIA 
amit.singhania@capgemini.com
Spain  
DAVID LUENGO RUIZ
david.luengo-ruiz@capgemini.com
Germany 
ANDREAS UNRUHE
andreas.unruhe@capgemini.com
India
VIDHYA KRISHNASWAMY
vidhya.krishnaswamy@ 
capgemini.com
United States
TED LEVINE
theodore.levine@capgemini.com
France
ANNE-SOPHIE THAUMIAUX
anne-sophie.thaumiaux@
capgemini.com 
EMMANUEL FONTENEAU
emmanuel.fonteneau@ 
capgemini.com
Netherlands 
THEO VAN ROEKEL
theo.van.roekel@capgemini.com
Sweden
CAROLINE SEGERSTÉEN RUNERVIK
caroline.segersteen-runervik@
capgemini.com
United Kingdom
MICHAEL PETEVINOS
michael.petevinos@capgemini.com 
LINDSEY MAZZA 
lindsey.mazza@capgemini.com
For more information, 
please contact:
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Reflect. Rethink. Reconsider: 
Why food waste is everybody’s 
problem 
Why consumer love 
Generative AI
More Capgemini Research Institute publications
Illuminating the path: Building 
resilient and efficient supply 
chains in the consumer products 
and retail industry
Generative AI and the evolving 
role of marketing: A CMO’S 
Playbook
A new playbook for 
Chief Marketing 
Officers
Conversations for 
Tomorrow, 4th edition: 
The new face of 
marketing
The wake-up call: 
Building supply chain 
resilience in CPR
The age of insight: How CPR 
organizations can accelerate 
value capture from data
What matters to today’s 
consumers: 2023 consumer 
behavior tracker 
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What matters to today's consumers 2024: consumer behavior tracker for the consumer products and retail industries
Copyright © 2024 Capgemini. All rights reserved.
About Capgemini
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Get the Future You Want | www.capgemini.com




CONTENTS
Introduction	
3
Demand	
Inflation Triggers Shift in Global Consumer Spending	
4
Gen Z — The Generation Changing Everything	
9
The Return of Chinese Consumers Abroad	
16
Ecosystem	
The Surge of Social Commerce in China — From Big 2 to Big 5	
22
8 Lessons to Master Personalization in the Retail Industry	
27
Innovation	
Tech Solutions for Retail Merchandising Success 	
31
Strategies to Help Solve the Private Label Dilemma in Retail 	
35
Solutions for Dealing with Inventory Turnover Challenges 	
38
Streamlining your Supply Chain with Warehouse Automation 	
45
Sustainability	
Food Retailers Need to Act Now for a Net-Zero Future 	
51
Delivery Decarbonization Pathway 	
55
Consumer and Home Electronics — Going Full Circle 	
61
4 Ways to Align Corporate Interests to Scale Climate Action 	
65
Leadership	
Secrets of Effective Leadership in Times of Crisis 	
68
Understanding AI's Impact on Job and Industry Transformation	
71
Transform Retail Employees into Powerful Community Builders 	
76


WELCOME
To the 10th edition of the Oliver Wyman 
Retail And Consumer Journal.
After emerging from the COVID-19 pandemic, the retail and consumer sector was confronted 
with a new set of major challenges in 2022 and 2023. These challenges include the fallout from 
inflation and cost-of-living crises in the West, as well as the demand stagnation in many 
parts of Asia. These factors put pressure on volumes, margins, inventory levels, and costs.
Despite these current challenges, the sector continues to face major long-term shifts. 
Technological advancements, particularly the rapid rise of generative artificial intelligence 
are reshaping consumer demand and how companies operate. The emergence of Gen Z 
and Gen Alpha is introducing a new dynamic to consumerism and talent management. 
Environmental concerns are also intensifying, leading to the emergence of coalition 
initiatives and new regulations in the retail and consumer sector. Additionally, recent 
geopolitical developments have further exposed the vulnerabilities of global supply chains.
While these themes can appear daunting, we remain convinced that there are ample 
opportunities within every challenge. Those who continue to anticipate, innovate, and 
transform will thrive more than ever.
This tsunami of change, and how to size the opportunity that comes with it, is the theme 
of this edition of the Retail And Consumer Journal. We explore the various developments, 
examine how companies are responding to them, and provide our insights on how to 
approach these challenges both now and in the future. We hope the shared perspectives 
will help you stay ahead of the curve and make the most of new opportunities that arise.
We hope you enjoy the reading this edition of the journal.
Sirko Siemssen
Partner and Global Head of Retail 
and Consumer Goods
Rainer Münch
Partner and Head of Retail and
Consumer Goods, Europe
Frédéric Thomas-Dupuis
Partner and Head of Retail and
Consumer Goods, Americas
Pedro Yip
Partner and Head of Retail and 
Consumer Goods, Asia Pacific


INFLATION TRIGGERS 
SHIFT IN GLOBAL 
CONSUMER SPENDING
How consumers are adjusting their spending behavior
DEMAND
Jens von Wedel
Sarah Beul
Sarah Adelfang


Contents
Inflation Triggers Shift in Global Consumer Spending
© Oliver Wyman
5
Inflation has shown signs of easing in recent months, yet consumers worldwide remain 
apprehensive about their spending power. A June 2023 Oliver Wyman survey of 10,000 
consumers in nine countries illustrates that people across the globe still have significant 
concerns about their ability to pay for essential goods and services, despite a slight 
improvement in sentiment compared with February this year. 
These concerns are widespread in Germany, the UK, France, and the US, with around 
three–quarters of consumers expressing them. The situation is even more severe in Brazil, 
Mexico, and the United Arab Emirates (UAE), where that figure is over 90%. As we detail 
below, consumers adjust their purchasing behavior accordingly. 
SHOPPING BEHAVIOR IS CHANGING WORLDWIDE
The fear of inflation is evident in consumers' spending behavior on groceries and essential 
goods. Across all countries, more than 80% of survey respondents stated that they have 
adjusted their buying behavior, including over 40% who have reduced how much they buy. 
In addition, consumers are particularly on the lookout for cheaper alternatives — more than 
half of those surveyed reported opting for lower–priced groceries, such as private label 
goods. The UK stands out in this regard, with two–thirds of consumers indicating they are 
substituting their regular purchases with cheaper alternatives. Increased price sensitivity 
has also driven consumers globally to seek cheaper options online (44% of respondents) 
and actively use coupons (41%) to save money on purchases. 
In the Middle East, consumers have adopted an approach to saving money that is not yet 
as widely common in Europe: 43% of respondents in the UAE reported utilizing bulk orders 
to reduce prices. This reflects a shopping behavior that we mainly associate with North 
America, where consumers have long been accustomed to purchasing in larger quantities, 
benefiting from ample space for storage and significant cost savings from wholesale club 
retailers. 
The bulk ordering continues to show strong momentum in Asia as well, though with a 
different approach. The model of Pinduoduo is based on a group–buying approach, where 
consumers can team up with others to purchase products in bulk. As this trend continues to 
gain traction, it highlights how different regions are embracing innovative ways to leverage 
bulk purchasing for substantial savings. For Europe, the Asian group purchase model seems 
a more viable option than the American bulk sizes due to typical limitations on storage 
room. At this point it is not yet an apparent trend.


Contents
Inflation Triggers Shift in Global Consumer Spending
© Oliver Wyman
6
Exhibit 1: Changing purchasing behaviors
Delay a major purchase
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Buy cheaper brands
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
0%
80%
60%
40%
20%
Search online for
cheapest option
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Buy less
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Use more coupons
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
0%
80%
60%
40%
20%
Buy things on sale
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Order in bulk
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
0%
80%
60%
40%
20%
Use “buy now, pay later” plans
All
US
CA
MX
BR
DE
FR
IT
UK
UAE
Source: Oliver Wyman Forum Consumer Survey 2023
REGIONAL DIFFERENCES IN CONSUMER SPENDING PRIORITIES 
Consumers are also adapting their purchases of discretionary goods. While shoppers 
are willing to accept stronger cutbacks for some product categories due to inflationary 
concerns, there are exceptions. Interestingly, apparel remains relatively resilient, with nearly 
half of respondents stating they will continue to spend as before. 
Leisure travel is also valued highly. After the prolonged period of restrictions, lockdowns, 
and uncertainties during the pandemic, many people seem unwilling to accept inflation–
driven cuts to their spend on traveling. 


Contents
Inflation Triggers Shift in Global Consumer Spending
© Oliver Wyman
7
Looking at some regional differences: Consumers in North America are less likely to 
adjust their spending on holiday gifts, while European consumers say they will continue 
to purchase white goods. Overall, customers are now thinking much more carefully about 
whether and how much they are willing to spend on furniture, cars, and home renovations 
and, if necessary, may postpone their purchase to a later point in time.  
Exhibit 2: Ranking of non–essential goods during recession
United States
40%
40%
36%
36%
32%
32%
17%
17%
17%
17%
Canada
38%
38%
31%
31%
32%
32%
17%
17%
18%
18%
Mexico
55%
55%
26%
26%
22%
22%
22%
22%
22%
22%
Brazil
55%
55%
35%
35%
35%
35%
32%
32%
35%
35%
Germany
60%
60%
41%
41%
36%
36%
43%
43%
32%
32%
France
44%
44%
37%
37%
18%
18%
19%
19%
23%
23%
Italy
46%
46%
36%
36%
23%
23%
23%
23%
22%
22%
United Kingdom
37%
37%
38%
38%
18%
18%
23%
23%
23%
23%
United Arab Emirates
39%
39%
27%
27%
25%
25%
28%
28%
30%
30%
Apparel
Leisure travel
Holiday gifts
Consumer electronics
Small domestic appliances
Elective healthcare procedures
White goods (refrigerator, etc.)
Source: Oliver Wyman Forum Consumer Survey 2023 


Contents
Inflation Triggers Shift in Global Consumer Spending
© Oliver Wyman
8
NEED FOR ACTION FOR RETAIL AND CONSUMER 
GOODS COMPANIES
Inflation effects on spending will remain severe in the short term, particularly in those 
categories where consumers are more price–sensitive and willing to adapt their spending 
patterns, such as furniture, cars, home renovations, and white goods (see Exhibit 2). 
This challenging economic landscape presents a unique opportunity for retailers and 
manufacturers that possess superior value–for–money offerings and a commitment to 
leading cost efficiency. To capitalize on this dynamic, these businesses should proactively 
undertake a strategic review of their product range and pricing strategies. For instance, 
they could consider implementing targeted price reductions for a limited period. Retailers 
could optimize their private label product selection to attract customers who are looking 
for cheaper options. By embracing such approaches, businesses can position themselves 
not only for short–term market share growth but also for lasting customer loyalty and 
competitive advantage.


GEN Z — THE GENERATION 
CHANGING EVERYTHING
DEMAND
Oliver Wyman Forum


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
10
Older people sometimes caricature Generation Z as a temperamental collection of 
“snowflakes” and “strawberries” who personify the excesses of the social media era. 
But these digital natives are so much more than that. They are emerging from the global 
pandemic resilient and pragmatic, self–reliant and collaborative. Businesses that dismiss 
them do so at their peril.
Exhibit 1: Global population of Gen Z
25% 
Gen Z
23%
Millenials
19%
Gen X
14%
Boomers
Note: Age group data adjusted to align with Pew Research Center definitions of each generation.
Source: Fitch Solutions
Born between 1997 and 2012, Gen Zers are still coming of age — but they already display 
fierce independence, passionate activism, and unwavering acceptance of others. They 
possess a moral compass and a willingness to chart their own paths rather than conform 
to previous norms. These traits will serve them well as they reshape society, the economy, 
the workplace, and much more in the years to come.
We spent two years studying this generation. Our research included focus groups and a 
recent poll of 10,000 adults in the United States and the United Kingdom. While Gen Z is not 
a monolithic group — far from it — our exhaustive research enables us to connect the dots 
in new ways on many of the commonly shared views and traits that define this cohort.
While many generations “become their parents” as they pass through life’s many stages, 
the evidence suggests Gen Z will be different. Given the economic, social, and political 
trauma they have faced in their short lives, many of their values, behaviors, and lifestyle 
choices are now etched into their DNA. Brands and employers expecting Gen Z to revert to 
the mean will be surprised when they don’t.
Our report dives deeply into what makes Gen Z tick and examines in detail the changes they 
are bringing. Here is a summary of our most important findings — and how businesses 
should prepare.
Maybe the older generations sucked it up and [got] on with it. 
Because it was quite a nice thought, being able to retire and do 
what you want. But now we’re looking at it and our retiring age 
is moving further and further and further, and we’re like, how long 
is this gonna keep going on for?
­
Midlands, UK
userid:414195,docid:149420,date:2023-12-24,sgpjbg.com


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
11
WHO THEY ARE
When it comes to identity, Gen Z defies all labels. Its members are spiritual, but not 
religious. They’re realists, and are also optimistic. They embrace gender fluidity and view 
“situationships” as a practical alternative to defined relationships.
Gen Zers want bosses who understand them — and brands that celebrate their differences 
and support them in their fight against gender norms, beauty standards, and outright 
discrimination. To stay relevant, many companies must learn to shapeshift, too, by amending 
their policies, procedures, and benefits to fit Gen Z’s needs.
Exhibit 2: Gen Z is diverse, smart, connected, and struggling with mental health
Racial and ethnic diversity
Percent of each generation that does not 
identify as non-Hispanic white¹ (US Only)
College education
Percent of each generation enrolled in 
college at ages 18-21² (US Only)
Self–reported mental health issues
Percent of each generation that self-report 
struggling with at least one mental health 
issue in the last two years⁴ (US/UK only)
TikTok usage
Percent of each generation that 
follow and buy from TikTok accounts³
Gen Z
Millenials
Gen X
Boomers
48%
46%
41%
29%
57%
52%
43%
42%
28%
16%
6%
65%
51%
29%
14%
1. Source: US Census Bureau, Insider Intelligence.
2. 
Note: Measured in 2018 for Gen Z, 2003 for Millennials, and 1987 for Gen X. Source: Pew Research Center Analysis of 
US Census Bureau, Insider Intelligence.
3. Source: Klarna, Insider Intelligence.
4. Source: Oliver Wyman Forum Global Consumer Sentiment Survey, September 2020 – present.


