Italy: Reaching the Consumers

Consumer Profile

Italy has a population of 58.98 million, of which 48.7% are men and 51.3% are women (Istat, 2022). In terms of age structure, 12.7% of the population is between 0 and 14 years old, 63.5% between 15 and 64 and 23.8% are 65 or older; with the median age being 46.2 years (the highest European level). The Italian population is ageing and the birth rate has been worsening in recent years (7 out of 1,000 inhabitants in 2021, from 7.8 in 2016 and 9.6 ten years ago). The number of households is increasing but their size is decreasing: in 2021 around one-third of households are made up of one person (33.2%), 27.7% are made of 2 persons, 18.9% of three, 15.2% of four and only 5.1% of five or more people (Istat). Around 28.3% of the population lives in rural areas, while 71.7% are urban dwellers; with the regions of Lombardia, Lazio and Campania being the most numerous (Data Reportal, 2022).
The number of people attending university has been decreasing in recent years (-10.6% in 2017 compared to 2009, latest data available by Istat). Furthermore, according to data by Eurostat, in 2020 only 20.1% of the Italian population between 25 and 64 years old has attained tertiary education (the second-lower level in Europe, after Romania). In Italy, 63% of adults aged 25-64 have completed upper secondary education (OECD).
The latest data by Istat concerning the first quarter of 2022 show that out of a total of 22.95 million working people, nearly 4.97 million are independent workers, while 17.98 million are employees (of which 14.86 million have permanent contracts and 3.12 million have limited-term contracts). Italy is also the country in Europe with one of the highest number of freelance workers (21,64% of total employment in 2022, Istat).

Purchasing Power

In Italy, GDP per capita stood at USD 45,936 in 2021 (World Bank). According to data by Istat, in 2020 GDP per capita (at current prices) was 34,135.9 euros in the North-west area, 32,962.3 euros in the North-east and 30,372.2 euros in the Centre, while in the South and Islands area per capita GDP - at 18,501.2 euros - was 45% lower than in the Centre-North area, showing the territorial inequalities of the country. The dynamism in terms of employment and wages in the northern regions contributed to the territorial gap. The average gross household disposable income grew by 2,6% in 2021 compared to 2020, and amounted to USD 33,865 per capita (OECD). In Italy there is a considerable gap between the richest and poorest, with the top 20% of the population earning close to six times as much as the bottom 20%. According to data by the World Bank, the GINI index for Italy stands at 35.2 (100 representing the highest level of inequality, 0 the lowest). According to the latest data available by Istat, in 2021 a little more than 1.9 million households (7.5% of the total from 7.7% in 2020) and about 5.6 million individuals (9.4% as last year) were in absolute poverty. In 2021, households consumption expenditure growth at 1.4% (Istat). The OECD estimates Italy’s purchasing power parity at EUR 0.65 per USD in 2021 (compared to EUR 0.66 in 2020).
Seniors have the highest median standard of living, while young people have the lowest median standard of living. Households whose main income earner is self-employed have the highest net income (EUR 42,340), followed by employee (EUR 37,158), and retired (EUR 30,344) (Istat, latest data available). Figures from Eurostat show that on average in Italy women earn 5.5% less than men (better than the EU average, where the gender pay gap is of 14.4% according to the latest data by Eurostat).

Consumer Behaviour

Italy’s population has a high and diversified level of mass consumption (defined as the very high average level of consumption whereby most of the people consume a large amount of goods and services other than satisfaction of basic needs). However, since the financial crisis and the Covid-19 pandemic, the majority of Italian consumers have re-organized their shopping habits in order to meet economic constraints. According to the latest data by Istat, consumer confidence has been decreasing in the first half of 2022, mainly due to the uncertain economic situation, the war in Ukraine and rising inflation (Istat, June 2022). Italian consumers are demanding of quality products, they will therefore be more concerned about the quality of goods and of customer service than about promotions. When given the choice, Italians prefer products ‘made in Italy’, however foreign products are also in vogue (especially for footwear and streetwear). Novelty is welcomed, especially in the fashion sector. Most consumers purchase from mass retailers and large companies, especially in bigger cities. The ageing population (Italy is projected to have a median age of almost 50 years by 2030) drives an increasing demand for specialist products and services.

