Brands across the world nowadays are dealing with technological development and global cultural transformation. That’s why it’s more important than ever to have your finger on the pulse of the consumer. The future of consumer behavior is also pivoting at an unprecedented rate, and as we already stepped into 2024, brands need to possess a comprehensive understanding of the trends driving these changes.
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The major elements affecting consumer behavior worldwide include global socio-economic shifts, technology improvements, and a general reassessment of values and priorities following the pandemic. As a result of these factors influencing consumers and their buying behaviors, trends like digital shopping, ethical consumerism, hyper-personalization, and social commerce are gaining massive popularity. Here are some stats that indicate modern consumer behavior —
- 70% of consumers are willing to pay a premium price for products that are sourced ethically or produced sustainably.
- 41% of shoppers only buy from brands they know and trust.
- 66% of consumers expect brands to understand their needs and preferences and create customer experience journeys accordingly.
- Social commerce sales are predicted to reach nearly $3 trillion by 2026.
This blog will highlight six important consumer trends driving the future of consumer behavior in 2024. Let’s get started!
6 Trends Driving Consumer Behavior in 2024
Omnichannel Retail Experience
Consumers today want flexibility in how they shop; in short, they want to purchase their products wherever and however they please. This has led to the soaring popularity of the omnichannel retail experience, also referred to as “phygital” shopping. Research indicates that more than 60% of consumers participate in omnichannel shopping.
Consumers today want a smooth combination of online and offline experiences. The omnichannel retail experience offers a comprehensive and linked experience across several platforms, going beyond traditional retail limits. In response, retail innovators are creating experiences that combine the tangible feel of in-store browsing with the convenience of online shopping.
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For instance, makeup brands like Sephora have launched interactive virtual try-on applications that let customers experiment and play with goods in a semi-virtual environment. This combines the ease of online buying with the in-store experience to provide customers with the best of both worlds.
Customers benefit from a seamless and integrated purchasing experience, which increases brand loyalty and improves convenience.
AR and VR in Digital Buying
As the boundaries between the physical and digital worlds become increasingly blurred, a new era of digital and augmented experiences is emerging fast. Innovations in AR (Augmented Reality), VR (Virtual Reality), and AI (Artificial Intelligence) are not only driving technological advancements but are also shaping the future of consumer behavior. These innovations are changing how people engage with their surroundings. In fact, AR and VR technologies are poised to deliver a $1.4 trillion boost to the global economy by 2030.
By enabling consumers to see and interact with things in a virtual setting, these immersive technologies provide an unmatched degree of engagement. Augmented reality (AR) adds digital overlays to real-world environments, thus allowing customers to “try before they buy” in the comfort of their own homes. Conversely, virtual reality (VR) takes consumers to fully simulated environments, offering a realistic and engaging purchasing experience.
AR and VR in digital buying are, therefore, not only closing the gap between the physical and digital worlds but also resolving the uncertainty related to online purchases. This trend is also impacting other sectors. For example, digital and augmented experiences are revolutionizing content consumption in the media industry, like in BlackMirror: Bandersnatch, where viewers can choose their own dystopian horror adventure.
The telecommunications industry is also not far behind, launching more immersive and interactive digital content experiences supported by 5G technology. AR and VR technologies can be key to brands capturing the hearts and, consequently, the business of more consumers in this digital era.
Sustainable Shopping
Brands must adapt to the growing popularity of thrifting and second-hand shopping. Sustainability is a new favorite of consumers, and it involves more than just putting a “reduce, reuse, recycle” tag on a product.
Moreover, the consumer demographic is shifting to Gen-Z buyers, who are generally more aware of sustainability issues and want only to support environmentally conscious businesses with their money. In fact, 36% of Gen-Zers value sustainability more in their second-hand shopping efforts.
In light of this, some brands, like Levi’s, revitalize their lightly worn merchandise by designating certain sections of their websites for resale.
It makes it reasonable that brands would want to bring their previous products back to life, especially because buying clothes used is becoming a more common practice. Companies like H&M are going a step further to create entire apparel lines, like the Conscious Collection, dedicated to sustainability.
The brands that successfully manage this transition and genuinely integrate ethics and sustainability into their core business practices will probably become industry leaders in the new consumer environment that will exist in 2024 and beyond.
Segmentation and Personalization
Customers want relevant and customized content in today’s information-rich environment. Studies show that companies can generate 40% more revenue by providing customers with a personalized brand experience.
Segmentation, an essential aspect of understanding and catering to the future of consumer behavior, involves grouping customers by demographics or shopping habits. This approach helps companies send tailored messaging to specific audiences. Customization extends to the individual level through personalization, where algorithms and data analysis create unique and targeted experiences for each consumer.
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Enabling real user monitoring on your e-commerce portal can help you study the buying patterns of your users and help you group these individuals into one category.
For instance, Gen-Zers spend most of their time on Instagram and TikTok, while millennials are more prone to browse for product recommendations on YouTube and Facebook, as evidenced by HubSpot’s State of Consumer Trends Report 2023.