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
12
WHERE THEY ARE 
Gen Zers are the first true digital natives, and it shows in how they choose to stay informed. 
They may trust print and broadcast news, but 60% get their news from social media and its 
many influencers and creators, in part because they appreciate multiple viewpoints. They 
are skeptical and aware of the need to doublecheck what they hear. But they often struggle 
to distinguish fact from the conspiracy theories, half–truths, and outright lies that pervade 
social media.
To remain relevant and combat disinformation, media organizations must compete with 
social platforms through content that is not only informative and entertaining but also 
relatable. That means partnering with influencers and building up their presence on social 
media. The same is true for companies that want their story to be heard — and to stick. They 
should listen first, then understand and meet Gen Zers where they are.
HOW THEY FEEL 
Coming out of the pandemic with twice the reported mental health issues as before, Gen 
Zers have become obsessive about their well–being. And they’re managing it on their own 
terms. Increasingly distrustful of mainstream medicine, Gen Zers are embracing a more 
holistic approach that gives greater weight to their mental well–being. They track their 
health with wearables, are trying alt–treatments like CBD, and follow TikTok influencers for 
medical advice.
Their embrace of alternative medicine reflects a concern that many aspects of mainstream 
healthcare don’t address their needs. Gen Zers are demanding greater attention is paid to 
the mental health crisis, women’s health issues, and the inequalities in access to healthcare. 
And even those with access to care want better communication with their providers and 
options that fit their perceptions of self–care.
Over time, Gen Zers’ proactive approach is likely to reshape the healthcare industry with 
their expectations for what care should look like and how it should be delivered. That has 
implications for the healthcare establishment — and will compel employers to greatly 
expand the health benefits they provide.
WHAT THEY CARE ABOUT  
Gen Zers are throwing their idealism and ingenuity into fights against climate change, 
income inequality, and other issues. While they disproportionately engage in public protests, 
Gen Zers also see value in posting on social media or talking with their friends due to the 
collective impact of these small actions. Yet, they are aware they can’t create change alone. 
Their trust in government and media might be fading, but they believe big institutions have 
the responsibility to act. They think businesses need to raise their game — and any business 
that does will have a distinct advantage.


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
13
Yes, some corporate leaders are facing a backlash from investors who want them only 
to focus on the bottom line rather than taking a stand. But if companies don’t speak out 
about issues that matter to Gen Z, they risk losing the next generation of consumers and 
employees. Gen Zers have a keen eye for performative activism, and issuing a statement 
that is blatant “greenwashing” won’t suffice. Instead, this generation pays attention to 
substantive commitments of time and money. Giving Gen Zers the volunteer time and 
financial backing to support their passions are good first moves.
WHAT THEY ARE DOING FINANCIALLY 
Watching their parents and older siblings struggle financially has made Gen Zers debt–
averse, stressed about money, and determined to manage their finances differently. Gen Z 
investors are starting younger and, as a group, have a higher percentage of women and 
people of color. And true to their digital upbringing, they seek community by crowdsourcing 
investment ideas from subreddits and the flashy influencers on TikTok and Discord.
And yet, they’re not sure if they’re making the right moves: Gen Zers are 1.4 times more 
likely to report that “money stresses me out” than older generations — and five times less 
likely to be disciplined with their spending. While many Gen Zers may not have money today, 
wealth managers, asset managers, and other types of financial institutions need to play 
the long game and grab the hearts, minds, and wallets of this next generation of investors. 
Retooling their products and marketing to reflect Gen Z’s diversity is a good start, as is 
providing more educational and investing content.
HOW TO WIN THEM AS CUSTOMERS 
Gen Z has always had a world of online information at its fingertips. As comparison–shoppers, 
they are frugal, cynical, and can sniff out marketing gimmicks and false claims in a heartbeat. 
They expect more from companies than millennials do, and won’t hesitate to bury companies 
on social media for their missteps.
Yes, they are a tough sell. But as they fully reach adulthood over the coming decade, Gen Z 
will become the largest consumer demographic in history. That means brands have no choice 
other than to learn what Gen Z wants and find ways to be relatable, inclusive, trustworthy, and 
transparent. Brands need to show authenticity, get “phygital” with the right mix of physical 
and digital engagement options, and understand that dialogues are the path to transactions.


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
14
HOW TO WIN THEM AS EMPLOYEES 
While previous generations did whatever it took to climb the corporate ladder, Gen Z isn’t 
about it. The pandemic turned their first jobs into a two–year video call and raised the bar 
for what they want from their working lives. What many want is to work for globally aware 
companies that provide the flexibility, autonomy, and work–life balance they seek. And they 
will #quietquit or #jobhop from employers that don’t. A large portion of Gen Zers already are 
fashioning work for themselves that fits what they want, on their own terms: Today, 45% of 
them have side hustles.
Exhibit 3: Gen Z is on a path to becoming a leading force in the workplace
2031
2022
Share 
of workforce
forecast
(US only) 
Boomers
Gen X
Millenials
Gen Z
Note: Age group data adjusted to align with Pew Research Center definitions of each generation.
Source: US Bureau of Labor statistics
With Gen Z expected to account for nearly a third of the workforce by 2030, employers 
must raise their game to recruit and retain the best and brightest. Covering the basics — 
pay, growth opportunities, better worklife balance, transparency — is a start. So, too, 
is prioritizing their health, offering career optionality and initiatives that help them find 
personal fulfillment at work, and nurturing their entrepreneurial spirit.
As this report shows, Gen Z is different from even the young millennials who are only a 
few years older. Timeworn strategies won’t work on this cohort — and waiting for them to 
conform to the old rules is risky for businesses and employers alike. Gen Zers want more — 
more transparency, personalized attention, democratized information, equitable treatment, 
and options in the jobs they work and products they buy.


Gen Z — The Generation Changing Everything
Contents
© Oliver Wyman
15
Businesses that became nimbler and more agile during the pandemic should use those 
same skills to adapt to Gen Z’s unique needs. Companies need to be creative and approach 
decisions more like experiments they can learn from. Given Gen Z’s size and clout, employers 
and brands have no choice but to adapt. The question is whether they will forge ahead to 
leapfrog the competition — or be leapfrogged. Seizing the moment will help them win over 
the most consequential generation in modern history.
Read more
WHAT BUSINESS NEEDS TO KNOW ABOUT THE GENERATION 
CHANGING EVERYTHING 


Imke Wouters
Jacques Penhirin
Kenneth Chow
THE RETURN OF CHINESE 
CONSUMERS ABROAD 
What to expect as Chinese tourists return
DEMAND


Contents
The Return of Chinese Consumers Abroad
© Oliver Wyman
17
In 2019, Chinese travelers made 155 million outbound trips, and spent a cumulative 
$245 billion on outbound tourism, an amount greater than the size of New Zealand’s total 
economy. After almost three years of border closure, Chinese travelers are finally coming 
back. Our survey of 3,495 affluent Chinese consumers, defined as those with a minimum 
monthly household income of ¥30,000, representing about 5% of China’s total population 
in 2022, sought to understand when and where we would see them again. Additionally, 
we aimed to determine whether their abundant international shopping habits, particularly 
for luxury products, would continue.
NO FULL RECOVERY YET AS DOMESTIC TRAVEL REMAINS 
A POPULAR ALTERNATIVE
Although approximately 60% of experienced international travelers — those who traveled 
internationally before COVID–19 — have already traveled or are planning to travel in 
2023, about 30% plan to wait more than two years before traveling internationally again. 
While we thought that after three years of border closure, everyone would be wishing 
to travel internationally again soon, for some the opposite has happened. In fact, 73% 
ofthe experienced travelers who have decided not to travel internationally in 2023 have 
made this choice because they prefer to travel domestically, having discovered the 
attractiveness of traveling at home during the last few years. Taking new international 
travelers into account, we expect a full recovery of Chinese outbound tourism in the second 
half of 2024 the earliest.
Exhibit 1: Expected international travel timeline
% of respondents
Pre-COVID international travelers
New international travelers
2023
2024
2025-2026
2027+
62%
9%
23%
6%
10%
4% 29%
57%
Source: Oliver Wyman’s Chinese traveler survey (June 2023)


© Oliver Wyman
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The Return of Chinese Consumers Abroad
Exhibit 2: Reasons for deferred traveling plan
% of respondents
73
47
32
53
22
28
8
35
3
8
Domestic travel is
International
travel is too costly
Health risks
No valid
passport/visa
schedule
Pre-COVID international travelers
New international travelers
24% of pre-COVID travelers 
are wary of flight cost, 
while 48% of non–international 
travelers are concerned about 
the general affordability 
of an international trip
Source: Oliver Wyman’s Chinese traveler survey (June 2023)
CHINESE TRAVELERS RETURN TO FAMILIAR DESTINATIONS
In 2023, the top destinations for Chinese travelers are expected to be familiar places, 
such as Hong Kong SAR, Western Europe, and Japan. These destinations are top of the list 
for experienced travelers, with almost 40% of those who have visited Western Europe 
planning to return this year. We expect an increase in the number of Chinese travelers 
visiting Europe later this year and expect Japan and South Korea will pick up in tourism 
significantly during the October holiday now that group tours are allowed.
Chinese travelers are also showing renewed interest in group tours. Contrary to the pre–
pandemic sentiment where only 40% traveled in group tours, 52% of surveyed travelers plan 
to join these tours for their next trip in 2023. This upward trend is observed across all age 
groups and travel experience.


Contents
The Return of Chinese Consumers Abroad
© Oliver Wyman
19
SHOPPING TOPS REASONS FOR INTERNATIONAL TRAVEL, 
BUT LUXURY SPENDING STAYS DOMESTIC
Before COVID–19, our surveys revealed the importance of shopping as a reason for 
international travel declining year–on–year, with exploring scenery becoming the primary 
motivation. However, shopping has regained its position as the top reason for international 
travel (Exhibit 3), followed by enjoying nice food. This trend is particularly popular among 
Gen Z travelers, with 62% of them inciting indulging in gastronomic experiences as their top 
reason for international travel.
Exhibit 3: Top purposes of post–pandemic international leisure travel by age group
% of respondents, Top 3 choices
Baby boomers
Participating in events or sports
Gen X
Millennials
Gen Z
Trying out new experiences
Visiting unique places
Enjoying nice food
Exploring the scenery
Exploring the local culture
Shopping
32%
33%
45%
50%
55%
41%
44%
22%
33%
55%
59%
60%
35%
35%
14%
32%
56%
62%
66%
34%
38%
20%
33%
50%
52%
62%
39%
44%
Source: Oliver Wyman’s Chinese traveler survey (June 2023)
While shopping is the main reason for international travel, the majority of luxury shopping 
is expected to remain domestic. Chinese luxury shoppers who travel internationally this year 
anticipate spending 20% of their luxury budget abroad and 80% domestically.
While the Chinese travelers are returning, it takes longer than we 
expected when the border reopened. Economic uncertainty has 
also impacted Chinese tourists’ luxury spending overseas.
Imke Wouters, Partner, Oliver Wyman


