market research on consumer trends

The State of Consumer Trends in 2023 [Data from 600+ Consumers]

Discover the latest consumer trends, preferences, and behaviors impacting marketers and the wider business in 2023 and beyond.

STATE OF CONSUMER TRENDS REPORT

Learn about the latest trends, purchasing behaviors, and most popular social channels across 5 generations.

Updated: 08/08/23

Published: 08/08/23

From the rise of AI to the growing popularity of shopping on social media, heightened data privacy concerns, and consumers tightening budgets due to recession fears, times are changing fast. 

To help marketers keep up and stay ahead of the curve, we've run our biannual Consumer Trends Survey of 600+ US adults, to keep a pulse on:

• What trends they're following.
• How they spend their time online.
• How and where they prefer to shop.
• What standards they're holding their favorite brands to.

Online & Social Trends

Workplace & Budget Trends

Privacy & Brand Perceptions

Ongoing Trends & Shifts

Top Consumer Trends of 2023 [Summer Update]

Digital and online trends, 1. consumers don’t trust ai, but one-third still use it..

AI is hands down the top trend of 2023, with one in three consumers already using chatbots and platforms like ChatGPT. 

But here's the plot twist – only 26% of consumers actually trust content created with AI. 

As businesses leverage AI, building trust and maintaining transparency are key to fostering consumer confidence in AI-driven experiences.

Regardless, 40% of full-time employees use AI at work, and 75% of them say it's effective. The top use cases for AI chatbots at work revolve around assisting people in their work rather than doing their job for them — helping with tasks like getting ideas or inspiration, summarizing text, and learning new things.

These are also among the most effective uses for AI in the workplace, with workers saying AI is most effective for analyzing and reporting data, learning new things, creating images/videos, getting ideas and inspiration, and conducting research. 

Lastly, we asked consumers which AI they plan on using in the future. 

Despite ChatGPT’s head start, over half of consumers see themselves primarily using Google Bard once it's publicly available — followed by ChatGPT — with Bing in third place. 

2. Social media is the future of shopping.

Social media is quickly becoming the future of e-commerce, with social shopping growing in popularity across all age groups. Influencers are impacting more purchase decisions, while customers increasingly sliding into DMs for customer service.

Just in the past three months, 41% of consumers have discovered a product on social media. 

In fact, Gen Z, Millennials, and Gen X prefer finding products on social media over any other channel.

When it comes to actually purchasing these products. 17% of social media users have bought something directly on a social media platform in the past three months, rising to 22% of Gen Z and 27% of Millennials since our January update.

On top of that, 24% of social media users have bought a product based on an influencer’s recommendation in the past three months, a 33% increase from when we ran this survey last year. 

For Gen Z, 40% have bought a product thanks to an influencer in the past three months, and ( similarly to our January update ) they say recommendations from influencers are more impactful to their purchase decisions than recommendations from their friends or family.

19% of social media users have also sent DMs to get customer service in the past 3 months, up 45% from last year. Not only that, but 1 in 5 Gen Z, Millennials, and Gen X say DMs is how they prefer to get customer service from a company.

In past Consumer Trends pulse surveys, we continued to see that consumers don’t fully trust social shopping .

Today, they seem to be coming around. While just 47% of social media users feel comfortable buying through social apps and only 42% trust social media platforms with their card information, both of these are improvements over last year's numbers. 

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U.S. Consumer Trends Report

Learn how consumers act, how they think, and what they expect now and beyond. Topics include:

• Purchase habits.
• Data privacy.
• Workplace trends.

You're all set!

Click this link to access this resource at any time.

3. Younger social platforms gain steam as legacy apps stall.

Despite being the most used social media platforms, Facebook, YouTube, and Instagram saw the least growth in users in our survey group year-over-year. 

Facebook usage remained flat, Instagram usage dropped by 5%, and YouTube usage dropped by 2%. Meanwhile, BeReal grew 333%, Twitch grew (43%), and TikTok grew (21%). 

(Note: We ran this survey just before Threads launched and expect it to be a big discussion point in our next bi-annual survey.)

Still, Facebook is the most popular social media app , used by 68% of consumers, followed by YouTube (61%), Instagram (40%), TikTok (34%), and Twitter (30%).

Although LinkedIn is towards the bottom of the list, B2B marketers shouldn't panic or count it out. Although it saw a slight decrease in users year over year, the usage on this platform can vary (and even might be seasonal in response to how workplaces hire or promote). For example, in our January 2023 update, we saw that LinkedIn had 20% more consumers who reported active usage.

Overall, this data aligns pretty closely with data we’ve seen from App Stores, platform analytics firms, and reports directly from the respective platforms.

4. Social search and generative AI are disrupting traditional search engines.

While there’s no denying search engines are still dominant, social search is growing in popularity, especially among Gen Z, Millennials, and Gen X.

Not only do 31% of consumers turn to social media to search for answers to their questions, but one-fourth of 18 to 54-year-olds prefer to search on social media over search engines. 

Another thing going for social search is the fact that 54% of consumers use their phones over any other device when looking something up on a search engine — jumping to 80% for Gen Z since our last survey.

But between search engines, social search, and AI, consumers still say search engines are the most effective way to get their questions answered. 

Ultimately, while social search and generative AI becoming more popular, traditional search isn’t going anywhere just yet.

Workplace & Budgeting Trends

5. flexible workplaces are more vital than ever for retention..

The past few years have seen dramatic shifts in how we work, with hybrid and remote work becoming more common while being in the office full-time fell out of favor.

Just 32% of full-time employees surveyed are in the office all week, down from 40% a year ago. 

Meanwhile, both fully remote work and hybrid work became more common, with 34% of workers saying they’re hybrid and another 34% saying they work remotely.

Not only that, but hybrid is the most popular work model (preferred by 41% of employees), followed by remote (32%), with in-person coming last (27%). 

What's more, remote and hybrid employees aren’t interested in returning to the office full-time, with 47% saying they’d consider leaving if they had to come in five times a week. But, they’re more open to coming back than they were last year, when 54% said they’d rather quit .

The good news? Offering flexibility could result in great employee or team retention. The top reason people we surveyed want to stay in their job is to maintain their flexible work schedule, beating out competitive pay.

6. Company culture matters.

Not only do consumers need to see flexibility to stay loyal to employers, but they also need to see efforts made to build a positive and healthy company culture. 

A whopping 67% of employees say it's important that the company they work for has a diverse and inclusive culture, up 20% from last year.

And it makes sense. As more people are asked to go back to the office — even part-time, they’re more heavily putting their work experiences into perspective. After all, why would you want to return to an office associated with negativity, unnecessary stress, uninclusive siloes, or psychological safety?

If poor culture, flexible work, or other negative things like overwork, lack of upward motion, or poor recognition of good performance aren’t handled, teams may run into a trend some leaders fear — quiet quitting.

At this point, one-third of employees surveyed are actively doing it — still on par with our research from the past year.

7. Consumers are tightening recession budgets.

64% of consumers think the US is currently in a recession and 63% are tightening their budgets in response. About half (49%) of US adults have taken steps to plan or prepare for a recession.

Additionally, with 42% of consumers expect the recession to for over a year. 

8. Consumers continue to fear layoffs and recession impacts.

Although many companies will save thousands, or even millions, on reducing office space and facilities costs with hybrid and remote work, half of consumers are still rightly concerned about being laid off from their current job.

For marketers, earlier research from this year showed that their departments were already working with less resourcing, headcount, and budget than past years. As some industries are still seeing the brunt of economic trends, this has likely continued.

Many also worry that AI — the very tool that streamlines their busy work — could take over their work entirely.

At HubSpot, we think AI should be used as a tool to help employees cut out busy work and drive results, not as a means to save money by cutting staff.  And, heads of other AI platforms, like Jasper.AI , agree.

Still, it’s understandable to worry how the combination of AI and economic could do to job security. After all, most employees we’ve surveyed compare AI to a modern-day Industrial Revolution . 

If you’re concerned about your role, zone in on skills AI can’t replace -- like critical thinking . Meanwhile, use AI to give you and your team more time to earn a high-performance track record. This way, if your role does shift or dissolve, you’ll be able to pivot and adapt to change.

Privacy & Brand Perception Trends

9. data privacy concerns are at an all-time high..

A whopping 84% of consumers say data privacy is a human right.

Not only are 81% of consumers worry how companies use their personal data, but 72% say they’re more likely to buy from companies they trust with it.

So, how should marketers (or any other area of business) build that trust? 

We asked what would make consumers more comfortable sharing data with companies, and it comes down to transparency, security, and ownership. 

Consumers want to be given a choice in whether or not to share their personal data and be told exactly how their data will be used. 

Another important factor is knowing their data is stored securely and that it won’t wind up in the hands of third parties. 

Lastly, consumers want to maintain ownership of their data with the ability to remove it from your database if they so choose.

Companies have a lot of work to do to build that trust, with over half (52%) of U.S. adults saying they usually decline to have their personal data tracked. 

Just 19% usually allow their data to be tracked, while 29% say it depends on the company.

Ultimately, embracing today's privacy-first world will be positive for your brand perception -- and most importantly -- customer trust and safety. In a recent post, our CMO, Kipp Bodnar, explains why data privacy is far from just a passing fad .

10. Consumers increasingly support brands committed to diversity and inclusion.

Companies taking a stance on social issues has grown more important and influential on consumers’ purchasing decisions, with 49% of U.S. adults saying brands should do more regarding social advocacy. 

Affordable healthcare, income inequality, climate change, and racial justice are the most important issues respondents want to see companies take a stance on. 

For Gen Z specifically, racial justice, LGBTQ+ rights, and climate change are the most important issues. On top of that, 20% of Gen Z say a brand's commitment to diversity and inclusion is one of top five factors in their purchase decision.

Compared to last summer’s Consumer Trends results, respondents increasingly support brands committed to diversity and inclusion, as well as small businesses. 

42% of consumers say they’re more likely to buy a product based on the brand’s commitment to diversity and inclusion, up 17% from last year. 

Additionally, 37% chose a product based on the brand’s commitment to diversity and inclusion in the past three months, up 23% from last May.

11. More consumers support small businesses.

52% of consumers say a product being made by a small business makes them more likely to purchase, while 46% have chosen to buy a product because it was made by a small business (both up 18% from last year).

Trends Discovered in January 2023

While the list above reflects data from our most recent consumer pulse checks in mid-2023, below you'll find highlights (which still could impact marketers) from an earlier survey six months prior.

1. Consumers are investing less money into virtual worlds, items, and currencies. 

Despite the waning hype around the metaverse, attitudes haven't changed much over the past six months. Both May and January's surveys found only 8% of U.S. adults have ever visited a metaverse.

