Global market trends and consumer expectations with The Economist’s Barsali Bhattacharyya

Global market trends and consumer expectations with the Economist’s Barsali Bhattacharyya

Joe Kornik: Welcome to the VISION by Protiviti Interview. I’m Joe Kornik, Editor-in-Chief of VISION by Protiviti, our global content resource examining big themes that will impact the C-suite and executive boardrooms worldwide. Today, we’re exploring the customer experience. I’m thrilled to be joined by Barsali Bhattacharyya, Deputy Director for The Economist Intelligence Unit and Global Lead for the Consumer and Retail Sectors. Barsali is one of the Economist’s leading voices on geopolitical and macroeconomic trends, and how they will impact consumers and businesses. Today, she’ll be speaking with my colleagued Bryan Comite, Managing Director and Leader of Customer Experience Strategy for Protiviti Digital. Bryan, I’ll turn it over to you to begin.

Bryan Comite: Thanks very much, Joe. Barsali, thank you so much for joining us today.

Barsali Bhattacharyya: Thank you very much for having me. I’m glad to be here.

Comite: I’m very much looking forward to the conversation. Maybe we’ll start with a first question about, based on the current economic situation, how are things looking for consumers in 2025?

Bhattacharyya: Thank you. That’s a really good question. I’m going to answer that by taking a step back and going back to 2024. At The Economist Intelligence Unit, at The EIU, we have a practice where every year, in the second half of the year, we analyze the outlook for the coming year for countries and industries that we cover. So last year, in 2024, when we conducted this exercise, our 2025 forecast for retail sales and consumer spending appeared broadly positive. The US had experienced quite a strong growth in 2024 and we anticipated some of that momentum to continue into 2025. 

On the other hand, in Europe, we expected a recovery after a slow 2024. In fact, China was the only region where the outlook for 2025 seems somewhat sluggish. Now, we did, however, at the time identify a potential change of administration in the US as a key risk for this outlook. About six–seven months later, I think those risks have materialized with US President Trump announcing some sweeping policy changes, which primarily marked by tariffs against key US trading partners, and that has led to create a certain level of uncertainty while we wait and watch about how things are going to unfold.

Comite: So, if you think about that then, looking beyond the US, how will other markets be affected by these events?

Bhattacharyya: Given the state of uncertainties, one way of thinking about which other economies are going to be affected and to what extent, is looking at which other countries that are quite export-dependent and, in particular, which have high level of trade dependency with the US, so who export a lot to the US, because they will obviously be quite affected by the tariffs. Again, I think Asia stands out in that regard. It’s been, over the past couple of years with some slowdown in the western market, Asia has broadly, for many global consumer companies, been a standout market which has offered a lot of opportunities. There’s a whole bunch of reasons there, emerging middle class, and most notably a lot of economic growth over the past few years in Asia, which has, interestingly, mostly been driven by growth in the manufacturing sector. So, if you look at countries like China, Vietnam, even actually Japan, which are quite sizable manufacturing sectors, so these are some of the countries that are going to be affected. 

Looking across the rest of Asia, India, of course, stands out as another economy where there’s already been a lot of momentum about increasing consumer base, a lot of middle-income consumers who are looking to spend, looking to have a better lifestyle, looking to travel. Lots of opportunities there. Again, so far in comparison to many of its Asian peers, India is slightly better positioned with the trade war. It’s one of the countries that might benefit from the China Plus One strategy that a lot of businesses already have in place. Those would be some of the markets to look forward to.

The Middle East as a region is also — you know, countries like Saudi Arabia and the UAE which are big and rapidly developing consumer markets — I think those also offer a lot of opportunities. With Europe, again, the picture is going to be quite mixed, where a lot of tourism-dependent economies might be doing better than export-dependent economies like Germany.

Comite: Thank you so much for that detail and perspective. It’s very interesting to see how the regions are responding and reacting and what some of those outlooks look like. I’d love to shift gears a little bit with you. With that in context, what are the kinds of experiences that consumers are most valuing right now?

Bhattacharyya: There’s going to be a lot of caution among consumers, but we think there will be people looking to treat themselves. The consumers are going to look for opportunities to treat themselves from time to time. I think those are the kinds of opportunities businesses probably need to look for and make the most of. Again, the basics — if you think at what consumers are going to be spending on — the basics are probably going to be fine. They have to spend on essentials, but they are going to be looking for more value. I think that’s probably something for businesses to keep in mind that, sure, prices are probably going to go up for some products, but how do they stand apart from other competitors? There’s going to be probably price wars among businesses as they try to retain their consumer bases. How can they position themselves differently from their competitors and make sure that consumers see value in them?

