Euromonitor International's Megatrends Quantification Model estimates that the basket of personalised goods and services globally fell by a 1% CAGR from 2017 to 2022. In 2023, the global marketplace for personalised products and services sagged in the face of changing consumer preferences. Although personalised technologies continue to improve dramatically, and consumers cite high levels of interest in tailored products and services in a general sense, widespread worries about diminished purchasing power across markets slowed engagement with these options, starting in 2022 and continuing in 2023, and has temporarily changed the value proposition for higher-priced, targeted solutions.
To determine the evolution of this megatrend in 2024, Euromonitor International has built a quantitative measurement of personalisation that can be used by companies in this space to evaluate the future behaviour of a trend that still has considerable promise, despite the short-term doldrums that are manifesting at the moment.
A slowdown in personalisation
While improvements in data collection continue to be made and allow for more detailed analysis on consumers' interests, lifestyles, health, nutrition and body, commercial results for personalised solutions slackened across consumer goods in 2022 and 2023. The reasons for this slowdown were manifold: the sharp uptick in global inflation constrained consumers' appetite for higher-priced products and services; the uncertainty generated by consumers' misgivings shrunk investment opportunities from both venture capital and companies' own R&D portfolios; and the amount and variety of commercialised products with personalised capabilities correspondingly fell.
Other megatrends oriented around offering consumers’ higher-value and more compelling and customised services saw corresponding drops over the same period, with declines evident across the "experience more" and "premiumisation" megatrends as well
Source: Euromonitor International
This supports the contention that these declines were influenced by purchasing considerations and worries about value for money rather than deeper pushback against these concepts. Continued strong support for the "convenience" and "pursuit of value" megatrends are additional indications that this trend is contingent on the unique macroeconomic situation of 2022-2023.
Forecasting rebounds in personalisation
The drop in interest in personalised products and services shown over the review period will be transitory, with broad growth returning over the forecast period
Source: Euromonitor International's Megatrends Quantification Model, 2023
However, the model is relatively conservative about the overall rate of growth over this period due to several factors. The first is the likely full-year drag from 2023, which will constrain the 5-year forecast expectations. The second is an expected lag before consumer interest rebounds; recognising that consumer sentiment (especially around inflationary expectations) is typically slow to recover, Euromonitor International's forecast models do not expect a dramatic change in behaviour across many consumer goods categories in various high-inflationary markets until at least the second half of 2024, with some premium offerings in industries such as consumer health and beauty and personal care not seeing sustained interest until later in the forecast period. Together, these factors support more constrained positive projections in leading markets for personalisation, such as North America and Australasia.
However, rather than signifying a persistent sluggishness for personalised approaches in consumer goods, Euromonitor International's Megatrends Quantification Model points to areas of growth over the forecast period. Firstly, while the leading personalised marketplaces will struggle to unwind consumer behaviours that settled over the past few inflationary years, other markets with considerably less developed personalised options will have an opportunity to catch up behind strong growth; this is most likely in fast-emerging markets in Southeast Asia (with Thailand, Malaysia, Singapore, and Vietnam all expected to record extremely fast growth in personalisation over the forecast period), the Middle East (especially the United Arab Emirates and Saudi Arabia), and even in markets in Western Europe where these solutions are not yet the norm (especially the Netherlands, Spain, and Italy). It is therefore likely that the coming years will see some convergence around approaches in different regions as well as improved rates of consumer acceptance for these tools.
If these forecasts come to pass, it will offer companies and investors of personalised solutions space to further improve their platforms (and incorporate more directly fast-improving technologies like large-language models and other generative artificial intelligence applications) without rushing approaches that consumers might not be ready for in 2024. It also allows an opportunity for these companies to address longstanding consumer concerns around privacy, transparency, and data ownership that continue to limit the potential consumer base for this megatrend, especially around sensitive heath, nutritional, and physiological information. Thus, the growth prospects for personalisation are likely to rebound within the forecast period and recapture much of the promise that the concept held entering the 2020s.
For a deeper dive into the Personalisation megatrend, read our briefing, here.