Consumer confidence: Evaluating how consumers are actually feeling

Like many German words, gestalt has no direct English translation, but much like consumer confidence, it’s all about seeing the bigger picture. Instead of focusing on the little details, it’s about how everything works together as a whole. Think of a puzzle – rather than getting caught up in each piece, gestalt is the art of stepping back to appreciate the complete image. It’s more than just the individual parts; it’s what they create together.

Understanding consumer confidence is a lot like gestalt — there’s no straightforward translation, but it’s all about viewing the entire landscape. If you only focus on one aspect, like global GDP growth, you might assume consumer confidence is high. But zoom in on factors like inflation rates, and the outlook can quickly change.

By seeing how everything connects, you get a clearer view of what’s really happening. So, in true gestalt fashion, we’re going to uncover some consumer trends and insights that would fly under the radar if you only looked at one stat.

Let’s zoom out and see how everything comes together.

What is the consumer confidence index (CCI)? 

Measuring consumer confidence is incredibly complex, but many rely on the Consumer Confidence Index (CCI) to simplify it.  What exactly goes into the number varies from source to source, but it typically looks at how people feel about their personal finances, their views on the economy, and any major purchases they’re planning.

How does GWI gauge consumer confidence? 

We’ll cover some of the same metrics used to calculate CCI, but our goal is to go beyond the numbers. We’re taking a more human approach to consumer confidence and filling in the gaps that economic stats alone can’t cover.  

Consumer behavior isn’t rational. For example, Brits who expect their personal finances to get worse in the near future are more likely to have bought a car recently than those expecting it to get better. We know from past examples that concerns around inflation can push people to spend while they have the chance. 

So, it’s not enough to just look at bank balances or financial attitudes when trying to make sense of the economy. We should layer in spending habits and how people feel about their money to account for the entire human experience. That’s how you blend  numbers with real-world behaviors and emotions.

What does consumer confidence look like today?

Let’s start with financial optimism. So far this year, 23 out of the 53 markets we track are optimistic about their country’s economy, while 30 are pessimistic. Optimism is high in APAC, the Middle East, and Africa while Western countries are more pessimistic.

Personal finances and the broader economy are often lumped together, but looking at our data, they tell two very different stories. We found that in 52 markets – all but one – more consumers are optimistic than pessimistic about their personal finances. 

Insightful as these numbers are, they’re even more illuminating when looking at previous years’ figures. It’s easy to assume that optimism around the economy and personal finances were higher pre-pandemic than they are now. 

But you’d be (ever so slightly) wrong. 43% of markets worldwide are more optimistic than pessimistic about their country’s economy, compared to 41% in 2019. And positivity around personal finances has always been high, with 98% of markets leaning towards optimism in 2019 and 2024. Japan’s the sole market where people are more likely to express negativity, in case you were wondering. 

Looking at 2022, when the world was just getting used to the “new normal,” figures were relatively low. Only 34% were optimistic about the economy while 70% were optimistic about personal finances. Compared to this year’s figures, you’d think that an economic miracle happened, and not widespread inflation and a global cost-of-living crisis.

That’s how misleading only looking at one metric can be. Remembering our gestalt approach, we need to look at the whole puzzle before making any conclusions about what consumer confidence looks like.

What factors influence consumer confidence?

Using GWI Zeitgeist in September 2022 and October 2024, we asked consumers what influenced their economic outlook the most, and what would increase their confidence in the economy. 

In 2022, consumers said that seeing day-to-day changes in their life like price changes and their personal financial situation were top, which was to be expected. But as we pointed out, attitudes around personal finances only tell us so much. This time around, we wanted to build on what we knew and zero in on economic metrics like interest rates and the job market.

Personal finances aside, the top economic influencer is inflation rates. They’re virtually impossible to ignore, and consumers often associate this metric with raised costs, even if they don’t understand it. 