Italians are increasingly attracted by online sales, e-commerce and m-commerce (this practice also applies to the purchase of food products, through the development of drive and home delivery services in major cities). According to Netcomm, the Italian Electronic Commerce Consortium, 33.3 million Italians have bought a good or service online in the last three months and have made an average of 1.3 purchases per month in the first quarter of 2022. The number of online purchases is growing steadily and has exceeded 100 millions of transactions per quarter in 2020. Most of the consumers are multichannel, meaning they buy both from normal shops and online, while around a third use the internet only to gather information about products that they then buy in standard channels. More than half of e-shoppers makes at least one online purchase every month.

Italians have historically been considered brand loyal, however this trend has been changing in recent years, with consumers being more interested in trying new products/brands (43% according to a survey by Nielsen, while 45% declare to be open to change their favourite outlet in case of interesting promotions from new outlets).
Italian consumers often rely on the information provided on the internet and on social networks, especially those coming from other consumers (comments, reviews, etc.). Italy is the EU country with the highest share of influencers per population (2.22%). In a recent study conducted by Buzzoole (2021), 85% of consumers
interviewed claim to take the opinions of influencers into consideration when buying a product (European Parliament). Concerning big data, Italian consumers do not have a clear perception of which data are collected, stored and transferred and for which use.
A growing preference for sustainable, locally-produced products and organic foods has been recorded in recent years. In fact, 85% of consumers thinks that sustainable products have a better quality and are more innovative. In a study conducted by Bord Bia (H1 2021), 90% of Italian consumers claimed to have made an effort to buy products with higher welfare standards in the last 12 months, and more than half said sustainability is very important when choosing food and drink.
Use of collaborative platforms such as Airbnb, Uber, Blablacar, car sharing services is increasing, especially among young people.

Consumer Recourse to Credit

Italy’s consumer credit data was reported at EUR 124.3 billion in June 2018. Overall, Italy has a low private debt-to-GDP ratio, estimated at 41.3% of GDP in 2017 by the IMF. According to data from the Bank of Italy, Italian households remain financially sound, with a level of wealth considered high by international standards and one of the lowest degree of indebtedness in the euro area. Furthermore, debts are concentrated among households that are better able to repay them. In general, debt repayment capacity is boosted by the growth in disposable income and by low interest rates. The overall default rate was estimated at 1.9% in March 2018 (composed by 2.7% for consumer loans and 1.5% for mortgages), according to data by CRIF.
Mortgage loans continue to grow at a moderate pace, with the demand for new mortgages being fuelled by low property prices and favourable supply conditions. Consumer loans are increasing at a swift pace, especially in personal loans (+2.7% in the first quarter of 2018) and loans secured by a pledge of one-fifth of a salary (+6.5%). The growth in consumer credit is closely linked to the trend in durable goods purchases, hence the level of recourse to credit can fluctuate according to the level of sales of durable goods (for example, loans to buy cars and motorbikes have recorded an increase in double figures in 2017, but in the first quarter of 2018 the rise was limited to 5.2%).

Growing Sectors

Food and beverage, tourism, luxury goods and fashion, pharmaceuticals, healthcare, textiles, shoemaking industry, transport.

Consumers Associations

List on the website of the Ministry for Economic Development
Codacons
The Italian Association of Consumers and Users (ACU)
The Italian Association for the Defence and Rights of the Consumer (ADOC)
The National Union of Consumers (UNC)
ADICONSUM
Assoconsum

Population in Figures

Total Population:

58,856,847

Urban Population:

71.7%

Rural Population:

28.3%

Density of Population:

200 Inhab./km²

Men (in %)

48.6%

Women (in %)

51.2%

Natural increase:

-0.43%

Medium Age:

42.0

Ethnic Origins:

According to the Italian National Institute of Statistics (ISTAT), the majority of the population is of Italian ethnic origin (around 93%). Of the remaining 7%, many are of Romanian, North African, Albanian or Chinese origin.

Population of main metropolitan areas

Source: Citypopulation.de, Latest available data.

Age of the Population

Source: World Bank, Latest data available.