Public opinion on the metaverse has improved slightly over the past nine months. 36% of consumers now say the metaverse is the future of technology — up 6% since May . And 33% say the metaverse is an extension of reality, up 18% since May. 

However, investments in virtual currencies have seen a decline. In fact, among those who've ever visited a metaverse, only 50% reported buying cryptocurrency in January — which is a 35% decrease since May. Additionally, 60% of metaverse visitors reported buying NFTs in January 2023 ... 13% lower than May's respondents. 

The decrease in purchasing virtual currencies might have to do with today's economic landscape. If people are generally more conservative with their spending, this could trickle into the virtual atmosphere, as well. However, it's important to take note of the decrease as a potential signifier that virtual currency isn't as popular as it was in 2022. 

2. Gen X and Boomers are warming up to social media product discovery. 

In January, we found that 46% of Gen X and 24% of Boomers had discovered a new product on social media in the past three months — that's a 10% and 41% increase since May 2022, respectively. 

All of which is to say: continuing to invest in social media marketing as an opportunity for product discovery is a good idea as we near 2024. 

3. Gen Z increasingly differentiates itself from others.

One of the most fascinating things to dig into when looking at survey results were the vast differences between Gen Z and other age groups -- including their closest predecessor, Millennials. 

When taking a deeper dive into our generation-by-generation data, we found that Gen Z:

• When it comes to shopping, generations are highly influenced by price, quality, and product reviews. Gen Z especially values brands that have active communities around them.
• TikTok and Instagram are the most used social media apps among Gen Z women, while men spend much more time on YouTube.
• Gen Z is all about YouTube, Instagram, and TikTok. Not only for social networking and entertainment but also for discovering (and buying) products.

The findings above weren't the only interesting points to call out. Our lead researcher and analyst, Maxwell Iskiev explores the differences between how all age groups shop and discover products with this follow-up guide:

How Each Generation Shops in 2023 [New Data from Our State of Consumer Trends Report]

4. some consumers are stepping into web3, but most don't even know what it is..

While some consumers, especially those in younger generations like Gen Z and millennials, are ready to throw their whole wallet into the metaverse and cryptocurrency, most are still getting their first taste of the Web3 world.

In fact, 51% of our survey participants from the May 2022 survey  say they don't even understand what Web3 even is yet.

While Web3 experts believe this technology will continue to grow in the coming years, businesses don't need to pivot their whole strategy to get ahead of it right this second.

However, as the technology gets more prominent and accessible, it's still helpful to learn about the potential opportunities and risks of the Web3 space. 

That's why Caroline Forsey interviewed a handful of Web3 experts to learn more about how it could impact how consumers use the world wide web in the future.

While Web3 might be a new concept to many, expect to hear more about it as the technology becomes more accessible to consumers and businesses in the coming years. For more expert predictions around this, hear what our CMO Kipp Bodnar and Kieran Flanagan, our SVP of Marketing, have to say about it in this episode of Marketing Against the Grain.

For more insights, check out these guides:

• How Web3 Technology Will Impact Consumer Trends [Expert Insights]
• How Businesses Could Shift in Web 3 [Executive Insights & Podcast]
• Everything Brands Need to Know About the Metaverse

6. Consumers crave video, and effective brands are taking notice.

By now, you know that video has played a powerful role in the lives of consumers. Not only do consumers stream more video than ever, but year-over-year, HubSpot researchers find that most brands consider it to be their most effective type of marketing content . 

But, not just any video will result in a conversion, purchase, or view. While you don't need a huge budget to woo your audiences, you will need to create content they'll actually enjoy, keep their attention on, and be persuaded by.

In fact, 69% of our January 2023 respondents say it is more important that a marketing video be authentic and relatable than polished with high-quality video/audio.

This video interview and post from Wistia CEO , Chris Savage goes into great detail on his tips for leveraging video to humanize your brand.

For more on how marketers are benefiting from video in 2023, also check out our 2023 Video Marketing Report .

7. Stores and online retailers aren't going away, despite the growth of social commerce.

In January 2023, 69% of consumers preferred to purchase a product in-store, while 52% preferred to purchase through an online retailer selling a variety of brands (e.g. Amazon.com).    

Take Pink Tag Boutique for example. The Kentucky-based clothing and accessories business saw immense growth on the Facebook Shops. They   attribute $44,448 in incremental sales from the tool, and have seen   66% greater average order value from social commerce buyers compared to those who bought directly from the company site.

For more examples of brands that are already excelling in social commerce, check out this post .

You can also find more shopping trend data in this follow-up report from Caroline Forsey: The Shopping Trends of 2023 & Beyond [State of Consumer Trends Data]

8. Many consumers consider themselves "creators."

When looking at our survey results for the question, "Would you consider yourself a creator?", we found that 30% of 18-24-year-olds and 40% of 25-34-year-olds call themselves content creators.

What's great for brands here? Your very own audiences might jump at the chance to create content for you, which could in turn help them build online influence.

But, what exactly IS a "creator"? Check out this deep dive by Caroline Forsey to learn more: If Everyone's a Content Creator, Is Anyone?

What's Next for Consumers, According to Trend Analysts

Now that you've read through the biggest findings of our Consumer Trends Report, you might also be asking, "What trends and themes could come in the next six months -- or beyond?"

To give you a taste of just a few trends to keep on your radar, we reached out to Julia Janks of Trends.co to learn what she and her team of trend analysts will be focusing on. Here are three of the nine trends they're keeping on their radar .

1. Gifting strategies could catch the eyes of consumers.

Forget loyalty points — gifting is the new customer retention strategy. As remote everything continues to rise, keeping connected to clients and loved ones will be key.

3. Consumers will visit pop-up shops -- in the metaverse.

Pop-up shops in the metaverse are a thing now. And, brands like Hogan are already testing them out.

We could see the metaverse shopping industry continue to grow with consumer interest, as 30% of consumers HubSpot surveyed think more brands should consider virtual stores.

For the Julia's full list of trends to watch, check out 9 Things Trends.co Analysts Will be Watching in The Next 6 Months & Beyond -- and don't forget to check out Trends.co for more business news, innovative ideas, and industry trend coverage.

Dive Deeper into Consumer Trends

In the post above, we gave just a few highlights of our State of Consumer Trends Survey, as well as our predictions for what's to come. To learn more interesting themes, check out these follow-up posts:

• The Way People Search the Web is Changing: 4 Findings to Know
• The Top Shopping Trends of 2023 [State of Consumer Trends Data]
• The Top Channels Consumers Use to Learn about Products [New Data]
• How Each Generation Shops in 2023 [State of Consumer Trends Data]
• 9 Things Our Trends Team Will be Following in the Next 6 Months & Beyond
• How Web3 Will Impact the Future of Consumer Trends [Expert Insights]

Want to see how data's changed since 2022? Click below to download the full findings of that survey in our State of Consumer Trends Report

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The past, present, and future of consumer research

• Published: 13 June 2020
• Volume 31 , pages 137–149, ( 2020 )

Cite this article

• Maayan S. Malter   ORCID: orcid.org/0000-0003-0383-7925 1 ,
• Morris B. Holbrook 1 ,
• Barbara E. Kahn 2 ,
• Jeffrey R. Parker 3 &
• Donald R. Lehmann 1  

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In this article, we document the evolution of research trends (concepts, methods, and aims) within the field of consumer behavior, from the time of its early development to the present day, as a multidisciplinary area of research within marketing. We describe current changes in retailing and real-world consumption and offer suggestions on how to use observations of consumption phenomena to generate new and interesting consumer behavior research questions. Consumption continues to change with technological advancements and shifts in consumers’ values and goals. We cannot know the exact shape of things to come, but we polled a sample of leading scholars and summarize their predictions on where the field may be headed in the next twenty years.

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1 Introduction

Beginning in the late 1950s, business schools shifted from descriptive and practitioner-focused studies to more theoretically driven and academically rigorous research (Dahl et al. 1959 ). As the field expanded from an applied form of economics to embrace theories and methodologies from psychology, sociology, anthropology, and statistics, there was an increased emphasis on understanding the thoughts, desires, and experiences of individual consumers. For academic marketing, this meant that research not only focused on the decisions and strategies of marketing managers but also on the decisions and thought processes on the other side of the market—customers.

Since then, the academic study of consumer behavior has evolved and incorporated concepts and methods, not only from marketing at large but also from related social science disciplines, and from the ever-changing landscape of real-world consumption behavior. Its position as an area of study within a larger discipline that comprises researchers from diverse theoretical backgrounds and methodological training has stirred debates over its identity. One article describes consumer behavior as a multidisciplinary subdiscipline of marketing “characterized by the study of people operating in a consumer role involving acquisition, consumption, and disposition of marketplace products, services, and experiences” (MacInnis and Folkes 2009 , p. 900).

This article reviews the evolution of the field of consumer behavior over the past half century, describes its current status, and predicts how it may evolve over the next twenty years. Our review is by no means a comprehensive history of the field (see Schumann et al. 2008 ; Rapp and Hill 2015 ; Wang et al. 2015 ; Wilkie and Moore 2003 , to name a few) but rather focuses on a few key thematic developments. Though we observe many major shifts during this period, certain questions and debates have persisted: Does consumer behavior research need to be relevant to marketing managers or is there intrinsic value from studying the consumer as a project pursued for its own sake? What counts as consumption: only consumption from traditional marketplace transactions or also consumption in a broader sense of non-marketplace interactions? Which are the most appropriate theoretical traditions and methodological tools for addressing questions in consumer behavior research?

2 A brief history of consumer research over the past sixty years—1960 to 2020

In 1969, the Association for Consumer Research was founded and a yearly conference to share marketing research specifically from the consumer’s perspective was instituted. This event marked the culmination of the growing interest in the topic by formalizing it as an area of research within marketing (consumer psychology had become a formalized branch of psychology within the APA in 1960). So, what was consumer behavior before 1969? Scanning current consumer-behavior doctoral seminar syllabi reveals few works predating 1969, with most of those coming from psychology and economics, namely Herbert Simon’s A Behavioral Model of Rational Choice (1955), Abraham Maslow’s A Theory of Human Motivation (1943), and Ernest Dichter’s Handbook of Consumer Motivations (1964). In short, research that illuminated and informed our understanding of consumer behavior prior to 1969 rarely focused on marketing-specific topics, much less consumers or consumption (Dichter’s handbook being a notable exception). Yet, these works were crucial to the rise of consumer behavior research because, in the decades after 1969, there was a shift within academic marketing to thinking about research from a behavioral or decision science perspective (Wilkie and Moore 2003 ). The following section details some ways in which this shift occurred. We draw on a framework proposed by the philosopher Larry Laudan ( 1986 ), who distinguished among three inter-related aspects of scientific inquiry—namely, concepts (the relevant ideas, theories, hypotheses, and constructs); methods (the techniques employed to test and validate these concepts); and aims (the purposes or goals that motivate the investigation).