Contents
The Return of Chinese Consumers Abroad
© Oliver Wyman
20
Interestingly, we see a big difference between experienced and new luxury shoppers (those 
who only started buying luxury products during COVID–19 and so only have domestic luxury 
shopping experience). Approximately 85% of experienced luxury shoppers expect to revert 
to shopping overseas now that borders are open, only about a third of new luxury shoppers 
share this sentiment. These new luxury shoppers also have very high expectations on service 
levels internationally as they are accustomed to frequent and personal interactions with the 
sales associates of their core luxury brands domestically. With the luxury market booming in 
China in 2021, all luxury brands have invested in boosting their offerings in China. Given the 
wide domestic offerings, Chinese luxury shoppers see less of a need to shop internationally 
and are now also accustomed to buying luxury products when they want them, rather than 
waiting to travel. Gen Z represents a significant portion of these new luxury shoppers, and 
they are looking for new experiences and food rather than shopping. 
GEN Z IS THE BIGGEST GROUP OF NEW TRAVELERS
In the last four years, new types of Chinese travelers have emerged. Around 30% of the 
new travelers in 2023 are members of the Gen Z workforce, who now have a stable income 
and the means to travel internationally. They care less about shopping and prioritize new 
experiences they can share on social media. They typically have smaller budgets, so they 
favour destinations that are close with the aim to maximize the number of experiences they 
can enjoy in a short time. As they are accustomed to luxury shopping domestically they don't 
wish to waste their limited travel time on shopping.
Those who are anxiously waiting for the full return of Chinese travelers will have 
to wait a little longer and be prepared for a new type of Chinese traveler who has 
higher expectations, given the enhanced traveling and shopping experiences now 
available domestically.
Read more
WHAT YOU SHOULD KNOW ABOUT THE RETURN OF CHINESE TRAVELERS




Jens von Wedel 
Dave Xie
Sarah Adelfang
THE SURGE OF SOCIAL 
COMMERCE IN CHINA — 
FROM BIG 2 TO BIG 5
Navigating the evolving digital retail landscape
ECOSYSTEM


© Oliver Wyman
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Contents
The Surge of Social Commerce in China — From Big 2 to Big 5
Driven by a confluence of factors, China has emerged as one of the most advanced 
e–commerce markets in the world. With a population exceeding 1.4 billion, China offers 
an immense consumer base eager for goods and services. The country’s dynamic 
urbanization and growing middle class have created a preference for a digital transaction, 
fueling the growth of online retail.
As a result of this evolution, consumption of online physical goods has risen to 
12 trillion RMB in 2022 in retail sales value from about 7 trillion RMB in 2018, and now 
accounts for 27% of China’s total retail consumption (Exhibit 1). The market’s vast scale, 
coupled with innovative business models, efficient logistics networks, and an affinity for 
social interaction, solidifies the nation’s position as a vital hub for global e–commerce.
Exhibit 1: China total offline versus online retail consumption, 2018–2022
In retail sales value, trillion RMB
2018
2019
2020
2021
2022
30.8
7.0
32.3
8.5
29.4
9.8
33.3
10.8
32.0
12.0
37.8
40.8
39.2
18.6%
20.9%
24.9%
24.5%
27.2%
Offline retail consumption
Online physical goods consumption
Online contribution to total retail consumption %
44.1
44.0
Source: National Bureau of Statistics, Oliver Wyman analysis
A look at China reveals a change in the e–commerce landscape. The longstanding platform 
dominance of the two major players — Alibaba and JD.com — is increasingly being challenged, 
driven by the emergence of social commerce. In a short period of time the “big two” have 
become the “big five”, with the addition of challengers Pinduoduo, WeChat mini–program, 
and Douyin (known elsewhere as TikTok).
While the challengers have experienced rapid growth, the two big players have seen their 
growth nearly stagnate in recent years. Facilitated by the country’s mobile–first mindset, 
these companies have seamlessly integrated social interactions into the shopping experience, 
creating new opportunities for brands and retailers. This fusion of social networks and 
e–commerce has revolutionized how people discover, assess, and purchase products.


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Established and emerging players must rethink their strategies to thrive in this dynamic 
environment. China remains not only an e–commerce pioneer, but also a trendsetter that 
significantly influences the industry elsewhere in the world, including Europe. So, what 
conclusions can be drawn about the effects of the shift in China’s e–commerce landscape on 
the European market?
Exhibit 2: Gross Merchandise Value (GMV) evolution of key channels1
In billion RMB
2017
2018
2019
2020
2021
2022E
19-21
CAGR%
21-22
GR%
Tmall and TaoBao 
(Alibaba)
4,820
5,727
6,589
7,494
7,976
7,500- 
7,700
+10%
Mid-single 
digit decline
JD
1,295
1,677
2,085
2,613
3,297
3,482
+36%
+6%
Pinduoduo
141
472
1,007
1,668
2,441
3,1002
+56%
36%3
Douyin4
~50
~500
~800
~1,400
+300%
+70-80%
Overall
+22%
+8-9%
1. Refer to GMV of 2017 – 2021 financial year based on GMV number released by each platform and official data and 
estimation by company senior management team and broker report; 2. Extrapolated based on PDD Q1–Q3 y–o–y growth; 
3. 2022 Q1–3 revenue; 4. Estimated based on broker report.
Source: Annual reports, Broker reports, Expert interviews, Oliver Wyman analysis
UNVEILING THE TRANSFORMATIVE POTENTIAL 
OF SOCIAL COMMERCE
Pinduoduo (under its international brand Temu) and Shein have emerged as noteworthy 
disruptors in the European market recently. Notably, Temu stands out from the competition 
through its customer centricity and advanced data insights, despite still grappling with some 
operational and commercial challenges.
Unlike established players, these newcomers are not constrained by extensive existing 
IT infrastructure. The freedom allows them to build fresh data analytics capabilities 
and seamlessly integrate new technologies such as artificial intelligence. They can also 
seamlessly tap into underpenetrated marketing channels in social media. This results 
in a superior ability to attract customers and stimulate demand, especially for low value, 
nonessential goods.


© Oliver Wyman
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The Surge of Social Commerce in China — From Big 2 to Big 5
However, it’s not only social commerce retailers and retail approaches that are benefiting. 
Many conventional e–commerce brands and retailers have struggled in recent years 
to operate a profitable customer acquisition funnel through established channels such 
as search. This has left the leading platforms somewhat uncontested in their growth to take 
a top position in many Western European markets. Social media creates a new opportunity 
for brands and retailers to leverage a fast–growing marketing channel.
EXPECTED CONSEQUENCES FOR INDUSTRY LEADER AMAZON
The entry of Chinese competitors into the European e–commerce market will most likely 
usher in a new era of competition for Amazon. While the US–based company’s biggest 
competitors have traditionally lagged, the next wave of market entrants is expected to pose 
a greater risk to its market position.
The competition is coming from two ends of the market. The first is low–budget, no–name 
products. That’s a reflection on the rising cost for sellers on Amazon , particularly those from 
China. The Chinese e–commerce competitors have low costs and demonstrate incredible 
speed and agility in adapting their product portfolios, a combination that is difficult to 
imitate. Secondly, Amazon has managed to become the go–to destination for product 
information and research, creating a powerful touchpoint in customers’ journeys. But 
influencers and opinion leaders on social platforms like Instagram and TikTok are growing 
their reach in product advice (and advertising). While so far it is mostly left up to brands and 
retailers to leverage this strength, a more direct “commercialization,” as already witnessed in 
the Chinese market, would pose an imminent threat for the incumbent market leader.
Still, Amazon’s global expertise and established customer trust can serve as a valuable asset 
for succeeding in this evolving competitive landscape. Amazon has positioned itself as a 
trusted player, delivering quality as well as premium customer service (for example, return 
policies and Amazon Prime). So, while Chinese players are likely to gain popularity among 
the younger demographic — which is characterized by a strong affinity for e–commerce, 
more limited purchasing power, and an openness to explore — the older population is likely 
to remain loyal to Amazon.


The Surge of Social Commerce in China — From Big 2 to Big 5
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IMPLICATIONS FOR BRANDS AND RETAILERS NAVIGATING 
THE NEW E–COMMERCE LANDSCAPE
Brands need to prepare themselves to penetrate the new channels, accelerate their retail 
capability building, and review their strategies. It is important to allocate marketing dollars 
and e–commerce capabilities appropriately and look out for synergies (category, price, 
promo) across platforms.
However, capabilities are often transferable across channels . In the past Instagram was the 
place that brought the influencer economy to life. Tik Tok has quickly taken over and put an 
even more commercial spin on it. Tik Tok has also become a serious competitor for Google in 
terms of advertising revenue.
Discussions with manufacturers and retailers clearly show that TikTok is on track to 
become the most attractive marketing platform for consumer brands. The more fragmented 
e–commerce landscape is a double–edged sword. On the one hand, brands need to 
build presence on more platforms, which requires a more even distribution of resources 
and higher overall investment. And earlier efforts to build differentiated positioning 
for different platforms based on different segments are likely to be down the drain.
At the same time, this increasing number of options available to customers due to this 
fragmentation may give them greater bargaining power in terms of traffic, promotion, 
and consumer data visibility. Brands also need to reflect on how new e–commerce platform 
opportunities might contrast with the sustainability goals they have set. The agility and 
speed demonstrated by those platforms, in particular Shein, come with ethical concerns 
over labor practices and sustainability that could affect brand reputation.


Frédéric Thomas–Dupuis
Randall Sargent
Danny Zhang
8 LESSONS TO MASTER 
PERSONALIZATION IN THE 
RETAIL INDUSTRY
Leverage personalization to win customer loyalty
ECOSYSTEM


© Oliver Wyman
28
Contents
8 Lessons to Master Personalization in the Retail Industry
Customers are increasingly expecting personalized recommendations, offers, and greetings 
through a seamless omnichannel experience. In fact, according to Salesforce, 73% of 
consumers expect brands to understand their unique needs and expectations, while 
56% expect all offers to be personalized. Globally, 70% of business leaders are boosting 
investments in personalization, business intelligence platform Statista finds.
However, while many retailers have only recently developed personalization capabilities, 
and few have truly mastered them, we can learn from the common mistakes observed in 
the industry.
1. START WITH A COORDINATED VISION
Personalization can mean different things to different people, from personally greeting 
top customers to personalizing search results on a retailer’s webpage to serving up the 
next best–personalized offer. Without a coordinated vision, efforts can appear disjointed 
to customers who receive mixed messaging and overlapping deals. As retailers embark 
on building personalization capabilities, it’s important to build consensus around a clear 
destination so various teams can work towards the same goal.
2. INVEST IN YOUR LOYALTY PROGRAM IN PARALLEL
Personalization requires rich customer loyalty data to make recommendations most 
relevant. Retailers should focus on driving loyalty sign–ups through in–store signage (for 
example, QR codes) and campaigns (for example, extra bonus points for creating a profile 
or downloading the app) in parallel to or in advance of building personalization. In a recent 
pilot, we found that a combination of personalized communication and in–store signage and 
kiosks resulted in 14% more new sign–ups. Personalized offers and communication can help 
drive engagement, but retailers need a strong foundation of customers they can track and 
reach to reap the full benefits of personalization.
3. PERSONALIZATION IS NOT JUST ADVANCED TARGETING OR SEGMENTATION
True one–to–one personalization requires a complete flip in mindset from the traditional 
ways of marketing, where a company develops an offer or campaign and then determines 
the right customer segment to send it to. A better approach is to start with customers and 
determine through a combination of business rules (for example, what are the priorities 
and strategic decisions to layer in) and algorithms (for example, collaborative filtering, and 
propensity modeling) what each should get from a bank of content, offers, and campaigns.
4. OFF–THE–SHELF TECHNOLOGIES ARE (OFTEN) NECESSARY BUT NOT SUFFICIENT
There is no single solution that comprehensively delivers one–to–one personalization. 
Instead, building a personalization capability requires stitching and tailoring various types 
of technology together: New machine learning/artificial intelligence algorithms (“the brains”) 
should be built in a flexible and scalable environment and delivered to customers via existing 


8 Lessons to Master Personalization in the Retail Industry
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Contents
off–the–shelf solutions. In a recent pilot, we leveraged the retailer’s CRM software to deliver 
personalization to customers, feeding it the outputs of algorithms we built that flexibly 
ranked the most relevant offers for each customer.
5. CURATING EXISTING OFFERS DRIVES SIGNIFICANT VALUE
Many retailers feel that personalization requires multiplying their volume of content, offers, 
and campaigns. In reality, they can drive substantial financial impact through curation 
of what they already have. For example, a South American grocer recently launched a 
personalized digital flyer that led to a 2%–5% increase in customer spend, simply by curating 
existing offers and content without introducing any new personalized offers or discounts.
6. GENERATIVE ARTIFICIAL INTELLIGENCE (AI) CAN HELP, NOW
Generative AI can help to increase the amount of content, offers, and campaigns without 
requiring significant additional creative resources. We’ve tested leveraging generative 
AI to personalize email greetings to customers, finding that it drives twice as many click–
through rates. This new technology requires human oversight and review but can massively 
accelerate creation.
7. DESIGNATE A CROSS–FUNCTIONAL TEAM
Personalization requires coordination across many parts of the organization, including 
digital, marketing, merchandising, and IT. We see the most effective organizations creating 
a small, dedicated cross–functional team focused solely on building and sustaining 
personalization capabilities and coaching and challenging the rest of the organization to 
make use of what’s available.
8. TAKE ACTION BEFORE EXTERNAL DISRUPTION FORCES YOUR HAND
In jurisdictions around the world, local governments are starting to limit print flyer distribution 
or ban it altogether for environmental reasons. In other markets, sudden increases in printing 
and distribution costs can leave retailers stranded. Creating a digital alternative that can be 
personalized will allow retailers to stay on the front foot.
The rapid advance of technology has opened the doors for exciting personalization 
opportunities. As retailers develop these capabilities and unveil this technology, it will be 
important to keep these lessons top of mind.
Additional contributor Felix Dumont