And in general, we feel the pain of losses more than the joy of gains (a bias officially known as loss aversion). Consumers worldwide are more likely to say their confidence in the economy would be restored by lower inflation rates (59%) than higher salaries (42%). Because humans don’t always make decisions based purely on logic, it’s up to brands and leaders to break down these key metrics in a way that makes sense. 

42% of consumers say they’re spending the same amount of money this year as they were last year.

There are, of course, some differences across generations. Take Gen Z for example. They’re just starting their careers, which means they’re starting to earn an income. They also may not have been financial decision makers before this period of high inflation, and don’t know much else besides the current state of things. 

While baby boomers, who are more likely to have fixed incomes and more investments, are more concerned with inflation rates and interest rates. 

By comparing key influencers and potential confidence boosters across generational lines, we get a good view of how each group’s economic views are shaped and where they get their economic information – a factor that’s often overlooked by traditional CCIs.

Similar to trends we’re seeing in political news consumption, young consumers are more influenced by what they see on social media. Platforms like Instagram, TikTok, and YouTube are full of “finfluencers” sharing money-saving hacks and breaking down what different economic metrics and policies mean for them in real life. 

Young consumers are less likely to consume “traditional” news, and this plays a role in how they view the economy. Despite the fact that some don’t believe they’ll ever own a home, pay off their student debts, or retire, their outlook is more positive than other generations. They see their peers living in the moment, and many are planning to settle down later and do the same.  

How does consumer confidence affect brands and businesses?

Brands trying to gauge consumer confidence are getting mixed messages about how people really feel, which can make it tough to develop clear strategies.

What’s clear from our data is that the general economic outlook is on the upswing. Price will likely always be a top factor (usually the top factor) when making purchases, but with rising optimism means other factors are coming into play too.

We can see a few examples of this around the world. The number of UK consumers saying environmental credentials are an important factor when choosing an energy supplier is up 30% over the past year, showing that eco-friendliness is back on the agenda in some cases. 

Travel has also become a bigger priority, with more consumers in Canada, the Netherlands, and Portugal planning to purchase vacations abroad today than in 2019. Traveling more often is also a very popular New Year’s resolution that’s gained popularity over the last few years. 

Consumers are also thinking more about value for money, not just price. In the US, online shopping habits have shifted since 2020 with growing purchase influencers like access to exclusive content/services (+15%), free gifts (+13%), and loyalty points (+12%).

People’s priorities and perceptions of value change and don’t move directly in line with inflation -it’s more complicated than that. To truly understand these changes, brands need in-depth consumer data that goes beyond surface-level trends. 

How do brands build consumer trust?

In 2019, we introduced a question asking consumers worldwide what they wanted most from brands. Since then, “reliable” has consistently ranked as the top answer, never losing its spot as the number one priority. 

Consumers everywhere are craving stability after five years of economic uncertainty. The economy has many players, but brands have a great opportunity to earn trust and build relationships by being the reliable force people are looking for in these unpredictable times.

This chart shows how the level of trust consumers have in different institutions has shifted between September 2022 and February 2024. Governments are often blamed for bad economies, and we see that trust in them has decreased. 

Instead, consumers are starting to place more trust in brands that stepped up to support during the pandemic and on several occasions since then. 

Brands are much more than just entities that sell products – they’re a way for people to express their identities. In the US, we’re seeing record numbers of consumers who say that brands reflect their values and that they have a connection with their favorite brands. 

It’s safe to say that brand trust is an incredibly valuable currency. In a world where consumers value things past the price tag, brands need to prioritize creating high-quality and reliable products or services.

Seeing the whole picture

CCIs are fine if you want to get a quick snapshot of how consumers are feeling, but they barely scratch the surface when it comes to telling the complete story. 

Feelings toward the economy and personal finances are very different metrics, and each generation’s economic outlook is influenced by different sources. 

In today’s era of high inflation, people are looking beyond the price tag and are seeking out brands that are consistently reliable and offer value. As consumers shift their focus, the brands that connect on a deeper level will be the ones to build more trust and consumer confidence in the long-run.