Consumption Expenditure

Media in Which to Advertise

Television

Advertising on television is expensive but effective.The Italian advertising market was worth EUR 7.8 billion in 2016. Half of the investments went to TV (+5.4% compared to 2015). Over half of the TV ad-spend (56%) in 2016 were directed to commercial broadcaster Mediaset, while 21% went to public broadcaster RAI. Sky Italia was third with a 13% market share, followed by Discovery Italia (6%) and La7-Cairo Communication (4%) (data by ConnectAlliance).

Main Televisions
RAI
Mediaset
Sky
La Sette

Press

Advertising in newspapers or magazines is a substantial but effective investment. In Italy, newspaper readership remains low compared to most of EU countries. There are about 150 paid daily newspapers, both national and local/regional. The Italian print newspaper market can be divided into four main segments: paid-for national dailies; paid-for local and regional dailies; free dailies distributed in some cities; magazines. Publishing trusts own the most important newspapers. The written press market has been particularly impacted by the overall decrease of advertising revenues in recent years. The sector held a 15% market share in 2016.

Mail

Used mainly for supermarket and technology outlets promotional campaigns.

In Transportation Venues

In large cities on public transport, trucks, posters, flyers and videos.

Market Leaders:
Havas Media

Radio

Around 2,500 commercial radio stations broadcast in Italy. Some have national coverage and the majority of them are music-based. The public broadcaster Rai has several networks. Radio advertising is very effective but limited to housewives, workers who use the car as transport, and young people especially in the morning or the evening. Ad spending devoted to radio rose 2.3% to EUR 384.6 million.

Main Radios
All public radio stations
Radio Capital
RDS

Web

Digital advertising saw ad investment dip of 2.3% to EUR 457.8 million (excluding search and social spending). Internet advertising is now the second channel of advertisement in Italy with 30% of shares in 2016 (29% in 2015). Online advertising is forecasted to still increase by 10% in 2017 (ConnectAlliance). The display advertising sector grew by 11% in 2016, reaching a 58% share with investments slightly above EUR 1.4 billion. In the same year, the SEO sector was worth EUR 730 million, growing by 4% compared to the previous year. Facebook is the most popular social media platform.

Market Leaders:
AQuest
Alkemy Digital Enabler
Bitmama

Main Advertising Agencies

Grey Advertising Italy

Main Principles of Advertising Regulations

Beverages/Alcohol

Advertising alcohol is allowed but not during time slots meant for children. Alcohol advertisement should never be addressed to under 18s. No alcohol advertisement should mention any therapeutical use of alcoholic beverages (i.e. digestive, etc.). All advertisements have to include a "drink responsibly" invitation.

Cigarettes

Tobacco advertising and sponsorship of events is banned. The EU Tobacco Advertising Directive bans tobacco advertising in printed media, radio, and internet as well as the sponsorship of cross-border events or activities. Tobacco advertising on television has been banned in the EU since the early 1990s and is governed by the Audiovisual Media Services Directive.  A 2016 revision to the legislation includes the requirement for bigger, double-sided health pictorial warnings on cigarette packages and possibility for plain packaging along with health warnings, tracking systems. However, the definition of “tobacco advertising” does not clearly cover all promotional activity and, therefore, some tobacco promotion may be allowed. Although sponsorship by the tobacco industry is not completely prohibited, publicity of the sponsorship is prohibited. For more information see the Tobacco Control Laws page for Italy.

Pharmaceuticals/Drugs

The advertising of medicinal products for human use is regulated by Council Directive 2001/83/EC, as amended by Directive 2004/27/EC. Generally speaking, the advertising of medicinal products is forbidden if market authorization has not yet been granted or if the product in question is a prescription drug. Mentioning therapeutic indications where self-medication is not suitable is not permitted, nor is the distribution of free samples to the general public. The text of the advertisement should be compatible with the characteristics listed on the product label, and should encourage rational use of the product. The advertising of medicinal products destined for professionals should contain essential characteristics of the product as well as its classification. Inducements to prescribe or supply a particular medicinal product are prohibited and the supply of free samples is restricted. For more information visit the website of the European Commission.

Other Rules

Comparative and misleading advertisement regulation in Italy is the same as that of the EU. For more information see the EU Directive about Unfair Commercial Practices and the EU Audiovisual and Media Services.

Use of Foreign Languages in Advertisement

The use of foreign languages is allowed.

Organizations Regulating Advertising

The Italian Government
The European Parliament