Comite: Barsali, do you also see, based on the connection back to the conversation around the macroeconomic drivers, that there will be regional differences or trends in the behaviors of the consumers that you’re seeing based on your research?

Bhattacharyya: Yes. I think that’s right. Again, looking at what’s happening around the world, we are probably heading towards a situation where goods might be priced very differently across markets. Companies are probably going to adopt different pricing strategies. That means that the economic impacts to consumers are going to different. The price raises, inflation trends that they see are going to be quite different. I think there’s also going to be factors to watch around tourism where we are going to see a lot of spending. Again, there would be variations in regional trends that we see. For example, we have already seen a slowdown — we are starting to see a slowdown in incoming — in tourist arrivals to the US in response to geopolitical events. Since the pandemic, we have seen an increase in tourist arrivals in the Middle East, in countries like UAE. Again, those kinds of trends are going to continue.

Comite: Absolutely, Barsali. Super helpful to think about all of these interconnected drivers that are impacting the customer experiences. I’d love to get your perspective on the role of emerging technologies. Artificial intelligence or AI in these emerging technologies and the pace of change. How do you see that impacting the customer experience over the next two to three years?

Bhattacharyya: Right. That’s a very important question, and I think especially relevant for the consumer and retail sector, because these companies have been quite at the forefront of using new technologies. For quite a while, we have seen consumer and retail businesses using AI and ML technologies at the backend, in their supply chains, and ensuring that they have more efficient supply chains. They have been using it to manage the inventories, for generating consumer analytics and insights. There’s a lot of use in the back office. So for consumer analysis, for predictive analytics. Online shopping, obviously, has been using it for predictive analysis for quite some time. 

I think what’s really interesting is that, with the rise of generative AI technologies over the past few years, a lot of the use cases probably shifted away from the back office towards more consumer=facing experiences and more consumer-facing use cases. So, I think that probably the biggest use case of generative AI is in marketing and advertising. So, very much what consumers are seeing, what they are reading and viewing to make their purchasing decisions. 

One other use case that really stands out is personalization. Again, lots of opportunities there for businesses, especially digital retail businesses, when they are trying to offer more curated, a more personalized, a better, more convenient customer experience. I think there are a couple of really emerging use cases that we are seeing where companies are, if you look across industry surveys, companies say that they are beginning to invest a lot in customer analysis and segmentation and in digital assistance and profilers. I think those are two areas where there’s a lot of trial, a lot of initial implementation that’s happening across retail and consumer businesses.

Comite: Let’s look out a little further. Let’s think about 2030. Any bold predictions about where the evolution of expectations around customer experience are going? Any ideas about where this is headed?

Bhattacharyya: I think given the uncertainties we are living amidst, it’s quite difficult to be thinking even one year ahead. If you think about what consumers would expect, there are probably two things. One is probably a little less surprising than the other. So, the less surprising thing is that if businesses are using so many new technologies, and we know one of the concerns around AI technologies has been around data privacy and accuracy and hallucinations, I think consumers would expect a lot more progress at those ends. They would expect businesses to be really transparent about what’s happening with their data, how they’re using their data. They would also expect a certain level of accuracy in how businesses are using these technologies. So, if I have a shopping assistant suggesting me what kind of TV I should be buying, I would expect that to be absolutely accurate data. I would expect that to be something I can trust and I don’t have to double check that. Again, transparency and accuracy would be something that consumers are going to be expecting. 

I think one surprising thing might be the human element, right? While we are using a lot — businesses might be using a lot of technologies, it’s probably going to be important to make sure that there is a level of human overview on things. So, if a lot of my shopping experience is done by – through automated processes, through bots and virtual assistants, if something goes wrong as a consumer, I might be expecting a quick redress. It might be that businesses that manage to correctly use a merged human overview with the use of new — adoption of new technologies are standout as the winners. If something goes wrong, the ability — the ease with, and the speed at which, a consumer is able to find a solution, or maybe speak to a human at the company end might become quite important.

Comite: Barsali, thank you so much for taking the time to share your experience, your expertise looking at the markets, both in the US, globally, and thinking about the future of customer experience. I just want to say thank you again for all of those insights.

Bhattacharyya: Thanks, Bryan. It has been a pleasure talking to you.

Comite: Joe, I’m going to turn it back to you.

Kornik: Thanks, Bryan. Thanks, Barsali. Thank you for watching the VISION by Protiviti interview. On behalf of Bryan and Barsali, I’m Joe Kornik. We’ll see you next time.