Coen de Vuijst
Dominik Böhler
Alexander Mol
TECH SOLUTIONS FOR 
RETAIL MERCHANDISING 
SUCCESS 
The future of retail management is being reshaped
INNOVATION


Tech Solutions for Retail Merchandising Success 
© Oliver Wyman
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Contents
The future of retail management is shaped by technology, providing customers with 
a personalized, multi–touchpoint shopping experience while accelerating the innovation 
cycle. However, estimating the pace of change, identifying fads from trends, and making 
the right technology investments are difficult tasks. With supply chain disruption and 
inflation impacting customer budgets, retailers must focus on merchandising and sourcing 
to maintain their competitive edge. Technology can help mitigate the risks of economic and 
geopolitical factors, as well as the growth of discounters and rising labor and energy costs.
Exhibit 1: Five critical areas of focus for technology in merchandising and sourcing
Priorities
Why do this?
1	
Further automate the merchandising levers
•	 Make better decisions
•	 Free up time and resource by automating
2	
Bring an E2E cost view to optimise the business
•	 Reduce business complexity and 
operating cost
•	 Win-win with customers by passing 
on savings
3	
Look at your business through a customer lens
•	 Drive growth with profitable customers
•	 Increase loyalty
4	
Build a high-tech innovation function
•	 Differentiate! Offer products customers 
cannot get anywhere else
5	
Leverage sourcing scale and get more for less
•	 Best possible prices in branded
•	 Amazing product and price in OL
Source: Oliver Wyman analysis
PRIORITY 1 
FURTHER AUTOMATE THE MERCHANDISING LEVERS
Retailers are striving to reduce their reliance on manual processes and spreadsheets 
by incorporating automation and advanced analytics into their systems. Tech companies 
that have entered the retail space have successfully implemented highly automated 
processes that are supervised by humans, which has resulted in lower costs, faster 
operations, and fewer errors. Retailers must close the automation gap to stay competitive. 
Automated promotion management, for instance, could include predictive analytics that 
generate promotions automatically and individualized digital leaflets that combine mass and 
individualized promotions. Automation can also optimize businesses by integrating insights 
from price, promotions, assortment, and supplier management. This could reduce personnel 
requirements and increase efficiency in merchandising and sourcing departments by up 
to 60%.


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© Oliver Wyman
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PRIORITY 2  
BRING AN END TO END COST VIEW TO OPTIMISE THE BUSINESS
In the highly automated world of tomorrow's merchandising and sourcing, strategic goals 
and daily actions will be closely intertwined, much like an autonomous vehicle, where 
destination input leads to efficient navigation. To achieve this, specific instructions are 
essential. Understanding cause and effect is crucial to make informed decisions, including 
how merchandising and sourcing affect cash flow and the bottom line. Currently, such 
insights are limited to gross margins or derivatives. Decision–makers need profit and loss 
(P&L) insights at the product and customer level, accounting for all costs, including cost 
of goods sold (COGS), supply chain, store labor, waste, marketing, and home delivery. 
This comprehensive view of the business will allow better decision–making in areas such as 
macro and micro assortment optimization, supplier negotiations, and customer acquisition 
and retention.
PRIORITY 3 
LOOK AT YOUR BUSINESS THROUGH A CUSTOMER LENS
A true customer perspective becomes increasingly important and personalized promotions 
and customer segmentation are no longer enough. To achieve true customer centricity, 
retailers must prioritize the acquisition, development, and retention (ADR) of customers 
and determine the personalized “best action” for each customer to move them through 
the ADR cycle. Retailers can use customer insights to improve their business by integrating 
ADR insights into core merchandising decisions, developing a "personalized next action" 
capability, and creating customers–for–life through new services like personalized apps for 
budget management, health, cooking, and sustainability. By focusing on ADR, retailers can 
build long–lasting loyalty and add meaningful value to their customers' lives. 
PRIORITY 4 
BUILD A HIGH–TECH INNOVATION FUNCTION
Retailers have an advantage over fast–moving consumer goods (FMCG) companies 
in building successful direct–to–consumer models. To gain deeper insights into consumers' 
behavior and unmet needs, retailers should blend human imagination with advanced 
technology. Behavior data analysis can help identify gaps in customer decision trees 
and discover latent needs. AI technology can scan external data for untapped trends, 
while human creativity can enhance insights. Retailers can turn these insights into action 
by investing in robust product management processes and collaborating with strategic 
suppliers for research and development (R&D) support. Innovative products can help 
retailers stand out from discounters, win the battle for customers, and provide offerings 
that are not found elsewhere.


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PRIORITY 5 
LEVERAGE SOURCING SCALE, AND GET MORE FOR LESS
Branded and own–label sourcing require different approaches. Branded sourcing involves 
obtaining accurate comparisons and standardizing terms to leverage international scale, 
while advanced technologies like fuzzy matching and interpolation can expand comparisons 
and counteract price differentiation. Collaborative sourcing involves working with a select 
group of major suppliers to reduce costs and accelerate new product development. Own–
label sourcing requires strategic and collaborative work with suppliers through multi–year 
agreements, open book arrangements, and value engineering to optimize specifications. 
Advanced retailers will increasingly utilize cost models based on commodity prices, labor 
costs, and freight to challenge supplier quotes. The automotive industry offers insight into 
future retail sourcing with sophisticated cost models and should–cost analyses.
REVOLUTIONIZING RETAIL
Retailers can use technology to improve merchandising and sourcing decision–making, gain 
granular P&L insights, and offer highly personalized customer experiences. Full–service 
retailers should leverage technology to support innovation, improve sourcing processes, 
and transition to more collaborative models. However, to succeed in the digital age, retailers 
need to recruit and retain a new mix of talent. Retailers should be realistic about what 
technology to deploy, improve their technology and data foundations, and develop new 
functionality while improving legacy tech in parallel. Retailers who make technology a core 
part of their strategy and make the right choices on technology deployment will be the 
winners in the future tech–driven world.
Read more
FUTURE OF MERCHANDISING


Sirko Siemssen
Meryem Ben–Goumi
Vikram Dhaliwal
Alexander Pöhl
STRATEGIES TO HELP 
SOLVE THE PRIVATE LABEL 
DILEMMA IN RETAIL
The new reality of private label in retail
INNOVATION


Strategies to Help Solve the Private Label Dilemma in Retail
© Oliver Wyman
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On top of inflation–induced cost price volatility, retailers are now facing the fallout of 
consumers shifting to less–expensive channels and product ranges. The latter has cost 
European retailers more than €700 million of annualized commercial margin already, 
turning many private label portfolios into liabilities within just 12 to 18 months. As 
consumer spending may not return to pre–2022 levels for several years, it is critical for 
retailers to address this challenge seriously and head–on. In our report Addressing 
The Private Label Dilemma In Retail, we highlight the actions to consider based on our 
experience working with retailers over the past decades.
At first glance, the growth of private label is good news. As cheaper alternatives to branded 
products, private label lines should allow to slow the shift to cheaper competitors or 
channels, while also helping consumers through the cost–of–living crisis. However, the 
shift puts pressure on retailers’ margins also, with volumes flowing to lower– and low–end 
range products that dilute overall profitability. As a result, while the first wave of challenges 
rooted in the return to inflation has been difficult to absorb, this second–order effect will 
create even more challenges.
The strategic intent behind added–value private label lines is clashing with the new 
reality of crumbling volumes during the cost–of–living crisis. Retailers must decide how to 
continue winning through private label while improving economics.
Our private label playbook comprises a comprehensive set of recommendations for doing 
so effectively.
IMMEDIATE ACTIONS TO IMPROVE PRIVATE LABEL MARGINS
Stop the margin erosion and enhance your ability to act based on better control and steering 
of product–switching dynamics. These are some key steps to follow:
1.	 Perform a rapid private label assessment 
What are the results of mix–changes? What are the underlying switching dynamics? 
Which internal sourcing capabilities and how can they be improved?
2.	 Get systematically on top of private label cost of goods sold and commodity 
cost opportunities 
What is the input cost evolution across all private label products? What benefits does AI 
automation offer in understanding navigating input cost modelling complexities, and 
providing leverage in negotations with manufacturers?
3.	 Run fast–track category resets based on a thorough understanding of consumer 
product switching behavior  
How to optimize product allocation, store placement, and pricing to positively impact 
switching dynamics, prevent slippage, and maintain price perception targets?


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PRIVATE LABEL ACTIONS FOR THE LONG TERM
The current crisis is a reminder that the substantial enhancements to private label 
management capabilities of the last decade are just the beginning. In most cases, there 
are still gaps in product management and operations capabilities as well as in reaching 
meaningful scale. Things to consider:
1.	 The next private label customer proposition  
Recalibrate your north star and reposition your portfolio. Consider what you want to 
grow and focus on. Translate strategy into action by defining operational targets and 
guidelines at a granular level.
2.	 Develop true product cost–management capabilities 
Move towards a true product company mindset that considers customer proposition, 
product cost, and supply chain as one.
3.	 Get real in terms of scale and focus on volume bundling 
Combating margin erosion requires a focus on volume bundling through alliances,  
backed by top–down guidance and incentives to overcome internal resistance.
Since 2022, retailers are mostly reacting to cost of goods sold (COGS) inflation via 
negotiations and pricing. As the dust settles, it’s becoming clear that retailers face another 
wave of challenges driven by consumers trading down to the bottom–end of their private 
label portfolio. This opens gaps in their profitability picture, while the declining volumes in 
the upper parts of the portfolio raise core strategic questions. The time has come to review 
assortment and private label propositions, as well as underlying capabilities, to navigate the 
storm successfully and come out on top.
Read more
ADDRESSING THE PRIVATE LABEL DILEMMA IN RETAIL


SOLUTIONS FOR DEALING 
WITH INVENTORY  
TURNOVER CHALLENGES 
How retailers manage inventory in the face of new challenges
INNOVATION
Bobby Gibbs
Purav Adiecha


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As companies look ahead to the second half of 2023, they face continued macroeconomic 
uncertainty. One thing they know for sure is that they continue to face interest rates higher 
than at any point in the last 15 years thanks to 11 rate hikes by the US Federal Reserve 
since the beginning of 2022. Higher interest rates mean additional attention to cash 
flow management.
Retailers in many sectors have already suffered from the cutback in consumer spending 
since interest rates began to increase. This trend may be exacerbated as the Fed is 
considering raising interest at least one more time before the end of the year. For retailers 
with high debt loads, an improved working capital position is an essential lifeline. Even 
for those who have strong balance sheets, the increased carrying cost from the current 
interest rates could be worth $544 million across retailers in the S&P 1500 Composite.
A KEY MEASURE OF WORKING CAPITAL EFFICIENCY
For any company, there are three key measures of addressing working capital efficiency: 
Days Sales Outstanding (Accounts Receivable), Days Payments Outstanding (Accounts 
Payable), and Days Inventory Outstanding. Receivables outstanding are rarely an issue for 
retailers, as customers typically pay in cash or with credit cards (which have very regular, 
on–time collections). Retailers can address Days Payments Outstanding (DPO) with the right 
vendor engagement approach, but these concessions often create a zero–sum proposition 
when negotiating against vendors. Our experience has shown that the opportunity for 
savings on Days Inventory Outstanding (DIO) can create more sustainable value.
Some retail sectors require more inventory than others. Inventory levels in retail are 
generally down since 2018 but have ticked up since last year as shown below. Home 
improvement retail has seen the greatest increase over this period (approximately 16% 
year–over–year and 2% annualized since Q1 2018). These retailers are expecting a decline in 
sales in 2023, which will exacerbate this issue.