2.1 Key concepts in the late - 1960s

During the late-1960s, we tended to view the buyer as a computer-like machine for processing information according to various formal rules that embody economic rationality to form a preference for one or another option in order to arrive at a purchase decision. This view tended to manifest itself in a couple of conspicuous ways. The first was a model of buyer behavior introduced by John Howard in 1963 in the second edition of his marketing textbook and quickly adopted by virtually every theorist working in our field—including, Howard and Sheth (of course), Engel-Kollat-&-Blackwell, Franco Nicosia, Alan Andreasen, Jim Bettman, and Joel Cohen. Howard’s great innovation—which he based on a scheme that he had found in the work of Plato (namely, the linkages among Cognition, Affect, and Conation)—took the form of a boxes-and-arrows formulation heavily influenced by the approach to organizational behavior theory that Howard (University of Pittsburgh) had picked up from Herbert Simon (Carnegie Melon University). The model represented a chain of events

where I = inputs of information (from advertising, word-of-mouth, brand features, etc.); C = cognitions (beliefs or perceptions about a brand); A = Affect (liking or preference for the brand); B = behavior (purchase of the brand); and S = satisfaction (post-purchase evaluation of the brand that feeds back onto earlier stages of the sequence, according to a learning model in which reinforced behavior tends to be repeated). This formulation lay at the heart of Howard’s work, which he updated, elaborated on, and streamlined over the remainder of his career. Importantly, it informed virtually every buyer-behavior model that blossomed forth during the last half of the twentieth century.

To represent the link between cognitions and affect, buyer-behavior researchers used various forms of the multi-attribute attitude model (MAAM), originally proposed by psychologists such as Fishbein and Rosenberg as part of what Fishbein and Ajzen ( 1975 ) called the theory of reasoned action. Under MAAM, cognitions (beliefs about brand attributes) are weighted by their importance and summed to create an explanation or prediction of affect (liking for a brand or preference for one brand versus another), which in turn determines behavior (choice of a brand or intention to purchase a brand). This took the work of economist Kelvin Lancaster (with whom Howard interacted), which assumed attitude was based on objective attributes, and extended it to include subjective ones (Lancaster 1966 ; Ratchford 1975 ). Overall, the set of concepts that prevailed in the late-1960s assumed the buyer exhibited economic rationality and acted as a computer-like information-processing machine when making purchase decisions.

2.2 Favored methods in the late-1960s

The methods favored during the late-1960s tended to be almost exclusively neo-positivistic in nature. That is, buyer-behavior research adopted the kinds of methodological rigor that we associate with the physical sciences and the hypothetico-deductive approaches advocated by the neo-positivistic philosophers of science.

Thus, the accepted approaches tended to be either experimental or survey based. For example, numerous laboratory studies tested variations of the MAAM and focused on questions about how to measure beliefs, how to weight the beliefs, how to combine the weighted beliefs, and so forth (e.g., Beckwith and Lehmann 1973 ). Here again, these assumed a rational economic decision-maker who processed information something like a computer.

Seeking rigor, buyer-behavior studies tended to be quantitative in their analyses, employing multivariate statistics, structural equation models, multidimensional scaling, conjoint analysis, and other mathematically sophisticated techniques. For example, various attempts to test the ICABS formulation developed simultaneous (now called structural) equation models such as those deployed by Farley and Ring ( 1970 , 1974 ) to test the Howard and Sheth ( 1969 ) model and by Beckwith and Lehmann ( 1973 ) to measure halo effects.

2.3 Aims in the late-1960s

During this time period, buyer-behavior research was still considered a subdivision of marketing research, the purpose of which was to provide insights useful to marketing managers in making strategic decisions. Essentially, every paper concluded with a section on “Implications for Marketing Managers.” Authors who failed to conform to this expectation could generally count on having their work rejected by leading journals such as the Journal of Marketing Research ( JMR ) and the Journal of Marketing ( JM ).

2.4 Summary—the three R’s in the late-1960s

Starting in the late-1960s to the early-1980s, virtually every buyer-behavior researcher followed the traditional approach to concepts, methods, and aims, now encapsulated under what we might call the three R’s —namely, rationality , rigor , and relevance . However, as we transitioned into the 1980s and beyond, that changed as some (though by no means all) consumer researchers began to expand their approaches and to evolve different perspectives.

2.5 Concepts after 1980

In some circles, the traditional emphasis on the buyer’s rationality—that is, a view of the buyer as a rational-economic, decision-oriented, information-processing, computer-like machine for making choices—began to evolve in at least two primary ways.

First, behavioral economics (originally studied in marketing under the label Behavioral Decision Theory)—developed in psychology by Kahneman and Tversky, in economics by Thaler, and applied in marketing by a number of forward-thinking theorists (e.g., Eric Johnson, Jim Bettman, John Payne, Itamar Simonson, Jay Russo, Joel Huber, and more recently, Dan Ariely)—challenged the rationality of consumers as decision-makers. It was shown that numerous commonly used decision heuristics depart from rational choice and are exceptions to the traditional assumptions of economic rationality. This trend shed light on understanding consumer financial decision-making (Prelec and Loewenstein 1998 ; Gourville 1998 ; Lynch Jr 2011 ) and how to develop “nudges” to help consumers make better decisions for their personal finances (summarized in Johnson et al. 2012 ).

Second, the emerging experiential view (anticipated by Alderson, Levy, and others; developed by Holbrook and Hirschman, and embellished by Schmitt, Pine, and Gilmore, and countless followers) regarded consumers as flesh-and-blood human beings (rather than as information-processing computer-like machines), focused on hedonic aspects of consumption, and expanded the concepts embodied by ICABS (Table 1 ).

2.6 Methods after 1980

The two burgeoning areas of research—behavioral economics and experiential theories—differed in their methodological approaches. The former relied on controlled randomized experiments with a focus on decision strategies and behavioral outcomes. For example, experiments tested the process by which consumers evaluate options using information display boards and “Mouselab” matrices of aspects and attributes (Payne et al. 1988 ). This school of thought also focused on behavioral dependent measures, such as choice (Huber et al. 1982 ; Simonson 1989 ; Iyengar and Lepper 2000 ).

The latter was influenced by post-positivistic philosophers of science—such as Thomas Kuhn, Paul Feyerabend, and Richard Rorty—and approaches expanded to include various qualitative techniques (interpretive, ethnographic, humanistic, and even introspective methods) not previously prominent in the field of consumer research. These included:

Interpretive approaches —such as those drawing on semiotics and hermeneutics—in an effort to gain a richer understanding of the symbolic meanings involved in consumption experiences;

Ethnographic approaches — borrowed from cultural anthropology—such as those illustrated by the influential Consumer Behavior Odyssey (Belk et al. 1989 ) and its discoveries about phenomena related to sacred aspects of consumption or the deep meanings of collections and other possessions;

Humanistic approaches —such as those borrowed from cultural studies or from literary criticism and more recently gathered together under the general heading of consumer culture theory ( CCT );

Introspective or autoethnographic approaches —such as those associated with a method called subjective personal introspection ( SPI ) that various consumer researchers like Sidney Levy and Steve Gould have pursued to gain insights based on their own private lives.

These qualitative approaches tended not to appear in the more traditional journals such as the Journal of Marketing , Journal of Marketing Research , or Marketing Science . However, newer journals such as Consumption, Markets, & Culture and Marketing Theory began to publish papers that drew on the various interpretive, ethnographic, humanistic, or introspective methods.

2.7 Aims after 1980

In 1974, consumer research finally got its own journal with the launch of the Journal of Consumer Research ( JCR ). The early editors of JCR —especially Bob Ferber, Hal Kassarjian, and Jim Bettman—held a rather divergent attitude about the importance or even the desirability of managerial relevance as a key goal of consumer studies. Under their influence, some researchers began to believe that consumer behavior is a phenomenon worthy of study in its own right—purely for the purpose of understanding it better. The journal incorporated articles from an array of methodologies: quantitative (both secondary data analysis and experimental techniques) and qualitative. The “right” balance between theoretical insight and substantive relevance—which are not in inherent conflict—is a matter of debate to this day and will likely continue to be debated well into the future.

2.8 Summary—the three I’s after 1980

In sum, beginning in the early-1980s, consumer research branched out. Much of the work in consumer studies remained within the earlier tradition of the three R’s—that is, rationality (an information-processing decision-oriented buyer), rigor (neo-positivistic experimental designs and quantitative techniques), and relevance (usefulness to marketing managers). Nonetheless, many studies embraced enlarged views of the three major aspects that might be called the three I’s —that is, irrationality (broadened perspectives that incorporate illogical, heuristic, experiential, or hedonic aspects of consumption), interpretation (various qualitative or “postmodern” approaches), and intrinsic motivation (the joy of pursuing a managerially irrelevant consumer study purely for the sake of satisfying one’s own curiosity, without concern for whether it does or does not help a marketing practitioner make a bigger profit).

3 The present—the consumer behavior field today

3.1 present concepts.

In recent years, technological changes have significantly influenced the nature of consumption as the customer journey has transitioned to include more interaction on digital platforms that complements interaction in physical stores. This shift poses a major conceptual challenge in understanding if and how these technological changes affect consumption. Does the medium through which consumption occurs fundamentally alter the psychological and social processes identified in earlier research? In addition, this shift allows us to collect more data at different stages of the customer journey, which further allows us to analyze behavior in ways that were not previously available.

Revisiting the ICABS framework, many of the previous concepts are still present, but we are now addressing them through a lens of technological change (Table 2 )

. In recent years, a number of concepts (e.g., identity, beliefs/lay theories, affect as information, self-control, time, psychological ownership, search for meaning and happiness, social belonging, creativity, and status) have emerged as integral factors that influence and are influenced by consumption. To better understand these concepts, a number of influential theories from social psychology have been adopted into consumer behavior research. Self-construal (Markus and Kitayama 1991 ), regulatory focus (Higgins 1998 ), construal level (Trope and Liberman 2010 ), and goal systems (Kruglanski et al. 2002 ) all provide social-cognition frameworks through which consumer behavior researchers study the psychological processes behind consumer behavior. This “adoption” of social psychological theories into consumer behavior is a symbiotic relationship that further enhances the theories. Tory Higgins happily stated that he learned more about his own theories from the work of marketing academics (he cited Angela Lee and Michel Pham) in further testing and extending them.