For making segmentation work for a global audience, you must also keep localization, translation, and cultural norms in mind. The more accurately you segment your consumers, the more personalization you can imbue into their brand experiences. This, in turn, will enhance their shopping experience, increase customer satisfaction, and boost customer loyalty.
Social Commerce
Research indicates that nearly 331 million users worldwide will turn to social media by 2028 as a virtual haven. The burgeoning increase in these figures is driving an increasing scope for amalgamation between social media and commerce, with social media significantly influencing the future of consumer behavior.
This social media trend is making seamless purchasing experiences possible by leveraging the engaging and community-driven nature of social networks. Customers can now find, investigate, and buy things straight from social media apps, blurring the lines between socializing and purchasing.
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It’s not just convenient but also allows users to remain engaged on their preferred apps for longer periods without needing to switch focus. Social commerce features on platforms like live stream videos, product catalogs, shoppable videos, and Instagram checkouts are shaping the future of consumer behavior.
Social media platforms have also become vital avenues for connecting with and interacting with consumers. Owing to this, trends like social listening and influencer marketing are rising. Studies show that more than 35% of marketers find influencer marketing a very effective strategy, likely to generate better ROI than other marketing efforts.
In leveraging the authenticity and trust that consumers place in influencers, brands are increasingly dedicating substantial portions of their marketing budgets to these social media initiatives. Thus, the future of consumer behavior in online retail is being shaped by the convergence of social connection and commerce, which is expected to result in a more personalized, social, and interactive purchasing experience in the years to come.
Privacy and Security
Concerns about security and privacy have become more pressing for consumers, customers are expecting more from businesses regarding strict security procedures and strong privacy policies. In fact, 23% of US Internet users do not want to share their personal information online, no matter what benefits they receive.
As technology develops, customers choose services and products that prioritize data protection and closely examine businesses’ privacy policies. This gives businesses a unique opportunity to win over customer trust and loyalty by investing in strong cybersecurity defenses and open transparency about data usage.
The trend towards ensuring greater privacy and security is influencing not just the e-commerce sector but also industries such as finance and technology. Customer concerns over the security of their financial information are growing due to the increase in online transactions. Studies show that 26% of consumers consider it an important trust factor that the financial services provider proactively communicates that their personal information would be secure with them.
Furthermore, data privacy issues are at the forefront for technology companies, thus inciting them to continuously evolve to offer solutions that guarantee the confidentiality and integrity of data. The emergence of privacy-focused technologies like blockchain and sophisticated encryption techniques demonstrates this trend.
Pre and Post-Covid Consumer Behavior Changes
The Impact of COVID-19 on Consumer Perceptions
The Covid-19 pandemic was a turning point for the world as we knew it. The virus redefined how every industry operated before, ending certain long-standing norms and accelerating underlying trends on steroids.
Based on the 2020 Consumer Research Report from Accenture, COVID-19 brought out deep concern and fear among consumers about the economic impact of the pandemic, even more so than their own health. In fact, studies show that 88% of consumers were worried about the impact on the economy, while only 64% were concerned about their personal health or job security.
Categorizing Consumers in the Immediate Post-Covid Era
Consumers in the immediate post-Covid era could be segregated into five categories—the Worrier, the Individualist, the Rationalist, the Activist, and the Indifferent. This segregation proved essential for CPG companies who used this information to target separate audience segments with personalized marketing strategies.
For instance, the consumption of personal hygiene products increased drastically; however, the Worriers bought 50% more products than the Indifferent, who just increased their purchases by 10.4%. As the pandemic progressed, consumer attitudes changed, with the proportion of Warriors decreasing in areas where the outbreak stabilized.
Emergence of New Shopping Habits
The pandemic pushed new shopping habits to the forefront, such as an ever-increasing focus on health, increased conscious consumption, and a growing love for local shopping. CPG brands had to cater to these trends quickly. Many companies developed a “health strategy” as they saw it as a huge potential market differentiator. They also tried to bring out new ethical, sustainable, and environmentally friendly business models and connect with their customers in locally relevant ways.
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Moreover, many consumer shopping habits have changed permanently, with a focus on supporting and monetizing content creators on sites like Patreon or apps like TikTok, or with limiting food waste and shopping more health-consciously topping the trends. In fact, 54% of consumers wanted to make more sustainable choices in shopping, while 49% were shown to make more cost-conscious choices.
Furthermore, digital commerce also saw a major boost post-outbreak, with consumers concurring that the proportion of instances of online shopping would increase from 32% to 37%, and this trend is expected to continue post-outbreak.
Final Thoughts
In conclusion, consumers are in the driver’s seat of any business transaction, and brands that want to get ahead of the curve and establish market dominance need to ensure that they are catering to the needs and preferences of their target consumer base.
This is where trends like artificial intelligence, sustainability, social media, and data governance come in. By strategizing to support these changing trends, businesses may remain relevant and thriving despite the ongoing economic instability and inflation.
About the author: Aryan Jalan, a professional SEO consultant boasting five years of expertise, is dedicated to driving marketing success for businesses. An avid learner, he blends work with leisure, exploring books and new destinations.