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Exhibit 1: DIO for select industries within the Retail Sector shows a recent spike in 
inventory gluts
Mar ’18
Mar ’19
Mar ’20
Mar ’21
Mar ’22
Mar ’23
0
10
30
50
70
90
110
130
20
40
60
80
100
120
Specialty Stores
Department Stores
Apparel Retail
Retail Sector as a whole
Home Improvement Retail
Hypermarkets and Super Centers
Drug Retail
Food Retail
+5.4%
Source: S&P CapIQ, S&P Composite 1500 data


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SOLUTIONS FOR STRUGGLING INVENTORY TURNOVER
Below are some solutions we propose for companies that are struggling with inventory 
turnover. These solutions have been implemented by Oliver Wyman clients in the past and 
are based on the experiences of our internal retail experts.
ADD THE COST OF INVENTORY TO MERCHANDISING REPORTING AND INCORPORATE 
INTO GOVERNANCE
What gets measured gets managed; therefore, incorporating Net Working Capital (NWC) and 
its drivers into merchandising reports will bring more attention to those metrics from the 
business. This can be accomplished either by adding these NWC metrics to existing reports 
or in standalone reports that are more “cash culture”–focused. Key metrics to incorporate 
include days of inventory outstanding, carrying cost of inventory, inventory on hand, and 
days of net working capital. Management will then be better informed to take action.
IDENTIFY HIGH–INVENTORY STOCK–KEEPING UNITS (SKUS) FOR DISCOUNT AND 
SERVICE LEVEL ADJUSTMENT
At nearly every retailer, we see certain SKUs accumulate excess inventory. By starting with 
those, we can not only unlock quick wins but also find the structural reasons causing this 
inventory to build up. At this point, management will work to reduce the buildup from 
two angles:
Flush out stock: Management can expedite the sale of built–up stock through a combination 
of promotional methods (targeted offers) and changes to planogram facings (movement 
of slow–moving SKUs to more favorable in–store locations).
Adjust replenishment: Any recurring orders for the high–inventory SKUs should be 
reevaluated to reduce either the quantity or frequency of orders.
REDUCED STORE–LEVEL ASSORTMENT THROUGH CLUSTERING
When reducing store–level assortment, it’s essential to identify “safe” candidates for 
delisting — those where a high percentage of lost sales for the specific product would be 
redistributed among other products in the same “cluster.” In the switching analysis example 
below, the product on the left has near substitutes that would absorb a large percentage 
of the sales should the product in question be delisted. The same can’t be said of the 
product on the right, which would result in an almost complete loss in sales if the product 
were removed from the inventory mix.


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Exhibit 2: Companies should identify opportunities to reduce SKU counts through an 
incrementality–based measurement of assortments
Sunscreen lotion switching example
Low Incrementality 
High Incrementality 
The goal is to ultimately identify “safe” potential candidates for delisting,
resulting in an opportunity to flush out inventory
29%
2%
1%
53%
Sunscreen
SPF100 3oz
15%
Sunscreen
SPF85 3oz
Sunscreen
SPF55 3oz 2pk
95%
Luxury
Tanning Oil
Sunscreen
SPF85 3oz
3%
2%
Luxury
Tanning Oil
Non-luxury 
Tanning Oil
Sunscreen
SPF100 3oz
Though not a bad seller, 
if this SKU is delisted just 
~15% of sales would be 
lost. The remaining 85% 
would be split between a 
variety of other products.
Though this SKU is not
a bad seller, if this smaller 
SKU was delisted, a 
majority of the sales would 
be lost because there are 
few close substitutes.
Source: Oliver Wyman analysis
POOL SWITCHABLE ITEMS FOR COMBINED SERVICE LEVELS
Switching analysis can also inform where products should be grouped to pool inventory in 
setting service levels. For highly switchable products (like the sunscreen on the left above), 
shared safety stock could service all of the products in that cluster, so that each product 
does not need its safety stock. By switching from servicing safety stock from the individual 
product level to the cluster level, the total amount of safety stock on hand is reduced 
substantially. A customer decision tree can be used to ensure that all products in the cluster 
are highly switchable.


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CASE STUDIES 
WHAT THIS COULD BE WORTH
RETAILER WITH MORE THAN $25 BILLION IN SALES (50% PERISHABLES)
The following case illustrates how a large retailer with perishables was able to reduce 
inventory and simultaneously optimize supplier performance.
Oliver Wyman was engaged to streamline supply chain management processes 
and governance. Approach and measures taken included:
•	 Needs–based planning for inventories, which allowed the client to reach optimal 
service levels
•	 Specific assignment of SKUs to storage locations to improve the flow of inventory — 
this improved the readiness of inventory for delivery by 1.4 percentage points for 
perishables and 1.3 percentage points for nonperishables
•	 Assortment review and SKU rationalization
These actions allowed the client to achieve an overall reduction in inventory of 15% 
(with an overall cost reduction of $25.2 million), plus an 80% reduction in process 
disruptions for incoming goods. The client then leveraged these wins to negotiate more 
variable payment terms with its suppliers, thereby improving working capital through 
an additional avenue (payables).
RETAILER WITH MORE THAN $10 BILLION IN SALES
The following case illustrates how a retail client (nonperishables) implemented inventory 
management solutions on a large scale. The company has a wide product mix (both slow and 
fast movers) that features both national brands and private labels and more than $10 billion 
in annual sales. As part of a wider initiative to improve internal capabilities, Oliver Wyman 
was tasked with reducing working capital in the business.
Solutions the client used to better manage inventory included:
•	 Governance: The company implemented a uniform set of managerial key performance 
indicators (KPIs), which gave management a more focused view of which inventories 
were stuck and should be moved through increased promotion and discounts.
•	 Clustered assortment: As described previously, Oliver Wyman grouped the client’s 
products into switchable clusters, which helped with SKU rationalization (and elimination) 
and created more manageable service levels of safety inventory.
•	 Supply visibility: The retailer implemented new forecasts and Material Requirements 
Planning (MRP) systems to better manage the inflow of inventory.


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The client was able to reduce its inventory by 25% by the end of the project while 
improving inventory availability by 1.2 percentage points and reducing inventory shrink 
by 2 percentage points. Newly implemented supply controls and KPI dashboards have 
helped the client ensure that the improvements made have been sustainable.
CONCLUSION: RETAILERS HAVE MULTIPLE OPTIONS WHEN IT COMES 
TO WORKING CAPITAL
In the face of increased uncertainty and higher interest rates, having more cash on hand or 
drawing less from a revolver is never a bad thing. For retailers to weather these conditions, 
they should be equipped with ample liquidity and processes that turn current assets into 
cash quickly. Inventory reduction and turnover improvement are ways that can have major 
impacts in this area, and many channels exist for accomplishing them.
Joshua Korn contributed to this article


Dustin Wisotzky
Cornelius Herzog
Christian Jobst
STREAMLINING YOUR 
SUPPLY CHAIN WITH 
WAREHOUSE AUTOMATION
The secrets of the fully automated warehouse
INNOVATION


Streamlining Your Supply Chain with Warehouse Automation
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The goal of full warehouse automation might soon be in sight, at least for some. 
The idea of automating the warehouse is almost as old as logistics and supply chain 
management itself. The prime motivation of automation is to increase warehouse 
productivity and profitability while improving overall efficiency in operations by eliminating 
human error. Rising labor costs, the challenges of constructing and operating warehouses 
in highly compact footprints in inner urban areas, and safety and environmental concerns 
have all fueled continued investment in increased levels of warehouse automation. That 
journey is now closing in on its end vision for a fully autonomous warehouse that can 
operate 24/7. 
WHERE AUTOMATION IS TODAY
Most warehouses have now automated at least part of their operation. Retailers and fast–
moving consumer goods (FMCG) companies often touch level 4 autonomy — where no 
human intervention is required — for at least some part of their operation. Warehouses 
at the leading edge deploy advanced hardware and software, where several hundred 
smart robots are deployed in the warehouse to store and pick goods in a complex, three–
dimensional bin system.
It would be incorrect to assume that this level of automation has been achieved in all 
industries, however. The challenges of warehouse automation are specific to the industry. 
(See Exhibit 1.) Not only does the current level of automation vary greatly by industry but it 
can also vary even within the business. For instance, while carmakers and tier–1 suppliers 
often achieve high levels of automation in picking small components using fully automated 
systems that shuttle between store locations, these same businesses manage a much 
lower level of automation when having to handle a component portfolio that varies in size 
and weight.
As a rule of thumb, it holds true that the larger the item and the more diverse the 
product portfolio in terms of volume or weight, the more difficult end–to–end warehouse 
automation becomes. 


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Exhibit 1: Characteristic levels of warehouse automation by industry
Description
Automotive
Machinery
Retail
FMCG
Manual warehouse
No automation used in the warehouse. 
All process steps are conducted by 
manual labour.
Assisted warehouse
Some process steps use mechanization 
to support manual labor, e.g., roller belts.
Partially automated warehouse
A part of the warehouse is automated 
while other parts use manual labour,
e.g., automatic high bay.
Highly automated warehouse
Combinations of several automated 
processes are used, e.g., automatic 
unloading of trucks and storing to high bay.
Fully automated warehouse
No manual labour except for IT/service 
mechanics in the warehouse.
1 Fast-moving consumer goods.
1
2
3
4
5
Source: Oliver Wyman analysis
CHALLENGES ON THE ROAD TO FULL AUTOMATION
Many solutions are now available “off the shelf”. The technology and systems needed 
to move a pallet automatically from a truck onto a conveyor and then into the storage 
warehouse in one seamless movement, one that then merges into automatic pallet 
storage within the warehouse, are readily available. The decreasing price of sensors, 
e–labels and machine vision systems ensure that the robots, automated machines and 
the various components of the automated system are all able to communicate with each 
other seamlessly.
The biggest challenge now facing warehouse operations is that many of these hardware 
andsoftware solutions are in effect “islands” — and there is no easy way to connect these 
islands to create a system that is fully autonomous. This is true especially for warehouses 
where the automation system has evolved over time, a situation more typical than not 
in most companies. The legacy of piecemeal acquisition ensures that it will inevitably be 
a major struggle to connect the patchwork of hardware, software, and IT–architecture 
solutions. This is a challenge full automation has to tackle. Thereby, it is of paramount 
importance for companies to develop digital supply chain capabilities, where not only 
the right hard– and software is required but also the right people and an organization 
that is capable of implementing and maintaining this setup.


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A second important issue is data: Poor data quality or data incompatibility can be the 
undoing of even the best of automation systems. Connectivity and data are the equivalent 
of the blood and the cardiovascular system of the autonomous warehouse. The hard truth 
is that almost all companies today struggle with getting their data right. At every step 
in the supply chain, it is essential to have accurate, real–time data, including for packing 
specifications and lot sizes. The data has to be exact in order to enable the machine 
intelligence to decide how to handle the various items. 
GETTING AUTOMATION RIGHT 
Compared to a conventional warehouse, a fully autonomous warehouse is more akin to 
a machine for production rather than being just a place for storage. Ensuring that the 
autonomous warehouse functions as desired requires the company to think afresh about the 
role of the warehouse itself — and link seamlessly into all adjacent processes. If the benefits 
of the autonomous warehouse are to be fully realized, it is necessary for the company to 
think about reshaping their operating model and accompanying organization, including the 
processes and IT systems, in order to ensure that they are all fully integrated. 
These challenges can make the strategy, design and implementation of warehouse 
automation appear particularly daunting, especially for large corporations, such as those 
in retail, automotive or manufacturing, that often have enormous warehousing footprints 
located at hundreds of different sites. 
THE PLACE TO START: TAILORING AUTOMATION 
TO BUSINESS AND SERVICE REQUIREMENTS
The vision of full warehouse automation is big lure for many Chief Operating Officers 
(COOs). The benefits are transparent, enabling a significant performance edge and future 
cost benefits. Yet full automation might not be desirable in all circumstances given the 
current state of technology. Depending on the industry, partial automation might well 
yield a more optimal outcome. To establish whether full automation is the right goal 
fo the business requires developing a full understanding of the company’s business and 
service requirements.


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Customer and service requirements vary significantly between markets, customer segments 
and product groups. Rather than a one–size–fits–all approach, leading players follow 
a segmented approach to warehouse automation, tailoring their warehouse designs to the 
specific needs of individual channels, categories, and order profiles. They are careful to 
choose the right level of automation and the right technology for each of their segments, 
ensuring that what is implemented is able to provide the required degree of flexibility 
for a large spread of order profiles, fulfillment speeds, and scalability. 
The answer to warehouse automation is more often than not to adopt a tailored 
approach, one located in the specific service requirements of the company. By thinking 
of the warehouse automation challenge in this way, the COO is able to start determining 
the most appropriate automation strategy for the company. Done right, this will set the road 
to full autonomy.