3.2 Present Methods

Not only have technological advancements changed the nature of consumption but they have also significantly influenced the methods used in consumer research by adding both new sources of data and improved analytical tools (Ding et al. 2020 ). Researchers continue to use traditional methods from psychology in empirical research (scale development, laboratory experiments, quantitative analyses, etc.) and interpretive approaches in qualitative research. Additionally, online experiments using participants from panels such as Amazon Mechanical Turk and Prolific have become commonplace in the last decade. While they raise concerns about the quality of the data and about the external validity of the results, these online experiments have greatly increased the speed and decreased the cost of collecting data, so researchers continue to use them, albeit with some caution. Reminiscent of the discussion in the 1970s and 1980s about the use of student subjects, the projectability of the online responses and of an increasingly conditioned “professional” group of online respondents (MTurkers) is a major concern.

Technology has also changed research methodology. Currently, there is a large increase in the use of secondary data thanks to the availability of Big Data about online and offline behavior. Methods in computer science have advanced our ability to analyze large corpuses of unstructured data (text, voice, visual images) in an efficient and rigorous way and, thus, to tap into a wealth of nuanced thoughts, feelings, and behaviors heretofore only accessible to qualitative researchers through laboriously conducted content analyses. There are also new neuro-marketing techniques like eye-tracking, fMRI’s, body arousal measures (e.g., heart rate, sweat), and emotion detectors that allow us to measure automatic responses. Lastly, there has been an increase in large-scale field experiments that can be run in online B2C marketplaces.

3.3 Present Aims

Along with a focus on real-world observations and data, there is a renewed emphasis on managerial relevance. Countless conference addresses and editorials in JCR , JCP , and other journals have emphasized the importance of making consumer research useful outside of academia—that is, to help companies, policy makers, and consumers. For instance, understanding how the “new” consumer interacts over time with other consumers and companies in the current marketplace is a key area for future research. As global and social concerns become more salient in all aspects of life, issues of long-term sustainability, social equality, and ethical business practices have also become more central research topics. Fortunately, despite this emphasis on relevance, theoretical contributions and novel ideas are still highly valued. An appropriate balance of theory and practice has become the holy grail of consumer research.

The effects of the current trends in real-world consumption will increase in magnitude with time as more consumers are digitally native. Therefore, a better understanding of current consumer behavior can give us insights and help predict how it will continue to evolve in the years to come.

4 The future—the consumer behavior field in 2040

The other papers use 2030 as a target year but we asked our survey respondents to make predictions for 2040 and thus we have a different future target year.

Niels Bohr once said, “Prediction is very difficult, especially if it’s about the future.” Indeed, it would be a fool’s errand for a single person to hazard a guess about the state of the consumer behavior field twenty years from now. Therefore, predictions from 34 active consumer researchers were collected to address this task. Here, we briefly summarize those predictions.

4.1 Future Concepts

While few respondents proffered guesses regarding specific concepts that would be of interest twenty years from now, many suggested broad topics and trends they expected to see in the field. Expectations for topics could largely be grouped into three main areas. Many suspected that we will be examining essentially the same core topics, perhaps at a finer-grained level, from different perspectives or in ways that we currently cannot utilize due to methodological limitations (more on methods below). A second contingent predicted that much research would center on the impending crises the world faces today, most mentioning environmental and social issues (the COVID-19 pandemic had not yet begun when these predictions were collected and, unsurprisingly, was not anticipated by any of our respondents). The last group, citing the widely expected profound impact of AI on consumers’ lives, argued that AI and other technology-related topics will be dominant subjects in consumer research circa 2040.

While the topic of technology is likely to be focal in the field, our current expectations for the impact of technology on consumers’ lives are narrower than it should be. Rather than merely offering innumerable conveniences and experiences, it seems likely that technology will begin to be integrated into consumers’ thoughts, identities, and personal relationships—probably sooner than we collectively expect. The integration of machines into humans’ bodies and lives will present the field with an expanding list of research questions that do not exist today. For example, how will the concepts of the self, identity, privacy, and goal pursuit change when web-connected technology seamlessly integrates with human consciousness and cognition? Major questions will also need to be answered regarding philosophy of mind, ethics, and social inequality. We suspect that the impact of technology on consumers and consumer research will be far broader than most consumer-behavior researchers anticipate.

As for broader trends within consumer research, there were two camps: (1) those who expect (or hope) that dominant theories (both current and yet to be developed) will become more integrated and comprehensive and (2) those who expect theoretical contributions to become smaller and smaller, to the point of becoming trivial. Both groups felt that current researchers are filling smaller cracks than before, but disagreed on how this would ultimately be resolved.

4.2 Future Methods

As was the case with concepts, respondents’ expectations regarding consumer-research methodologies in 2030 can also be divided into three broad baskets. Unsurprisingly, many indicated that we would be using many technologies not currently available or in wide use. Perhaps more surprising was that most cited the use of technology such as AI, machine-learning algorithms, and robots in designing—as opposed to executing or analyzing—experiments. (Some did point to the use of technologies such as virtual reality in the actual execution of experiments.) The second camp indicated that a focus on reliable and replicable results (discussed further below) will encourage a greater tendency for pre-registering studies, more use of “Big Data,” and a demand for more studies per paper (versus more papers per topic, which some believe is a more fruitful direction). Finally, the third lot indicated that “real data” would be in high demand, thereby necessitating the use of incentive-compatible, consequential dependent variables and a greater prevalence of field studies in consumer research.

As a result, young scholars would benefit from developing a “toolkit” of methodologies for collecting and analyzing the abundant new data of interest to the field. This includes (but is not limited to) a deep understanding of designing and implementing field studies (Gerber and Green 2012 ), data analysis software (R, Python, etc.), text mining and analysis (Humphreys and Wang 2018 ), and analytical tools for other unstructured forms of data such as image and sound. The replication crisis in experimental research means that future scholars will also need to take a more critical approach to validity (internal, external, construct), statistical power, and significance in their work.

4.3 Future Aims

While there was an air of existential concern about the future of the field, most agreed that the trend will be toward increasing the relevance and reliability of consumer research. Specifically, echoing calls from journals and thought leaders, the respondents felt that papers will need to offer more actionable implications for consumers, managers, or policy makers. However, few thought that this increased focus would come at the expense of theoretical insights, suggesting a more demanding overall standard for consumer research in 2040. Likewise, most felt that methodological transparency, open access to data and materials, and study pre-registration will become the norm as the field seeks to allay concerns about the reliability and meaningfulness of its research findings.

4.4 Summary - Future research questions and directions

Despite some well-justified pessimism, the future of consumer research is as bright as ever. As we revised this paper amidst the COVID-19 pandemic, it was clear that many aspects of marketplace behavior, consumption, and life in general will change as a result of this unprecedented global crisis. Given this, and the radical technological, social, and environmental changes that loom on the horizon, consumer researchers will have a treasure trove of topics to tackle in the next ten years, many of which will carry profound substantive importance. While research approaches will evolve, the core goals will remain consistent—namely, to generate theoretically insightful, empirically supported, and substantively impactful research (Table 3 ).

5 Conclusion

At any given moment in time, the focal concepts, methods, and aims of consumer-behavior scholarship reflect both the prior development of the field and trends in the larger scientific community. However, despite shifting trends, the core of the field has remained constant—namely, to understand the motivations, thought processes, and experiences of individuals as they consume goods, services, information, and other offerings, and to use these insights to develop interventions to improve both marketing strategy for firms and consumer welfare for individuals and groups. Amidst the excitement of new technologies, social trends, and consumption experiences, it is important to look back and remind ourselves of the insights the field has already generated. Effectively integrating these past findings with new observations and fresh research will help the field advance our understanding of consumer behavior.

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Malter, M.S., Holbrook, M.B., Kahn, B.E. et al. The past, present, and future of consumer research. Mark Lett 31 , 137–149 (2020). https://doi.org/10.1007/s11002-020-09526-8

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Consumer Behavior Research

Exploring the Depths of Consumer Insights for Strategic Business Growth

In an era where understanding consumer behavior is more than a competitive edge, it’s a survival imperative, NielsenIQ (NIQ) and GfK emerge as pivotal allies. This expertise is essential for businesses in B2C commerce, retail, and beyond, aiming to navigate the complex consumer landscape for informed, strategic decision-making.

Definition and Importance of Consumer Behavior Research

Consumer behavior research is the study of how individuals make decisions to spend their resources on consumption-related items. It involves understanding the what, why, when, and how of consumer purchases. This field is crucial for businesses as it sheds light on consumer preferences, buying patterns, and decision-making processes. By understanding these aspects, companies can tailor their products and marketing strategies effectively, ensuring alignment with consumer needs and market trends, ultimately leading to increased customer satisfaction and loyalty.

Overview of the Impact of Consumer Behavior Research on Marketing Strategies

The insights from consumer behavior research are instrumental in shaping targeted marketing strategies. By understanding consumer motivations and behaviors, businesses can create more relevant and engaging marketing messages, leading to improved customer engagement and retention. This research helps in segmenting the market, identifying potential customers, and understanding the factors that drive consumer decisions. It also aids in predicting future trends, enabling companies to stay ahead of the curve. Effective use of consumer behavior research can lead to the development of products and services that meet the evolving needs of consumers, thereby enhancing brand loyalty and market share.

Consumer and shopper insights

Understand consumer and shopper behavior, demographics, and loyalty with modern, representative consumer panels and customer survey capabilities.

Understanding Consumer Behavior

These diverse influences combine to form unique consumer profiles, which businesses must understand to effectively target their marketing efforts..

Factors Influencing Consumer Behavior

Consumer behavior is influenced by a complex interplay of psychological, social, cultural, and personal factors. Psychological factors include perceptions, attitudes, and motivation, which guide consumers’ emotional and cognitive responses. Social factors encompass family, friends, and societal norms that shape buying habits through peer influence and social trends. Cultural factors involve the broader societal beliefs, values, and customs that dictate consumer behavior in a particular region. Personal factors such as age, occupation, lifestyle, and economic status also significantly impact consumer choices. These diverse influences combine to form unique consumer profiles, which businesses must understand to effectively target their marketing efforts.

The Role of Consumer Behavior in Decision Making

Consumer behavior plays a critical role in the decision-making process. It involves understanding how consumers decide upon their needs and wants, choose among products and brands, and determine their purchase methods. This knowledge is vital for businesses to design and position their offerings in a way that resonates with the target audience. Understanding consumer behavior helps in predicting how consumers will respond to marketing messages and product features, enabling businesses to tailor their strategies to meet consumer needs effectively. It also assists in identifying opportunities for new product development and market expansion.

