Live A Little

Live A Little. Consumers' discretionary spending behavior during a potential 2023 recession is uncertain, but data suggests it may not align with traditional expectations. Financial and economic confidence is wavering globally, but a secure financial situation for many consumers is expected to maintain spending in certain areas such as fashion, technology and electronics, and personal care. Trends indicate that consumers are looking for quality items, with "luxury for less" retailers growing and searches for affordable options increasing, but there is potential for reducing prices to detract from the aspirational power of purchases.

This trend originates from the report:

GWI - Connecting The Dots 2023 - Global Trends

In 2023, the "treat budget" of consumers is likely to be impacted by potential recessions in major global economies. Financial and economic confidence is wavering, with a drop in confidence of 40% in North America and 24% in Europe. However, two-thirds of consumers say their current financial situation is secure, which could be due to pent-up savings or a favorable job market.

The top categories for consumers to treat themselves with include fashion, food delivery, technology, dining out, travel, personal care items, accessories, experiences, skincare, and in-home entertainment. Clothing is the only category that appears in the top three choices across all generations and genders. Some retailers, such as Zara owner Inditex, are seeing sales soar, while "luxury for less" retailers are among the fastest-growing.

Beauty and cosmetics are also likely to be a priority for consumers when treating themselves on a budget. The "lipstick index" from the 2001 recession is expected to repeat in 2023, with cosmetics sales up, and retailers such as Target and Walmart refreshing their beauty departments. Younger women, particularly female millennials, are more likely to prioritize buying skincare and beauty items as treats.

Beauty's resilience is likely due to a combination of factors, such as more socializing, affordability, and emotional connection..