FOOD RETAILERS  
NEED TO ACT NOW  
FOR A NET-ZERO FUTURE 
What to keep in mind when crafting transition plans
SUSTAINABILITY
Suzanne van der Meijden
Coen de Vuijst
Julien Hereng


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Agriculture and food systems are responsible for 31% of human–caused, greenhouse gas 
(GHG) emissions and are also among the biggest drivers of water use, land–use change, 
habitat destruction, and biodiversity loss. That’s according to the latest CDP Europe report, 
which surveyed some 1,500 companies representing around 75% of European market 
capitalization on corporate efforts to cut emissions. The report is produced by global 
carbon monitor CDP and consulting firm Oliver Wyman.
While around half of the European companies that filled out the CDP questionnaire 
reported having 1.5°C climate transition plans, under 5% demonstrated advanced progress 
in developing ways to connect their transition plans with business plans. According to the 
report, the food industry has one of the widest gaps between its ambition to cut emissions 
and its practices.
This year’s report featured a deep dive on grocery retail, describing the sector as strong 
on intent, but failing to translate the desire to cut emissions into action. In this deep dive, 
we will highlight key conclusions of the CDP report and next steps retailers should take.
Exhibit 1: Food retailers intent and desire to cut emissions into action
Intent
Action
Climate
Engages with their supplier 
on climate-related topics
Includes climate KPIs 
in supplier contracts 
79%
94%
39%
37%
Indicates freshwater is 
important for direct use
Requests suppliers about 
water use data1
Water
72%
100%
39%
14%
Adopted a public commitment 
to reduce deforestation 
Embedded deforestation 
footprint monitoring activities
Forest
79%
87%
43%
20%
CDP respondent average
Grocery retail
1. Respondents indicating that they do not know if they request their suppliers about water use are marked as no.
Source: Oliver Wyman analysis; CDP data; retail sector deep dive
Grocery retailers are among the most value–chain dependent sectors in the economy, with 
97% of their emissions produced upstream in supply chains or downstream with customers. 
These are referred to as Scope 3 emissions, and for companies, these emissions are 
among the hardest to quantify and reduce because they are not in the direct control of the 
manufacturer or retailer.
In practice, most grocers are not yet creating the kind of contractual relationships with 
suppliers that leverage doing business with them as incentive to cut emissions and protect 
nature. More than 70% of grocery emissions are being generated by these suppliers. 
Downstream, too, grocers could incentivize customers to buy products with smaller carbon 
footprints through pricing, assortment, and promotion practices.


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THE KEY STEPS GROCERY RETAILERS MUST FOLLOW 
TO ACHIEVE CLIMATE GOALS 
To make meaningful steps towards closing the delivery gap, grocery retailers need to act 
now, detailing out how they will achieve their climate goals. For grocers the key efforts 
are likely to be through departments sourcing products and those merchandising them:
Develop a sustainable procurement strategy:
•	 Screen the assortment of products and determine how to make it more sustainable 
by finding new products or new sources of old products that will reduce their carbon 
footprints. This may require bringing new suppliers onboard with more sustainable 
operations or in areas that regulate impacts on nature. It also may involve relying more 
on private label merchandise where grocers have more control.
•	 Make demands on suppliers about practices deemed acceptable and set targets 
for reduction of emissions. Be clear about the consequences if suppliers fail to comply, 
which could involve cutbacks in business with the supplier or the delisting of the supplier
•	 Monitor the progress of suppliers through clearly structured, regular data exchanges and 
help the supplier, if necessary, to develop tools to measure progress
Transform merchandising and guide consumers in the right direction. Then leverage 
the extra efforts in negotiations to encourage suppliers to participate. For instance:
•	 Provide attractive placement and increase promotion for sustainable products
•	 Decrease promotions that encourage waste or promote unsustainable products  
•	 Adapt target margins for sustainable products to allow for more of them to be used
RETAILERS SHOULD KEEP THE FOLLOWING ELEMENTS 
IN MIND WHEN CRAFTING TRANSITION PLANS 
•	 Approach the transformation with both top–down and bottom–up strategies to create 
a culture of sustainability in which central management and operational staff are all 
working toward net zero
•	 Be transparent about the short–term financial implications as well as long–term finance 
and risk benefits of the transition with stakeholders including financial institutions, 
shareholders, employees, and even customers
•	 Prioritize battles and commit only to achievable and meaningful actions — avoid 
announcing small, token measures
•	 Bring consumers on board, and keep in mind that readiness strongly differs 
per geography
•	 Anticipate that this is an effort that must be sustained over decades and through 
successive generations of managers to be successful


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Food Retailers Need to Act Now for a Net-Zero Future 
As scrutiny of transition plans increases, grocery retailers will begin to feel the heat 
around emissions and their impact on nature. Being proactive will at least put companies 
on the right side of the debate.
Read more
STEPPING UP: STRENGTHENING EUROPE'S CORPORATE CLIMATE TRANSITION


Mehdi El Alami
Dustin Wisotzky
Florent Gallon
Stefano della Rossa
DELIVERY 
DECARBONIZATION  
PATHWAY
How can e–commerce delivery become carbon neutral?
SUSTAINABILITY


Delivery Decarbonization Pathway
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The breadth of products offered through e–commerce has expanded, and more categories 
are now available online, from a greater number of vendors around the globe. Online and 
offline shopping are more closely integrated, and second–hand goods are increasingly 
popular. More delivery options are available, and related services — such as tracking and 
rerouting — are becoming standard.
This growing diversity offers customers more opportunity and choice to find what 
they want. But it also makes it increasingly difficult for both shoppers and retailers 
to understand the environmental impact of online purchases — and, more specifically, 
of delivery.
Our previous study of e–commerce, published in 2021, highlighted that in Europe, 
the environmental impact of e–commerce is positive: Online shopping in Europe generates 
an average of between 1.5 and 2.9 times less greenhouse gas (GHG) emissions than offline 
shopping. The study also demonstrated that emissions from both types of shopping vary 
significantly by product type, country, and — more importantly — customers’ locations 
and purchasing behavior.
The objective of this study is to go to a further level of granularity and focus on delivery 
emissions — to compare the emissions from various delivery models, to identify the main 
drivers, and to determine how delivery–related emissions of CO2 equivalent (CO2e) can be 
further reduced. Does home delivery generate higher emissions than pickup–point delivery 
(PUDO: pick up, drop off)? Does faster delivery result in higher emissions? How can the best 
technologies available today help reduce delivery emissions? What would it take to reach a 
30% reduction in emissions per parcel by 2030 compared to the 2019 level?
Several major parcel operators have committed to at least matching the EU Green Deal 
target of being climate–neutral by 2050. Among them, the sustainability leaders are aiming 
to reach net zero by 2040, 10 years earlier. Most initiatives address the entire value chain, 
encompassing renewable energy sourcing and production, carbon–neutral buildings, 
carbon–neutral packaging, and zero–emissions transport — and complementing these 
measures with carbon offsetting.
To substantially reduce delivery–related emissions, resources and efforts will need to be 
focused on the levers with the greatest impact, and multiple complex solutions will have 
to be navigated. This calls for a comprehensive assessment of the emissions generated 
by today’s delivery modes and an understanding of possible trajectories to decarbonize 
these modes.
This new study focuses on six countries, which together account for over 60% of European 
online sales: France, Germany, Italy, Spain, Sweden, and the United Kingdom. It is based 
on an analysis of official statistics, our proprietary CO2e impact model, data made public by 
delivery operators and confirmed through interviews, and consumer surveys conducted 
in 2022.


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CUSTOMER STANDPOINT: FASTER DELIVERY, 
MORE DELIVERY OPTIONS, MORE ATTENTION 
TO THE ENVIRONMENT
Beyond prices, consumers are often faced with three major questions when choosing 
a delivery option: Do they want a parcel delivered to their home — or to a nearby location 
where they can pick it up? How fast do they want to get their purchase? And what is 
the environmental impact of the available options?
Home delivery remains the preferred option for receiving an article purchased online 
inthe six countries studied. On average, more than 60% of e–shoppers say they favor it.
Fast delivery (in less than two days) is an important decision factor for 45% of e–shoppers 
and for up to 72% of frequent buyers. Next–day delivery is offered by 70% of the largest 
European e–stores.
87% of all e–shoppers are keen to change their habits if it can reduce their environmental 
impact. Their preferred actions are, in order: grouping orders (26%), favoring national 
shipment (16%), walking to a PUDO location (16%), and choosing an environmentally 
friendly merchant (16%). The least–popular action, preferred by just 13%, is a delayed 
delivery if it could reduce delivery emissions.
EMISSIONS FROM DELIVERY MODELS: SCALE AND COUNTRY 
ENERGY MIX MATTER MORE THAN SPEED
Our analysis shows that delivering at home a single, 1 kg parcel through a country’s 
most common postal system in two days or more generates an average of 1,075 gCO2e, 
a measure of the global–warming effect of greenhouse gases in terms of the equivalent 
quantity of carbon dioxide. Different delivery models were compared to understand the key 
emissions drivers. The results show that the best way to minimize emissions per parcel is 
not to reduce delivery speed but to optimize last mile delivery and use the largest possible 
vehicles in the linehaul and maximize their loads.
The second most important factor influencing emissions is the size and location of buildings — 
hubs, delivery stations, and pickup points. Buildings’ impact can be even greater than that of 
transportation, especially in countries that depend heavily on fossil fuels to produce electric 
power, such as Germany and Italy (500 to 600 gCO2e per parcel compared to the average of 
300 gCO2e per parcel).


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Delivery speed by itself does not drive emissions. When ranking delivery options by lead 
time for the consumer (the gap between ordering and delivery), emissions form a U–curve: 
the fastest and slowest options have the highest emissions (see Exhibit 1). The slowest 
option (international delivery in 10 days or more) has the highest emissions (six times 
the level of national delivery). National deliveries in one to four days generate emissions 
ranging between 10% lower and 15% higher than national standard delivery. Same day 
options can generate emissions up to three or four times higher than national standard.
Exhibit 1: Base case — Emissions by delivery model (gCO2e/parcel)
International 
delivery
by air
1,245
3,115
4,036
6,392
Europe 
cross-border
by road
1,075
National 
standard
1,075
National 
next day
1,011
Suburban 
distribution 
center
Standard 
PUDO
Standard 
locker
Quick 
commerce
Ship
from 
store
Delta vs National standard
+360-650%
+15%
N/A
+0-15%
-5%
-10%
-10 - +5%
-10 - +5%
+200%
+50-330%
Standard
with
microstation
968
965
982
4,978
7,985
1,230
4,617
International models
Home delivery models
Out-of-home models
Store-based models
Transport
Sensitivity range
X
Building
Packaging
Lead time (Days)
IT
National standard level
10
3-4
2-3
1-2
1-2
1-2
2-3
0-1
1,611
Source: Oliver Wyman 2023


Delivery Decarbonization Pathway
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DECARBONIZATION PATHWAY: 30% REDUCTION 
BY 2030, THEN 60% REDUCTION AT FULL POTENTIAL 
WITH KNOWN TECHNOLOGIES
Reaching a 30% reduction in greenhouse gas emissions by 2030 would require action on all 
sources of emissions, through the generalization of today’s best practices, the deployment 
of emerging clean motorization technologies, and the improvement of countries’ energy 
mixes. This 30% goal has been derived from the various targets set by the EU Commission 
for trucks, vans, packaging, national energy mixes, and other factors.
In the long term, pushing decarbonation drivers to the maximum level technically possible 
could lead to a reduction in overall emissions of between 55% and 60% to 448 gCO2e. 
That would leave 40% to 45% remaining before full carbon neutrality is achieved, through 
new technologies or infrastructure that is even more energy efficient.
Exhibit 2: Parcel delivery decarbonization roadmap by country (gCO2e/parcel)
2030 milestone
Average long-term 
emission reduction
Emission reduction
gCO₂e/parcel today
1,600
600
1,400
1,200
1,000
800
400
200
0
0
10%
20%
30%
40%
50%
60%
70%
France
United Kingdom
Germany
Sweden
Spain
Italy
Source: Oliver Wyman 2023 


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This report is the result of an independent study led by Oliver Wyman. It was conducted over 
a 12–week period and commissioned by Amazon. The methodology has been defined by 
Oliver Wyman independently of Amazon. The analysis, conclusions, and projections are those 
of Oliver Wyman only. The analysis is based on official statistics up to 2021 (unless stated 
otherwise) and publicly available information. The study does not use any private information 
from Amazon or other retailers or transport operators. Consumer behavior data is based 
on proprietary surveys conducted by Oliver Wyman in 2022 across Europe (France, Germany, 
United Kingdom, Sweden, Italy, Spain).
Read more
DELIVERY DECARBONIZATION PATHWAYS


CONSUMER AND HOME 
ELECTRONICS — 
GOING FULL CIRCLE
Joint study from GFU and Oliver Wyman
SUSTAINABILITY
Dr. Martin Schulte