Consumer Behavior Theories and Models

Consumer behavior theories and models provide frameworks for understanding and predicting consumer actions. The Stimulus-Response Model, for instance, illustrates how marketing stimuli and environmental factors influence consumer responses. Maslow’s Hierarchy of Needs explains consumer motivation in terms of fulfilling basic to complex needs. The Theory of Reasoned Action and the Theory of Planned Behavior focus on the relationship between attitudes, intentions, and behaviors. The Consumer Decision Model outlines the cognitive process involving need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. These models help businesses in developing strategies that align with consumer psychology and behavioral patterns. They also assist in segmenting the market and targeting consumers with personalized marketing approaches, enhancing the effectiveness of marketing campaigns and product offerings.

Research Methods in Consumer Behavior Research

Customer analytics is vital for businesses across various sectors, including FMCG, sales, and e-commerce. It enables companies to create personalized experiences, improve customer engagement, and boost retention, ultimately leading to increased revenue. By understanding consumer behavior through data analysis, businesses can make informed decisions that resonate with their target audience.

Quantitative Research Methods

Quantitative research methods in consumer behavior research involve structured techniques like surveys and questionnaires to collect numerical data. These methods are useful for gauging consumer attitudes, preferences, and behaviors across larger populations. Statistical analysis of this data helps in identifying trends, testing hypotheses, and making generalizations about consumer behavior. Quantitative research is valuable for businesses as it provides measurable and comparable insights that can guide strategic decision-making. It helps in understanding the magnitude of consumer responses to various marketing stimuli and in assessing the potential market size for new products or services.

Qualitative Research Methods

Qualitative research methods in consumer behavior focus on understanding the deeper motivations, thoughts, and feelings of consumers. Techniques like in-depth interviews, focus groups, and observational studies provide rich, detailed insights that are not typically captured through quantitative methods. This approach is crucial for exploring the underlying reasons behind consumer choices, preferences, and attitudes. Qualitative research helps businesses in gaining a deeper understanding of consumer experiences, emotions, and perceptions, which can be invaluable in developing more effective marketing strategies, product designs, and customer service approaches. It allows companies to explore new ideas and concepts with consumers, gaining insights that can lead to innovation and differentiation in the market.

Experimental Research in Consumer Behavior

Experimental research in consumer behavior involves manipulating one or more variables to observe the effect on another variable, typically consumer behavior or attitudes. This method is used to establish cause-and-effect relationships, providing insights into how changes in product features, pricing, or marketing strategies might influence consumer behavior. Controlled experiments, often conducted in laboratory settings or as field experiments, allow researchers to isolate the effects of specific variables. This type of research is particularly valuable for testing new products, pricing strategies, and marketing messages before full-scale implementation. It helps businesses in making informed decisions based on empirical evidence, reducing the risks associated with new initiatives.

Factors Affecting Consumer Behavior

Psychological factors.

Psychological factors play a significant role in shaping consumer behavior. These include individual motivations, perceptions, attitudes, and beliefs. Motivation drives consumers to fulfill their needs and desires, influencing their buying decisions. Perception, how consumers interpret information, can significantly impact their choices, as it shapes their understanding of products and brands. Attitudes and beliefs, formed through experiences and social influences, guide consumer preferences and loyalty. Understanding these psychological factors is crucial for businesses as they influence how consumers view and interact with products and services. By aligning marketing strategies with consumer psychology, businesses can more effectively influence purchasing decisions and build stronger customer relationships.

Social Factors

Social factors significantly influence consumer behavior, encompassing the impact of society, family, and peer groups. Family members and friends can influence buying decisions through recommendations or shared experiences. Social groups, including social networks and communities, also play a role in shaping consumer preferences and behaviors. The influence of social media has become particularly significant, as it not only connects consumers but also serves as a platform for sharing opinions and experiences about products and services. Understanding these social dynamics is important for businesses as they can leverage social influences through targeted marketing strategies, influencer partnerships, and social media campaigns. Recognizing the power of social factors can help businesses in building brand awareness and loyalty among consumer groups.

Cultural Factors

Cultural factors are deeply ingrained elements that influence consumer behavior, including values, beliefs, customs, and traditions. These factors vary across different regions and societies, affecting how consumers perceive and interact with products and services. Cultural influences can determine consumer preferences, buying habits, and brand perceptions. For instance, color symbolism, dietary preferences, and language can all vary significantly between cultures, impacting marketing strategies and product development. Businesses must understand and respect these cultural nuances to effectively cater to diverse consumer markets. Adapting products and marketing messages to align with cultural values and norms can significantly enhance a brand’s appeal and acceptance in different markets.

Personal Factors

Personal factors, including age, gender, occupation, lifestyle, and economic status, also significantly influence consumer behavior. These factors determine individual needs, preferences, and purchasing power. For example, younger consumers may prioritize trendy and innovative products, while older consumers might value functionality and durability. Lifestyle choices, such as health consciousness or environmental awareness, can also drive consumer preferences and choices. Economic factors, such as income and economic conditions, influence consumers’ ability to purchase and their sensitivity to price changes. Understanding these personal factors is crucial for businesses to segment their market effectively and tailor their products and marketing strategies to meet the specific needs of different consumer groups.

Consumer Purchase Decision Making

Stages of the consumer purchase decision-making process.

The consumer purchase decision-making process typically involves several key stages: problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.

In the problem recognition stage, consumers identify a need or desire.

During the information search, they seek out information about products or services that can fulfill their need. In the evaluation stage, consumers compare different options based on attributes such as price, quality, and brand reputation.

The purchase decision involves choosing a product and making the purchase. Finally, in the post-purchase stage, consumers evaluate their satisfaction with the purchase, which can influence future buying decisions and brand loyalty.

Understanding these stages is essential for businesses to effectively influence consumers at each step, from raising awareness to ensuring post-purchase satisfaction.

Influences on Consumer Purchase Decisions

Consumer purchase decisions are influenced by a multitude of factors, including product attributes, brand reputation, marketing messages, social influences, and personal preferences. Product features such as quality, price, and usability are key determinants of consumer choices. Brand reputation, built over time through consistent quality and marketing efforts, also significantly impacts purchase decisions. Marketing messages and advertising play a crucial role in shaping consumer perceptions and driving demand. Social influences, including recommendations from family and friends, as well as online reviews and influencer endorsements, can sway consumer decisions. Personal factors such as individual needs, preferences, and financial constraints also play a critical role. Businesses must consider these diverse influences when developing products and crafting marketing strategies to effectively appeal to their target audience.

Impulse Buying Behavior

Impulse buying behavior refers to unplanned purchases made by consumers, often driven by emotional factors rather than rational decision-making. This type of behavior is typically triggered by external stimuli such as attractive product displays, promotional offers, or persuasive sales tactics. Emotional responses, such as excitement or the desire for instant gratification, also play a significant role in impulse buying. Retailers often leverage this behavior by strategically placing impulse items near checkout areas or using limited-time offers to create a sense of urgency. Understanding the triggers of impulse buying can help businesses in designing marketing strategies and store layouts that encourage such purchases, potentially increasing sales and customer engagement.

Online Shopping and Consumer Behavior

Impact of online shopping on consumer behavior.

The rise of online shopping has significantly impacted consumer behavior, offering convenience, a wider selection of products, and often competitive pricing. Online shopping has changed the way consumers research products, compare prices, and make purchasing decisions. The ease of access to a vast array of products and the ability to shop at any time have increased the frequency and diversity of purchases. Online reviews and ratings have also become important factors in the decision-making process, as consumers increasingly rely on the opinions of others. Additionally, the personalized shopping experiences offered by many online retailers, through targeted recommendations and tailored marketing messages, have further influenced consumer buying habits. Understanding these shifts in consumer behavior is crucial for businesses to adapt their strategies for the digital marketplace, ensuring they meet the evolving needs and expectations of online shoppers.

Factors Influencing Online Buying Behavior

Several factors influence online buying behavior, including website usability, product variety, pricing, customer reviews, and the overall shopping experience. A user-friendly website with easy navigation and a seamless checkout process is crucial for attracting and retaining online shoppers. A diverse product range and competitive pricing are also key factors in attracting consumers. Customer reviews and ratings significantly impact purchase decisions, as they provide social proof and reduce perceived risk. The overall shopping experience, including customer service, delivery options, and return policies, also plays a vital role in influencing online buying behavior. Security and privacy concerns are additional considerations, as consumers are increasingly aware of data protection and online fraud. Businesses must address these factors to create a compelling online shopping experience that meets consumer expectations and drives online sales.

Comparison of Online and Offline Consumer Behavior

Online and offline consumer behaviors exhibit distinct differences, influenced by the unique aspects of each shopping environment. Online shopping offers convenience, a broader selection, and often more competitive pricing, leading to different purchasing patterns compared to offline shopping. Consumers tend to spend more time researching and comparing products online, while offline shopping is often driven by immediate needs and sensory experiences. The tactile experience and instant gratification of offline shopping are not replicable online, but the online environment offers personalized recommendations and a wealth of product information. Offline shopping also provides opportunities for personal interaction and immediate problem resolution, which can enhance customer satisfaction. Understanding these differences is crucial for businesses to tailor their strategies for each channel, ensuring a cohesive and complementary shopping experience that meets the needs and preferences of consumers in both online and offline environments.

Consumer Satisfaction and Loyalty

Importance of customer satisfaction in consumer behavior research.

Customer satisfaction is a critical component of consumer behavior research, as it directly impacts repeat purchases and brand loyalty. Satisfied customers are more likely to become repeat buyers, recommend the brand to others, and provide positive reviews. Customer satisfaction is influenced by various factors, including product quality, customer service, and overall shopping experience. Understanding and measuring customer satisfaction helps businesses identify areas for improvement, enhance customer experiences, and build long-term relationships with consumers. High levels of customer satisfaction lead to increased customer loyalty, which is essential for business growth and sustainability.

Factors Influencing Customer Satisfaction

Customer satisfaction is influenced by a range of factors, including product quality, price, service quality, brand image, and customer expectations. Product quality is a primary determinant of satisfaction, as consumers expect products to perform as advertised. Price also plays a role, as consumers evaluate the value they receive relative to the cost. Service quality, encompassing customer service interactions and the overall shopping experience, significantly impacts satisfaction levels. A positive, helpful, and efficient service experience can enhance satisfaction, while negative experiences can lead to dissatisfaction. Brand image, shaped by marketing communications and past experiences, influences consumer expectations and perceptions. Meeting or exceeding these expectations is key to achieving high levels of customer satisfaction. Additionally, personal factors such as individual needs, preferences, and past experiences also influence satisfaction. Businesses must consider these diverse factors to effectively meet consumer needs and enhance satisfaction levels.

Relationship Between Customer Satisfaction and Loyalty

The relationship between customer satisfaction and loyalty is strong and direct. Satisfied customers are more likely to develop a sense of loyalty to a brand, leading to repeat purchases and positive word-of-mouth recommendations. Loyalty is not just about repeat buying; it also involves an emotional connection and a preference for the brand over competitors. Satisfied customers are also more likely to be forgiving of minor issues and are less sensitive to price changes. Conversely, dissatisfied customers are more likely to switch to competitors and share negative experiences with others. Building customer loyalty requires consistently meeting or exceeding customer expectations, providing high-quality products and services, and maintaining positive customer relationships. Loyal customers are valuable assets to businesses, as they tend to have a higher lifetime value, lower acquisition costs, and can become brand advocates, promoting the brand through their networks.

Consumer Research and Marketing Strategies

Utilizing consumer research to develop effective marketing programs.

Consumer research is a vital tool for developing effective marketing programs. By understanding consumer needs, preferences, and behaviors, businesses can create targeted marketing strategies that resonate with their audience. Consumer research helps in identifying market segments, understanding consumer pain points, and uncovering opportunities for product development or enhancement. It also provides insights into the most effective channels and messages for reaching the target audience. Utilizing consumer research in marketing program development ensures that strategies are data-driven and customer-centric, increasing the likelihood of success. It enables businesses to tailor their marketing efforts to the specific needs and preferences of different consumer segments, improving engagement and response rates. Additionally, ongoing consumer research allows businesses to adapt their marketing strategies in response to changing consumer trends and market conditions, ensuring continued relevance and effectiveness.

Targeting Specific Consumer Segments Based on Research Findings

Targeting specific consumer segments based on research findings is a key strategy for effective marketing. Consumer research provides detailed insights into different consumer groups, including their demographics, psychographics, behaviors, and preferences. By analyzing this data, businesses can identify distinct segments within their target market, each with unique needs and characteristics. Targeting these segments with tailored marketing messages and product offerings increases the relevance and appeal of the brand to each group. For example, a segment characterized by health-conscious consumers would respond more positively to marketing messages emphasizing the health benefits of a product. Segment-specific targeting allows businesses to allocate marketing resources more efficiently, focusing on the most promising segments with the highest potential for conversion and loyalty. It also enhances the customer experience by providing consumers with products and marketing messages that are more closely aligned with their individual needs and preferences.

Adapting Marketing Strategies to Consumer Behavior Trends

Adapting marketing strategies to consumer behavior trends is essential for businesses to stay relevant and competitive. Consumer behavior is constantly evolving, influenced by factors such as technological advancements, cultural shifts, and economic changes. By staying attuned to these trends, businesses can anticipate changes in consumer needs and preferences, and adjust their marketing strategies accordingly. This may involve adopting new marketing channels, such as social media or influencer marketing, to reach consumers where they are most active. It could also mean developing new products or services that align with emerging consumer trends, such as sustainability or personalization. Adapting marketing strategies to consumer behavior trends requires a proactive approach, with ongoing research and analysis to identify emerging patterns. Businesses that successfully adapt to these trends can capture new market opportunities, enhance customer engagement, and maintain a competitive edge.

Case Studies in Consumer Behavior Research

Analysis of real-life examples and their implications.

Real-life case studies in consumer behavior research provide valuable insights into the practical application of theoretical concepts and the effectiveness of different marketing strategies. For example, a case study in the automotive industry might analyze how consumer preferences for eco-friendly vehicles have influenced car manufacturers’ product development and marketing strategies. In the retail sector, a case study could examine the impact of online shopping on brick-and-mortar stores and how these businesses have adapted to the digital era. These case studies offer concrete examples of how businesses have successfully navigated changes in consumer behavior, providing lessons and strategies that can be applied in other contexts. They also highlight the importance of consumer research in identifying market trends, understanding consumer needs, and developing effective marketing strategies. By analyzing real-life examples, businesses can gain a deeper understanding of consumer behavior, learn from the successes and challenges of others, and apply these insights to their own strategies.

Examination of Successful Marketing Campaigns Based on Consumer Behavior Research

Examining successful marketing campaigns that are based on consumer behavior research can provide valuable insights into effective marketing practices. These case studies demonstrate how a deep understanding of consumer needs, preferences, and behaviors can be leveraged to create impactful marketing campaigns. For instance, a campaign that effectively uses consumer data to personalize messages and offers can result in higher engagement and conversion rates. Another example might be a campaign that taps into current consumer trends, such as sustainability or wellness, to resonate with the target audience. Analyzing these successful campaigns can reveal key strategies and tactics that businesses can adopt, such as the use of specific channels, messaging techniques, or promotional offers. These case studies also highlight the importance of data-driven decision-making in marketing, showing how consumer research can inform and guide successful marketing initiatives.

Motivating Consumers and New Product Adoption

Strategies to motivate consumers to adopt new products.

Motivating consumers to adopt new products is a critical challenge for businesses. Effective strategies for encouraging new product adoption include leveraging social proof, offering free trials or samples, and creating educational content. Social proof, such as customer testimonials or influencer endorsements, can reduce perceived risk and increase consumer confidence in trying a new product. Free trials or samples allow consumers to experience the product firsthand, reducing barriers to adoption. Educational content, such as how-to guides or product demonstrations, can help consumers understand the value and benefits of the new product. Additionally, businesses can use targeted marketing campaigns to reach early adopters and innovators who are more likely to try new products and spread the word to others. Creating a sense of urgency or exclusivity around the new product, through limited-time offers or exclusive access, can also motivate consumers to adopt the product more quickly.

Innovations in Consumer Behavior Research for New Product Development

Innovations in consumer behavior research are playing a crucial role in new product development. Advanced analytics and data mining techniques allow businesses to analyze large datasets and uncover deep insights into consumer needs and preferences. Social listening tools enable companies to monitor social media and online conversations, gaining real-time insights into consumer opinions and trends. Virtual reality (VR) and augmented reality (AR) technologies are being used to test consumer reactions to new products in simulated environments, providing valuable feedback before market launch. Behavioral economics principles, such as understanding cognitive biases and decision-making processes, are also being applied to better predict consumer responses to new products. These innovations in consumer behavior research provide businesses with more accurate and comprehensive data, enabling them to develop products that are closely aligned with consumer needs and preferences, increasing the likelihood of market success.

Social Media and Consumer Behavior

Influence of social media on consumer behavior.

Social media has a profound influence on consumer behavior, shaping how consumers discover, research, and share information about products and services. Platforms like Facebook, Instagram, and Twitter serve as important channels for brand communication and engagement. Consumers use social media to seek recommendations, read reviews, and gather opinions from their networks, which significantly influences their purchasing decisions. Brands leverage social media for targeted advertising, influencer partnerships, and content marketing, creating opportunities for direct interaction and engagement with consumers. Social media also facilitates the spread of trends and viral content, quickly influencing consumer preferences and behaviors. The interactive and dynamic nature of social media means that consumer opinions and trends can rapidly change, requiring businesses to be agile and responsive in their social media strategies. Understanding the influence of social media on consumer behavior is essential for businesses to effectively engage with their audience and influence purchasing decisions.

Role of Social Media in Shaping Consumer Perceptions and Purchase Decisions

Recap of the importance of consumer behavior research.

Consumer behavior research is essential for businesses seeking to understand and effectively respond to the evolving needs and preferences of their target audience. It provides valuable insights into why consumers make certain choices, what influences their purchasing decisions, and how they interact with brands. This research is crucial for developing effective marketing strategies, creating products that meet consumer needs, and enhancing the overall customer experience. By staying informed about consumer behavior trends and applying these insights, businesses can improve customer engagement, increase brand loyalty, and drive growth. In today’s competitive marketplace, a deep understanding of consumer behavior is a key differentiator, enabling businesses to create more personalized, relevant, and impactful marketing initiatives.

Future Directions and Emerging Trends in Consumer Behavior Research

The future of consumer behavior research is marked by rapid advancements in technology and data analytics, leading to more sophisticated and nuanced understanding of consumer preferences and behaviors. Emerging trends include the use of artificial intelligence (AI) and machine learning to analyze consumer data, providing deeper and more predictive insights. The integration of biometric data, such as eye tracking and facial recognition, offers new ways to understand consumer responses to marketing stimuli. The growing importance of sustainability and ethical considerations is also influencing consumer behavior, leading to increased demand for eco-friendly and socially responsible products. Additionally, the rise of the experience economy is shifting focus from product features to customer experiences, requiring businesses to create more immersive and engaging customer interactions. Staying abreast of these trends and continuously innovating in consumer behavior research will be crucial for businesses to remain relevant and competitive in the changing market landscape.

How NIQ and GfK Can Help

In the complex world of consumer behavior, NIQ and GfK offer the expertise and tools necessary to navigate this landscape effectively. With comprehensive solutions like:

• NielsenIQ’s Homescan : Track, diagnose, and analyze consumer behavior from more than 250,000 households across 25 countries.
• Consumer analytics : Go deeper and create more clarity around shopper behavior with custom surveys and segmentation.
• Consumption moments : Reveal the true motivations behind customer consumption behavior and usage to guide product innovation and marketing strategy.
• gfknewron marke t : Create the right opportunities with gfknewron market
• gfknewron predict : Plan your future using the world’s most comprehensive sales tracking data for Tech & Durables.
• gfknewron Consumer : Understand your consumers’ behavior to redefine your success

By leveraging these tools, businesses can gain a competitive edge, adapting to market changes and consumer trends with agility and precision.

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Research: Consumers’ Sustainability Demands Are Rising

• Ashley Reichheld,
• Cory Ritthaler

We’re on the brink of a major shift in consumption patterns, where brands that make good on their promises to people and the planet will have the advantage.

Three factors are driving us toward a major shift in consumption patterns where consumers will consider sustainability as a baseline requirement for purchase: 1) Trust drives behavior and, ultimately, business outcomes; 2) Sustainability promotes trust, particularly among younger generations; and 3) Younger generations will soon have most of the purchasing power in the U.S. Companies that understand these trends — and create truly sustainable brands that make good on their promises to people and the planet — will seize advantage from brands that make flimsy claims or have not invested sufficiently in sustainability.

For most consumers, sustainability has been considered a “nice-to-have” in the brands they buy, but it’s rarely been table stakes . That’s about to change. Our research suggests we’re on the brink of a major shift in consumption patterns, where truly sustainable brands — those that make good on their promises to people and the planet — will seize the advantage from brands that make flimsy claims or that have not invested sufficiently in sustainability. We’re fast approaching this tipping point where sustainability will be considered a baseline requirement for purchase, and companies should prepare now.

• Ashley Reichheld , a principal at Deloitte Consulting LLP, created TrustID, a groundbreaking system to help companies measure, predict, and build trust with their customers, workforce, and partners. Ashley is the lead author of The Four Factors of Trust .
• JP John Peto , a principal at Deloitte Consulting LLP, is a reformed cattle farmer who now leads the practice of sustainability-oriented offerings across Deloitte Consulting in the U.S.
• CR Cory Ritthaler is a principal at Deloitte Consulting LLP in the power, utilities, and renewables industry.  He helps clients drive profitability and growth by increasing customer engagement, reducing cost to serve without sacrificing quality, and combining digital capabilities and a human touch.