© Oliver Wyman
62
Contents
Consumer and Home Electronics — Going Full Circle
The concept of the circular economy, where materials and products are reused and recycled 
for as long as possible, is certainly a noble one. However, our latest research revealed that 
some countries still have work to do to achieve this ideal. Even in Germany, the supposed 
“world champion of recycling,” a third of the country’s old kitchen appliances, washing 
machines, and entertainment electronics — and an even higher share of smartphones — 
are not recycled. The material value of discarded devices amounts to €5 billion nationwide.
The primary reason for this waste of resources is a lack of awareness about recycling 
options. In our recent survey, conducted with the electronics industry trade group gfu 
Consumer & Home Electronics, which involved 1,000 consumers from Germany, the United 
Kingdom, and France, it was found that one–quarter of the respondents did not know 
ecologically sensible ways to recycle electrical devices. That was especially true for younger 
people. Only half of adults under 35 knew how to recycle a large kitchen appliance.
Exhibit 1: Overview of consumers recycling knowledge
Large kitchen
appliance
70%
Consumer
electronics
69%
Mobile
phones
72%
Washing
machines
69%
Source: Oliver Wyman Consumer Survey 2023
Germany is a country of bulky waste collection. But there is a 
lack of implementation when it comes to recycling electrical 
appliances. At the same time, younger people are taking a more 
holistic approach to the circular economy by buying refurbished 
devices or renting instead of buying them.
Dr. Sara Warneke, Managing Director, GFU


Consumer and Home Electronics — Going Full Circle
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Contents
Exhibit 2: Number of unused or broken appliances in homes
Plus: Rare earth minerals, such as Neodymium, Cerium, Yttrium and more.
45 kg
Steel
4 kg
Copper
3 kg
Aluminium
11 gr
Lithium
0.3 gr
Gold
0.6
Washing
machines
0.7
Large kitchen
appliance
1.1
Small kitchen
appliance
1.7
Consumer
electronics
2.0
Mobile
phones
Source: Oliver Wyman Consumer Survey 2023
 
Many e–waste recycling options, including returns to electronics stores, supermarkets, and 
the original manufacturers, were largely unknown to survey respondents. The results stand 
in sharp contrast with other categories of materials. Roughly 90% of all respondents knew 
how to properly recycle paper, plastic, glass, and clothing. To remedy this, consumers need 
more convenient and free options such as designated recycling points, e–waste collection 
days, and incentive systems.
A more effective resource utilization in consumer electronics 
requires greater efforts from manufacturers, retailers, and 
policymakers alike. Going full circle is in everyone's interest. If the 
European Green Deal is to be taken seriously, manufacturers need 
to rethink their product designs.
Dr. Martin Schulte, Partner, Oliver Wyman
In addition to issues with recycling, the study found that consumers get just 22% of their 
electronic devices repaired. The causes for that low figure are mostly solvable through 
efforts by legislators and industry to improve product repairability and increase the 
availability of spare parts.


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Exhibit 3: Main reasons for not repairing appliance
Too expensive
It cannot be repaired
I wanted a newer 
version 
Found nobody who 
could repair it 
No spare parts available
I did not want the item 
anymore 
Would have taken too 
long 
Washing
machine
Large 
kitchen 
appliance
Small
kitchen 
appliance
Consumer 
electronics
Mobile 
phone
I didn'r repair 
this because:
Too much effort
Source: Oliver Wyman Consumer Survey 2023
This is where the EU's Green Deal initiative comes in, with France leading the way as the pilot 
market for the "repairability index" introduced in 2021. Under this system, manufacturers 
calculate a score between 0 and 10 to each electronic device, indicating how difficult it is 
to repair and informing customers about their available repair options prior to purchase. 
It's been effective. In France, the repair rate stands at 32%, surpassing both Germany 
(22%) and the United Kingdom (24%). Additionally, there is growing pressure, especially 
among younger adults, for free returns and improved information about recycling options 
in general.
Read more
CONSUMER AND HOME ELECTRONICS – GOING FULL CIRCLE


Simon Glynn
4 WAYS TO ALIGN
CORPORATE INTERESTS TO 
SCALE CLIMATE ACTION
The next stage of action for corporate climate leaders
SUSTAINABILITY


4 Ways to Align Corporate Interest to Scale Climate Action
© Oliver Wyman
66
Contents
Originally published in World Economic Forum 
The step change in corporate climate action in the past few years has been extraordinary. 
Yet we are more than halfway through the critical period between the 2015 Paris Agreement 
and 2030, and emissions are still rising. Clearly, the world needs to scale up.
For our research report on Climate Action At Scale , launched at Climate Week NYC, 
we spoke to climate and sustainability practitioners from some of the world's largest 
corporations on their experiences in making this shift. They recognize that what needs 
to come next will be qualitatively different from what we have seen so far. In a survey 
of 200 climate practitioners, half see decarbonization as being a serious challenge — 
either an “existential threat” or “highly concerning” — by 2030, while a third already see it 
that way.
They are also clear about what is needed, what they can do and where they depend 
on others. Here are four lessons we learned:
1.	 You can’t act at scale against your interests. Leaders at scaling up are creating 
the conditions for corporate and climate interests to align
Doing something because it is the “right thing” is a recipe for incrementalism. Trying to act 
at scale on that basis creates justifiable resistance, because the pressure to perform 
commercially is too strong. This resistance fades when a company’s corporate interests 
and climate interests coincide.
The strongest examples are in B2B businesses that are finding profitable ways to act 
as decarbonization service providers for their corporate customers. Interests might align 
for Ball Corporation, for example, if investment in building a circular economy in aluminum 
displaces the use of competing, less recyclable materials in beverage packaging. Interests 
might align for Maersk if consumer brands concerned about their own carbon footprints 
pay a premium for shipping powered by biofuels rather than fossil fuels.
2.	 You can’t achieve climate action at scale just by reducing. But you can by building
Emission reductions are critical, but reducing to zero means doing something differently, 
not just emitting less. Scale leaders embrace the creative destruction that typically drives 
transformation and innovation. It’s about renewal: of the business, the industrial sector it 
operates in and the broader economy. At the core, it’s about new value propositions that 
companies have developed. These include offerings that grow the share, whether or not 
at a price premium, of low–carbon solutions at the expense of higher–carbon alternatives, 
and propositions that save money through operational efficiencies, usually in energy but 
also in people and materials.
Sodexo, for example, is reducing its Scope 3 emissions by rebalancing the food it serves 
in clients’ offices, schools and other institutions. It is introducing “low carbon meals”: 
not plant–based or vegetarian diets, but a shift in the balance of what is on the plate toward 
less meat and more vegetables. The initiative takes a big investment in the reskilling 


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of its cooks, but it pays for itself in the competitive proposition for corporate clients, 
and in the shift from animal to vegetable protein, in addition to the decarbonization benefit.
3.	 Leaders in climate action at scale are adopting new business designs, using new 
mindsets to earn new rewards
As one practitioner put it: “What we can do a traditional business case for, we’ve done.” 
To go beyond, leading organizations are open to new ways of thinking — about risk and 
uncertainty, about what makes a business case and about the capabilities that will matter 
in the future. We identified a wide range of arguments used to support investments at scale 
that would not convincingly generate a competitive financial return relative to the baseline 
of today’s business.
Businesses that are moving ahead are instead using arguments based on:
•	 Competitive differentiation: Positioning to meet new demand from business customers.
•	 Protecting revenue: Investments to preserve the company’s licence to operate as 
stakeholder expectations change.
•	 Enabling revenue: Investments without which some of the value–creating visions 
described earlier would not be viable.
•	 First mover advantage: Investments to learn, demonstrate and lead.
•	 Anticipating or influencing regulation: Take action to remain competitive in the face 
of future regulation or carbon pricing.
•	 Delegating investments: Impose decarbonization requirements on the supply chain.
•	 Avoiding stranded assets. Move forward to avoid being left behind.
•	 Filling the return gap. Structure or fund an investment that gets an innovative solution 
to a tipping point, making a non–commercial solution commercially viable.
4.	 Climate action at scale depends on investors, policy–makers and other players for 
solutions as well as profitability. Companies can’t do it by themselves, but they can 
show the way
In the absence of much pull from the end consumer, which nobody is expecting, 
these corporate initiatives are built on two insecure foundations: continuing investor 
commitment and evolving public policy. “Creating the conditions”, as we described in the 
first point, may mean bringing about whole ecosystems, regulatory environments and 
financing, not just new customer value propositions.
The appetite is strong for a clear policy environment that will make companies’ plans 
for climate action at scale viable, both practically and commercially. Meanwhile, the leading 
companies we interviewed are not passively waiting. They are positioning themselves, 
making the moves they can, and working together with business partners, investors and 
policy–makers to shape a future in which they can scale up their climate transitions.
Read the original piece Here


Michael Lierow
SECRETS OF EFFECTIVE 
LEADERSHIP IN TIMES 
OF CRISIS
How leaders can respond to unexpected events
LEADERSHIP


Secrets of Effective Leadership in Times of Crisis
© Oliver Wyman
69
Contents
The past few years have sprung plenty of surprises on business leaders – COVID-19, the 
subsequent supply chain crisis, and then, once everything looked like it had startled to 
settle down, the massive disruption from the war in Ukraine. The highest inflation for 
several decades, increased interest rates, and a new international banking crisis resulting 
from poor bond yields have been poured onto the mix, adding fuel to the fire. And for many 
businesses what is burning is margin.
These challenges have stretched business leaders. The world has moved from a time 
where an occasional crisis might be expected to one where continuous crisis management 
is rapidly becoming the norm. In this article, we explore the personal challenges leaders 
face during a crisis and the innovative approaches required to lead effectively in these 
situations. 
UNEXPECTED DEMANDS ON LEADERSHIP
In troubled times, as the business environment moves from the familiar to uncharted 
territory, leaders are called upon to show ingenuity in their responses. Dealing with the 
complexity and uncertainty produced by a crisis, let alone a whole string of them, demands 
not only a willingness to show flexibility but also knowledge of how to demonstrate the 
leadership required. This is both contextual and personal.
Becoming more effective requires increasing the range of your responses. This in turn 
demands increased self-awareness about how you act when under severe pressure.
To respond appropriately to the unexpected often requires doing something new and 
untried. In a crisis, nothing is fixed. But without adequate personal preparation, our 
instincts and habitual actions are always capable of undermining even the best-laid plans. 
Rehearsal in responding to the unexpected can prepare us for the real event.
CHARACTERISTICS THAT ARE IMPORTANT FOR A LEADER 
IN A CRISIS
Here are a few suggestions on how to prepare yourself for a crisis drawn from an effective 
“leadership workout” carried out by a successful COO. The exercises carefully combine 
our right-brain capacity for sensing and feeling with more left-brain cognitive and 
analytical approaches.


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Become familiar with the unfamiliar: Start by recognizing your comfort zones, as these 
tend also to be our default options in times of crisis. What is your preferred leadership 
style when hard pressed? What do you do, what do you say, and what do you not do? What 
alternative ways of leading might be more effective?
Get comfortable with the uncomfortable: The goal here is to turn our sense of stress 
and discomfort into our ally. In past crises, what feelings and thoughts distinguished 
the moments when you have felt, or have actually been, out of your depth? Label 
this vulnerability for what it is. Recognize how stress affects you physically and label 
these feelings as your personal “danger signal”, the “red flag” that can alert you to 
impending crisis.
Tune into the stressful moment: The goal is for you to become aware of your danger 
signals as early on as possible. Once you have identified what happens to you in stressful 
moments during times of crisis, learn to recognize this feeling in everyday circumstances. 
What can you do to modify how you respond so as to ensure that the danger signals are of 
benefit to you and an ally during crisis?
Limber up the agility muscle: The goal is to become more flexible in your leadership 
responses in changing circumstances. From past experience, what are your own red flags 
telling you not to do? Practice alternatives. Try out a number of different leadership styles 
and become familiar with how this makes you feel and how it affects others.
Act expansively when under pressure: Most of us, when under severe pressure. We 
narrow down our options and revert to well-tried solutions. We need to train ourselves to 
do the opposite, to open up the solution space during such times by involving others in 
tackling the challenges. Who is it that you will turn to for extra input during a crisis? Who 
has complementary skill-sets and can bring a different perspective? What novel approaches 
are you willing to embrace?
The “leadership workout” will help encourage the practice of right-brain approaches that 
are unfamiliar to many leaders. This practice is in direct contrast, however, to the impulsive 
behavior typified by following our “gut instinct”. Our first responses are sometimes the 
wrong ones. The testing of our potential responses prior to enacting them, to establish 
whether they are appropriate, remains always the first duty of a responsible leader.
For more practical advice on how to effectively lead in times of a crisis, read our in-
depth analysis.
Read more
SECRETS OF EFFECTIVE LEADERSHIP IN TIMES OF CRISIS


Hunter Williams
UNDERSTANDING AI’S IMPACT 
ON JOB AND INDUSTRY  
TRANSFORMATION
How the next GPT will reshape our economy
LEADERSHIP