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Top 18 Consumer Trends Impacting Customer Experience in 2024

The top consumer trends impacting customer experience in 2024 are being shaped by inflation, digital channels, and evolving lifestyles.

What are the latest consumer trends that brands need to know about in 2024? For answers, Medallia Market Research conducted a survey of 2,000 consumers and an analysis of the credit and debit transaction of 8 million U.S. consumers to find out what changes we can expect to see across customer spending and savings, dining, ordering, travel, shopper journeys, product discovery, content streaming, and more in the year ahead.

Medallia’s Head of Market Research Insights, Andrew Custage , revealed the latest findings from this study in a report: Consumer Trends Research: What to Know for 2024 . He shared that this year consumer behavior is being shaped by three major forces: macroeconomic influences like inflation, technology — including generative AI and digital channels — and evolving lifestyles.

I n this article we’ll share the highlights of this presentation, including the top 18 consumer trends impacting customer experience we’re seeing unfold in 2024 and what brands can do to adapt in line with changing consumer behavior, interests, and preferences. 

Top 18 Consumer Trends in 2024

1. for the fourth year in a row, price is the number #1 factor driving household purchase decisions, but fewer consumers are citing cost as their top concern compared to in 2022 and 2023..

In 2021, “change in prices” was a top influence shaping purchasing behavior for roughly one-third of adults in 2021.

“By the time we got to mid 2022 and early 2023, though, this number had jumped up dramatically, and this was in the face of the heaviest periods of inflation,” explains Custage. “What we have seen over the past year, though, is that this number has receded back down to near where it was in 2021. It still is the top-ranked factor individually, but it’s shrunk as far as how often it’s cited, and it’s now once again at around a third of households that are selecting it as one of the choices.”

The uptick in 2022 to 2023 and now downtrend in 2024 follows the rise and fall of the rate of inflation rate itself. The main takeaway for brands: Inflation and high prices are still important for consumers, but not as influential as they used to be.

2. As consumers have adjusted to inflation, consumer transaction volume is down slightly, while spend per transaction has remained steady.

What we’re seeing unfold is a mix of prices settling down, paired with shoppers either slightly easing up on the number of items purchased per transaction or trading down and purchasing cheaper alternatives in place of the products they’d normally buy. 

3. Some consumers may be racking up debt to get by, but it might not be a growing problem.

The majority of consumers (66%) say they’re finding ways to cut back on non-essential spend. Meanwhile 41% say they’ve increased their income to compensate, such as by landing a new job or promotion or taking on extra hours. 

Roughly one-third of consumers are in the position of having to save less or take on more debt to compensate for rising costs. Though this behavior isn’t sustainable, Custage doesn’t see this trend ultimately affecting economic growth for three key reasons:

• The proportion of respondents who say they’re dipping into their savings or adding on more debt isn’t growing — this percent has remained relatively steady for the past two years. 
• Retail activity remains fairly unchanged, as illustrated in trend #2 above. In other words, there haven’t been the kinds of cutbacks in spending that are drastic enough to lead to a recession. 
• When we surveyed consumers this year about their debt over the past 12 months and whether it’s grown or declined, the percent of consumers who say they have more debt than they used to is roughly equal to the percent who say they have less debt. 

4. As inflation persists, consumers are adjusting their purchases and focusing on essentials vs. nice-to-haves.

The biggest differences consumers cited between their spending in 2022 and 2023 were that they made lifestyle changes to reduce their purchases and that they learned to accept higher prices and plan financially based on these expenses. 

“Consumers have just gotten used to what the new normal is and their behavior has adjusted accordingly and, to some extent, permanently,” says Custage. 

As part of this trend toward adjusting spending, consumers appear to be favoring retailers that offer need-to-have items, he adds.

The winners are ecommerce platforms, grocery stores, dollar stores, and club retailers, and the ones that are trending downwards fall into categories like leisure, home improvement, and fitness. 

5. Despite cost concerns, consumers aren’t cutting back on dining out.

Spending on food is one of the biggest expenses for individuals, and, with rising inflation, many thought consumers would cut back on dining out as a “nice to have” as well and instead shift to spending on groceries. 

“We really haven’t seen that trend play out, and a lot of it can be due to the built-in convenience and time savings of restaurants that turn many consumers away from groceries regardless of what prices are,” Custage explains, adding that the rate of inflation was also higher for groceries in 2022 to 2023 compared to restaurant food. “And that helped at least restaurants win the sticker shock concerns that consumers would experience when seeing how much grocery prices had gone up and just turn them away from that and towards restaurants, even if the cost per meal is still higher at a restaurant.”

As a result, the balance of the share of wallet between grocery stores and restaurants hasn’t changed much due to inflation. And the rate of switching from dining at costlier full-service restaurants to dining out at more budget-friendly fast casual establishments has been modest. 

“There’s been a little bit of a trade-down effect where more often if people are buying restaurant food, they’re going to turn to quick service and fast casual instead of casual dining or family dining or sit-down dining, where it’s a little more expensive per meal,” he says.

In response, restaurants have rolled out some pretty creative strategies, such as Applebee’s launching a subscription model offering guests greater savings per visit. 

6. Today’s shopper is conducting more research before making a purchase.

To adapt to inflation, consumers are more likely to price compare the cost of buying the same product at different stores, the same product online vs. in person, an off-brand item vs. the brand-name version, and an item second hand vs. new.

“As consumers are becoming a little bit savvier, I think a big takeaway for restaurants, retailers, hospitality, and anybody else in the space is to be more aware of the shopper journey and what’s visible to consumers in terms of price, being cognizant of whether you’re competing on price to begin with or if you’re competing on another attribute like experience, value, service speed, or product quality,” says Custage. 

For brands that are losing out on price, they need to make sure they’re differentiated in another way to win over increasingly savvy and discerning consumers. 

7. Generative AI is becoming part of the shopper journey.

More than one-third of Millennials and Gen Zers say they’ve used artificial intelligence for ideas about what to buy or where to shop. 

While there may not be much that retailers can do right now to try and improve their standings within the results AI tools produce, this new consumer trend is important to be aware of, one that will undoubtedly grow over time, explains Custage. It’s also worth noting that there’s some level of consumer comfort with engaging with AI to assist with shopping and retail decision-making, a trend that brands could ultimately use to adapt their strategies and offerings on their owned channels.

8. Consumers are noticing the increased pressure to tip — even in situations where tipping wasn’t previously expected — and the cuts companies are making that are having a negative impact on the customer experience.

Most consumers observe that there’s a greater pressure to tip these days and that there have been changes for the worse to the customer experience and customer service companies offer as a result of cutbacks, with retailers, restaurants, and airlines cited as the worst customer service offenders in 2024. 

9. Consumers say they’re more likely to speak out about negative customer experiences.

More than three in five consumers (62%) say that they’re more willing to speak up when a company provides them with a poor experience in 2024. 

In response, brands should collect customer feedback through internal channels to learn from these insights and adapt their strategies accordingly. Companies that aren’t proactive run the risk of customers sharing their poor experiences on public forums, which could impact their overall brand reputation and turn potential customers away. 

10. Buy-now, pay-later’s growth continues to soar — not just as a payment option, but in shaping the entire customer journey.

These payment platforms, which have grown by 20X over the last five years, influence the brands that customers decide to shop with and where they make purchases, based on the availability of third-party buy-now, pay-later partners, says Custage. For many, the shopping process starts with seeing where their preferred payment option is accepted or whether platforms like Klarna or Afterpay are offering promotions or deals. 

11. Third-party ordering platforms have become a permanent part of the digital retail and restaurant customer journey.

Collectively, the industry is stable and experiencing all-time highs in terms of sales, even as the initial drivers of third-party ordering platforms’ success — stay-at-home orders and social distancing guidelines — are no longer factors. 

“Even in the face of rising costs and the issues that consumers have with tipping or added service fees or price increases on one channel versus another, the built-in convenience and habit forming that platforms like DoorDash and Instacart have been able to achieve over the past few years, beginning at the height of COVID-19 and really continuing not giving up much ground at all, has shown that these platforms are really here to stay,” Custage explains. 

One factor fueling the success of these platforms? The rise of Gen Z , many of whom are members of the workforce, live on their own, and have only been consumers with purchasing power in an era in which these platforms existed.  

The goal for restaurants and retailers should be to have a clearly defined customer experience strategy for their presence on third-party ordering platforms, to use these platforms strategically as an acquisition tool, and, ultimately, to encourage customers to migrate over to direct, first-party ordering.

12. Amazon just keeps on growing.

The online retailer is now the go-to for consumers for tentpole shopping events like Black Friday and Cyber Monday, ahead of traditional mass retailers and department stores. 

The company has built momentum with their own retail holiday, Prime Day, a bandwagon other brands are attempting to hop on by rolling out their own competing retail holidays to win back some share of wallet. 

13. Omnichannel journeys are the new normal.

While about half of consumers continue to browse and buy groceries in person (a single-channel experience) and online-only retailers are dominated by digital-only journeys, most other kinds of retailers — from department stores and dollar stores to office supply stores and jewelry stores — have a much more nuanced, omnichannel customer journey, with a mix of behaviors that include browsing in store and buying online for delivery, browsing online and buying in store, and browsing and buying online for curbside pickup. 

There’s a clear call to action for retailers: These experiences and touchpoints must no longer be managed in silos. 

“There’s really a need for this more cohesive view of the customer and having a continuity of knowledge of the activity customers have from one channel to the next…considering how often consumers are starting in one channel and then are jumping across to another,” explains Custage.

 14. Brands’ mobile apps are the most popular digital touchpoint for customers.

Consumers are most likely to interact with brands digitally via a mobile device, either via the company’s mobile app (35%) or company’s website via a phone (27%).

For businesses, that means enhancing the app and mobile experience need to be a top priority to drive repeat engagement, conversions, upsells, and crossales, says Custage. 

15. Social media is playing a bigger role in the product discovery journey than it did a year ago.

More than half of consumers agree that social media is having a bigger influence on how they find out about products in 2024 than in 2023, with Facebook, Instagram, and TikTok being the top sources of product information. 

Brands should pay attention to differences in product discovery by generation, and, as Gen Z becomes a more powerful consumer group, it will be important to keep an eye on the channels younger audiences use to learn about and engage with brands. 

16. Not surprisingly, Baby Boomers are more likely to watch live TV, while younger generations are more likely to consume user-generated content on streaming services and play video games.

“Gen Zers are engaging with media much differently than their older counterparts,” explains Custage. 