Understanding AI’s Impact on Job and Industry Transformation
© Oliver Wyman
72
Contents
In an intriguing twist of historical irony, the product that introduced generative AI to the 
world is aptly named ChatGPT. Within this context, GPT stands for “generative pre–trained 
transformer,” a term for a class of large language models (LLMs). However, in the annals of 
science and technology, “GPT” has long held another meaning: “general purpose technology.” 
These are innovations with applications so sweeping that they affect entire economies and 
civilizations. Examples of GPTs in this sense include the wheel, the printing press, the internal 
combustion engine, and the internet. The question now arises: will generative AI become 
another GPT, with similarly far–reaching implications and impacts? If so, how will it affect 
today's industries, and what can business leaders do to anticipate its impacts?
The impact of AI on various jobs and industries has been a topic of much discussion. 
Business leaders face hard decisions on how much to invest in deploying AI, where to focus 
the efforts, and how to manage the risks.  For private equity investors and other financial 
sponsors, understanding how their portfolio is exposed to AI’s risk and opportunities is 
crucial so the right investment decisions can be made and the right guidance given to 
portfolio companies.
To simplify this complex topic, we believe two dimensions are worth considering: first, the 
degree to which AI is likely to impact a particular industry, and second, the extent to which 
total demand in an industry is likely to expand given greater productivity (and therefore 
lower costs) due to the deployment of AI. 
HOW AI WILL IMPACT AN INDUSTRY
The first dimension has been a topic of extensive academic research, examining the nature 
of jobs in an industry and their substitutability with AI. While many recent technological 
innovations have displaced lower earners or more blue–collar jobs — think self–order kiosks 
at fast food restaurants — generative AI's impact is expected to be greatest on middle–
skilled, white–collar jobs. The effects of AI will also be felt in management structures: fewer 
middle managers will be needed if (for example) 10 AI–turbocharged programmers can soon 
do the work of 50 today. Some jobs have more “exposure” to the potential impacts of AI than 
others, and this can be extrapolated to the industry level based on the job mix in a given 
industry. To quantify these differences, we have leveraged the AI Industry Exposure (AIIE) 
index, created by Edward Felten, Manav Raj, and Robert Seamans in their academic research 
first in 2021 and updated it to reflect the impact of LLMs specifically in 2023. Their work 
found that janitorial services, meat processing, and coal mining (to take three examples) 
should see less impact from AI while accounting, commercial banking, and legal services will 
see far more. 
But we also need to consider the second–order impacts on industries of “AI shock.” How long 
will enhanced productivity boost margins before being competed away? And what industries 
will grow most as a result of higher productivity and, therefore, lower costs? Mechanical 


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weaving, for instance, did not just make clothes cheaper; it allowed demand for them to 
explode. Instead of owning just one set of work clothes and a “Sunday best," a typical worker 
could afford to have a different outfit each day, leading to today's closets full of clothes that 
may not even be remembered or worn.
AI–DRIVEN PRODUCTIVITY GAINS AND DEMAND EXPANSION
To estimate how “elastic” an industry is to growth from a positive productivity shock, 
Oliver Wyman examined the correlation between labor productivity and real output for each 
industry in the North American Industry Classification System (NAICS) hierarchy from 1987 
through to 2019 (to avoid COVID noise). Ranked in descending order from highest to lowest 
correlation, a higher score on the y–axis can be interpreted as more potential for industry 
growth in total output due to higher productivity. By plotting industries according to both 
their expected AI impact and their historical relationship with labor productivity, (Exhibit 2), 
valuable insights can be gleaned into what might be expected in different industries over the 
coming decades.
Exhibit 1: Industry–level potential impact of AI on productivity and total output
0
2
-2
1
-1
0.5
-0.5
2.5
1.5
-1.5
AI Industry Exposure (AIIE)
0
500
400
300
200
100
50
550
450
350
250
150
Productivity and Output Correlation (Rank)
Source: Occupational Heterogeneity in exposure to Generative AI” by Felten, Raj, Seamans, Bureau of Labor Statistics, 
Oliver Wyman analysis


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Industries on the far left, ranging from dry cleaning to janitorial services, will experience 
limited direct AI impacts. For these businesses, other levers, such as scale effects and 
non–AI automation, will be more important for growth and profitability. Executives in these 
industries need not spend as much valuable time and effort considering the impact of AI, 
and investors can view them as having a lower “AI beta.” Those in the upper left may want 
to focus more on labor productivity improvements (but not from AI) while those in the 
lower left are likely to find greater returns from other productivity levers.
However, for businesses in industries on the right side of the matrix, the impact of AI 
needs to be carefully considered. In the upper right, for an industry where productivity and 
growth are highly correlated, greater labor productivity will lead, over time, to lower prices 
and greater demand for those products or services. The size of the pie could grow quickly. 
Businesses here need to focus on how to rapidly adopt AI to drive productivity and enjoy 
first–mover advantages, gaining market share and winning more than their fair share of the 
future growth to come.
Conversely, in the bottom right quadrant, where productivity and growth are less linked, 
productivity improvements and lower costs may end up shrinking the overall pie as the 
same amount of work is done with fewer resources. The positive productivity shock can be 
seen as a deflationary headwind to growth in these saturated or inelastic markets. Many 
education and healthcare services appear in this quadrant, suggesting AI may help to 
“bend the cost curve” in these industries that have suffered, for so long, from the Baumol 
effect — wages rising in jobs that have seen little to no increase in labor productivity, 
in response to increased salaries in other professions that have experienced significant 
productivity growth.


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Exhibit 2: Industry–level impact by two digit NAICS classification
0
2
-2
1
-1
0.5
-0.5
2.5
1.5
-1.5
AI Industry Exposure (AIIE)
0
500
400
300
200
100
50
550
450
350
250
150
Productivity and Output Correlation (Rank)
Accommodation and food services
Administrative and waste management services
Agriculture, forestry, fishing, and hunting
Arts, entertainment, and recreation
Construction
Educational services
Finance and insurance
Health care and social assistance
Information
Management of companies and enterprises
Professional, scientific, and technical services
Real estate and rental and leasing
Retail Trade
Transportation and Warehousing
Manufacturing
Mining
Other services, except government
Utilities
Wholesale trade
Source: Occupational Heterogeneity in exposure to Generative AI” by Felten, Raj, Seamans, Bureau of Labor Statistics, 
Oliver Wyman analysis
Understanding how your industry or the industries of your portfolio could be affected by 
AI is one thing; figuring out what to do about it is another. At Oliver Wyman, we are 
supporting our clients in developing AI strategies, integrating generative AI into their 
operations, managing the related risks, and helping them redesign work to achieve the 
optimal combinations of AI, automation, and talent. And we have an interest in getting it right, 
given our industry (falling into “management, scientific and technical consulting services”) sits 
in the upper right. By staying ahead of the curve and anticipating the far–reaching implications 
of generative AI, businesses can position themselves for success in a rapidly changing world.
John Lester, Sian Townson, and David Waller also contributed to this article
Read more
NAVIGATING THE AI REVOLUTION


TRANSFORM RETAIL 
EMPLOYEES INTO POWERFUL 
COMMUNITY BUILDERS
LEADERSHIP
Laure Charpentier


Transform Retail Employees into Powerful Community Builders
© Oliver Wyman
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Contents
Now more than ever, people are looking for their tribe. They have an increased focus on 
communicating with others in groups and communities that they are comfortable with, a 
trend that accelerated when so many were isolated during the pandemic.
This shift also extends to the business world. The more a brand and its salespeople resonate 
with a customer’s culture and what they believe in, the more loyal the customer will be 
and the more they’ll spend. Research from the Oliver Wyman Forum, for example, finds 
that more than 90% of Gen Z consumers are willing to pay extra for brands that support 
the causes they care about. Savvy retailers have begun taking advantage by enlisting their 
employees to build tailored communities around their stores through social media and other 
outlets. Striking the right tone can provide a significant sales boost, as well as vastly improve 
loyalty and reduce customer acquisition costs.
WINNING THE TALENT WARS THROUGH COMPANY VALUES
The foundation for improving customer retention in this way starts with a loyal, engaged 
workforce. Even more than customers, workers want to be aligned with the company’s 
purpose. Employers must clearly communicate what the company stands for and 
demonstrate a commitment — to environmental causes, civil rights, or other important 
social and political issues — through real actions. There is 27 percentage point difference 
in employee retention between companies that provide purpose and meaning in their work 
and those that do not. Stronger sense of meaning and purpose also has a positive cascading 
effect on the customer experience.
This helps to build an emotional connection with employees and gives them a sense of 
belonging. It also fosters a greater feeling of achievement when they can see that their work 
really matters.
On the flip side, businesses that fail to adequately uphold their values and make meaningful 
connections put themselves at a considerable disadvantage in the war for talent. Salary 
raises and flexible schedules are not enough to placate workers as the quiet quitting trend 
gives way to what business author and former Unilever CEO Paul Polman calls “an era of 
conscious quitting.” For example, more than half of US employees say they would consider 
resigning if their company’s values did not line up with their own, Polman’s February 2023 
survey finds.


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Fortunately, empowering workers to build store-based communities (and even encouraging 
them to become micro-influencers of a sort) goes a long way toward addressing these 
difficult labor issues. Not only is it an excellent way to increase their engagement, but it also 
serves to attract new employees who are energized by the company’s purpose and values. 
Workers who are truly bought in to the message will pass it along to friends and social media 
followers, which can help attract new hires and lower recruiting spend. 
THE BLUEPRINT FOR A COMMUNITY-BUILDING CAMPAIGN
Workers who can serve as the company’s “value champions” also will perform their jobs 
better and be extra valuable as community builders. Finding the right people is usually the 
responsibility of store managers, who should find staffers that spend a lot of time on social 
media and are already well-versed in creating content on Instagram or TikTok. Taking on the 
role doesn’t usually come with a direct incentive for salespeople, but it can be a way for them 
move up the ranks more quickly and get opportunities outside of their regular department.
A large cosmetics chain provides a good model for how to implement a community-
building program. The company’s stores empower one of their beauty advisors to run 
their Instagram accounts; that person is responsible for attracting an audience of like-
minded clients to the store by making them aware of special offers and inviting them to 
events. Often the salesperson will bill the store as not just a retail space, but an enjoyable 
destination for members of the community to gather. A store might throw parties, host 
product launches, or in the case of the cosmetics company, bring in makeup artists to give 
clients free makeovers.
In some cases, multiple people from the same store could be assigned as representatives for 
different communities. For example, one salesperson reaches customers on TikTok who are 
young and identify as trendsetters, while another focuses on clients who use Instagram and 
are more interested in self-care products.
The store ambassadors must make themselves highly identifiable. There is no magic bullet 
for doing so, but perhaps the best way to start is by engaging with clients directly when 
they’re at the store. To help, the store can post signage encouraging shoppers to follow the 
salesperson on social media.


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HOW STORES MAKE COMMUNITY BUILDING SUCCESSFUL
The effort to bring customers together is especially effective in smaller cities that offer fewer 
opportunities to meet people. Of course, the concept is not to target just any customer; if 
the salesperson’s reach is too broad, the community aspect will get diluted. Finding the right 
mix is easier for brands whose customer bases are relatively narrow and well-defined. The 
store can organize its communities in a variety of ways and may designate a different day for 
each one to be the focus of its events and social media attention. Ideally the parent company 
will leave the planning to the local stores, which have a better sense of their clientele and 
foot traffic.
Throughout the process, proper messaging is key. The store manager controls the 
communication strategy but should give the employee a lot of freedom within it. Again, 
people will respond only if the salesperson’s message resonates well with their convictions 
and the type of products they’re looking for. Among other guidelines, messages should 
keep the brand highly visible, use language that’s properly tailored to the audience, and be 
mindful of diversity. Whatever the channel, the company’s image must be maintained, so the 
store should designate someone as a community manager to review content regularly.
Several metrics are available to get a picture of how successful a community-building 
initiative has been. Every store manager needs to check Google comments and ratings. 
They can also monitor comments on Instagram, TikTok, and other social platforms, and 
calculate engagement rates of their employees’ accounts. Promotions that were specifically 
advertised to a single community can also be tracked by traffic and revenue.
DEVELOPING CLOSER CUSTOMER RELATIONSHIPS
Many companies are further generating word-of-mouth business by empowering sales 
representatives to step up their one-to-one interaction with customers. Luxury businesses in 
Asia have been using this technique for the past few years. Salespeople contact their clients 
on WhatsApp whenever there’s a new product coming into the store, eventually developing 
more personal relationships akin to real friendships. In China for example, 61% of Gen Z 
shoppers are in contact with their sales assistant at least twice a month through instant 
messaging, according to an Oliver Wyman study.
Retailers and brands in large cities in Europe and the US have begun following suit more 
recently. It seems clear that efforts to develop such connections will only become more 
personalized and granular in the future. Building this level of client loyalty, the strategy will 
still depend on the company’s ability to first establish a solid bond with its employees mainly 
from its purpose, value, and ways of taking care of them. From that foundation will come the 
intended savings in talent or client acquisition costs and bigger numbers at the cash register.


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