As such, for brands looking to reach younger consumers, they’ll need to become proficient in creating short-form user-generated content with influencers, he adds.

17. Consumers are streaming more content in 2024 than they did 12 months ago.

Both streaming video and audio content are gaining traction, with consumers reporting an uptick in each by 12% and 6%, respectively. 

18. Consumer optimism about travel is at a three-year high.

Even in the face of inflation, travel continues to grow as we get back to normal after the temporary declines the industry experienced related to COVID-19. 

For 2024, the most popular types of travel include heading to the beach, visiting friends and family, and exploring cities.

Prepare for Future Consumer Trends in 2024 and Beyond

Find out how Medallia Market Research can help your company stay ahead of changing market dynamics and the latest and emerging trends in consumer behavior, customer experience, and digital experience so you can take action with confidence to capture more market share. 

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The 4 market research trends redefining insights in 2024

3,000+ researchers. 14 countries. And 4 key market research trends shaping the new year. Welcome to the 2024 research trends: The year AI-fueled innovation takes research to new heights.

Market research has never been more critical to an organization’s success than right now, and it’s never been more valued. From increasing market share to developing new products and building enduring brands, organizations are leaning in on the consumer insights provided by market research teams to make smarter, faster decisions.

We’re giving you a taste of the 4 emerging trends from our 2024 Research Trends report. For the full details and strategies, be sure to download the full report.

Download the full 2024 Research trends report here

The top market research industry trends in 2024

Trend 1: market research is ripe for innovation.

Recent advances in artificial intelligence (AI) have changed the way organizations across every industry work, spurring innovation across the board. As teams grapple with how best to utilize new solutions like ChatGPT, market research serves as a blueprint for how to not only use AI-powered tools, but embrace them. And that’s in large part due to researchers having worked hand-in-hand - so to speak - with AI for the past decade. According to our report , when it comes to understanding how to apply AI to their research activities:

• 26% say they feel “extremely confident”
• 46% say “very confident”
• 19% say somewhat confident
• 7% say they are “not very confident” or “not at all confident”

That comfort level has enabled research teams to infuse AI and machine learning into numerous aspects of their work, like task automation and using AI to quickly process qualitative insights from research like survey responses, focus group transcripts, and more, faster than human analysis ever could.

Trend 2: Digital qual opens the door for deep understanding at scale

In a perfect world organizations can support mountains of research, bringing in valuable data without breaking the bank.

Unfortunately, most budgets don’t allow research projects at that scale.

Traditional qualitative research methods like mobile surveys, focus groups, and interviews are costly and take time to deploy, segment, and analyze.

But, in a post-pandemic world, as digital technology continues to evolve, consumers have adopted a more digital-first approach to how they interact with brands and businesses. Inturn, this has caused qualitative researchers to increasingly shift their focus online. And it’s here that organizations can realize the best of both worlds.

How much qualitative research is conducted remotely or online?

Digital solutions like online platforms, social media, and unstructured data analytics offer a way for research teams to conduct market research in a cost-effective way, while achieving more precise customer insights of their target audience.

This ability to drill down allows teams to truly personalize research at a time when consumers and businesses alike are all-in on personalization.

It also opens the door for research teams to increase their emphasis on diversity and inclusivity, while avoiding bias and discrimination, all at a cheaper cost than traditional market research methods.

Ultimately, more research will be completed, and when combined with artificial intelligence, it will be completed faster.

"One of the most obvious changes in market research tools and technologies is the transition from traditional methods, such as surveys, interviews, and focus groups, to digital methods, such as online platforms, social media, and analytics."

Karen Goldstein,

Principal Product Scientist, XM for Strategy & Research, Qualtrics

Trend 3: Better technology + better data = better decisions

Every organization is a collection of decisions.

From which products you build, to how you engage with customers, the decisions you make dictate your direction and invite delight or scrutiny from your customers. The organizations that are winning today are increasingly turning to data to inform their decisions at every level to ensure their next moves are the right ones.

This has placed a large spotlight on market research teams to deliver high quality insights. According to our data, 62% of market researchers say that “ my company depends on our research and insights significantly more today than in the past 2 years. "

Organizations are increasingly recognizing the value of data-driven decision-making by integrating market research data into strategic planning and financial decisions, thereby making their decision-making process more reliable and accurate.

And with that added value comes collaboration. Because market research is no longer an isolated job. Research teams are collaborating with other departments like product development, marketing, and sales to provide timely and actionable insights that inform strategic decisions and improve customer satisfaction.

But, as technology and consumers continue to evolve, data collection has become complicated. Respondents concerned about data privacy are less willing to provide personal information and participants with bad intentions have become skilled at avoiding quality assurance traps.

AI is helping research teams here too.

Businesses are utilizing tools, like an automated data quality solution, to weed out poor responses (think straight-liners and speeders) before data can be analyzed to ensure data integrity. According to our research, 30% of respondents say they already use AI to detect fraudulent activity in surveys.

Data quality can’t be achieved in a vacuum. It needs to be championed throughout every level of your business because good data leads to informed decisions.

Trend 4: The skills gap is widening, and AI can close it fast  

The past few years have seen AI permeate every level of an organization, from HR to sales, delivering competitive advantages to businesses. As mass adoption continues, how we work is evolving and the necessary skills required to complete tasks are being reshaped.

Unfortunately, we’re seeing technology evolve faster than individual skill sets can keep up. According to our data, research teams’ top pressures include:

• Struggling to keep up with new methods
• Increasing demand for research
• Lacking analytical skills to turn data into insights.

This is also translating to increased costs as research teams outsource processes. 33% of the researchers we talked to said the main reason for outsourcing market resource products and services is because their teams don’t have the research skills necessary to manage them internally.

As the rapid adoption of AI shows no sign of slowing down anytime soon, businesses must place a heavy emphasis on reskilling and retooling their teams to meet the moment. Our research shows teams are taking advantage of AI-powered automation to offset the skills gap.

By automating much of the mundane and tedious tasks in a researchers’ day-to-day, teams can shift their focus to more creative, analytical and strategic work that lead to valuable insights and a competitive edge. Tasks like cleaning or formatting data for reports are prime candidates for automation that can free up time for teams to also focus on seeking opportunities for upskilling and better understanding consumer behavior.

Automated market research can be a game changer for any organization, but lacking the skills to fully take advantage of AI-powered tools can halt progress. While there’s no quick and easy solution to closing the skills gap, AI does provide a way to fill in the gaps so you can continue to keep pace with innovation.

Smarter, faster research comes from well-equipped teams

Market research has become more important and more of a priority for businesses as they look to uncover market trends, reduce labor costs, and deliver the right product experiences.

From pricing and ad testing, to customer feedback and brand tracking, research teams empowered to do their best work provide businesses with better insights into ever-changing consumer preferences.

AI tools are giving research teams a more powerful way to analyze consumer behavior and trends and allowing experiences to be personalized for every respondent or participant on any channel like email, mobile, website, social, interactive voice response, chatbots, and more.

Business leaders should continue to not only support market research, but emphasize its importance at every level of the organization.

In our 2024 Research Trends report , you can explore how to do this and more in further detail.

The report features data breakdowns by region and the steps leaders can take to move forward - download your copy of the report, and focus on making smarter, more human-focused decisions fueled by market research

2024 Research Trends Report

Ali Henriques // Global Head of Research Services

Ali is a market researcher by trade, but is now a global, cross-functional leader of Qualtrics’ highly engaged, profitable and innovative research services division. She enables and supports her team to help clients deepen their understanding of their audiences, enhance or cultivate new products/ services or benchmark against competition.

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5 Key Trends in the Consumer Goods Industry to Watch in 2024

by Sarah Schmidt , on August 3, 2023

In this article, we will explore the five top consumer trends shaping the industry, based on the latest market research findings.

1. Sustainable Practices and Ethical Sourcing

As environmental concerns continue to gain prominence, consumers are becoming more conscious of their impact on the planet. This shift in consumer behavior has led to a rise in the demand for sustainable and eco-friendly products. In response, a wide array of forward-thinking consumer goods companies are implementing sustainable practices and adopting ethical sourcing strategies—from Tesla and Starbucks to Unilever and Patagonia.

Of course, companies are not just acting from a sense of moral responsibility alone. Supporting sustainability can also help generate brand loyalty among consumers, according to research from GlobalData.

“There is a correlation between consumers’ level of brand loyalty and a brand’s commitment to ethical and sustainability matters,” explains the GlobalData report Impact of Ethics and Sustainability on Brand Loyalty – Consumer Survey Insights . “Ethics and sustainability influence consumers’ purchasing decisions, so brands who support these matters will gain a good reputation from consumers.”

However, inflationary pressures and the rising cost of living may weaken brand loyalty as consumers are further incentivized to switch to cheaper alternatives.

2. Digital Transformation and E-commerce Dominance

The digital age has reshaped how consumers shop, as the demand for greater convenience and flexibility reaches new heights.

The consumer goods industry has witnessed a massive surge in e-commerce platforms and digital marketplaces. The rise of online grocery shopping exemplifies this influential consumer trend. Online grocery sales in the U.S. nearly tripled in 2020, but sales were also strong in 2021 and 2022 as many consumers continued pandemic-era habits and prioritized convenience, according to the report Online Grocery Shopping: United States by Freedonia Focus Reports.

Grocery shopping will continue to become increasingly digital. “The future of online grocery will feature new technologies like drone and autonomous vehicle delivery, automated warehouses, intelligent voice ordering, virtual reality shopping environments, and better monitoring of product quality and stock,” Freedonia Focus Reports predicts.

Companies that successfully embrace digital transformation are well-positioned to capitalize on this growing trend.

3. Health and Wellness Revolution

In recent years, health and wellness has become paramount for consumers seeking to lead a balanced lifestyle. This trend has given rise to an increased demand for products that cater to individual well-being and address specific health concerns.

“Declining public health is serving as a wake-up call for global consumers,” GlobalData explains in the report Health and Wellness TrendSights Analysis 2022 . “With interest in pursuing healthier lifestyles and maximizing quality of life on the increase, health considerations exert growing influence on the choices of the general population.”

The importance of wellness is impacting a broad range of product categories, including beauty, pet products, food and beverage, and household care. Buzzwords such as plant-based, free-from, organic, clean, natural, non-GMO, vegan, allergen-free, low sugar, whole grain, superfood, and probiotic are all used to attract health-conscious consumers.

4. Personalization and Customization

Consumers today seek products that align with their unique tastes and preferences. This growing desire for personalized experiences has paved the way for customization in the consumer goods industry, and the use of artificial intelligence will only accelerate this trend even more.

“Brands are responding to the consumer desire for greater personalization by giving consumers a broader range of customization options across all kinds of goods and services sold online,” states Euromonitor International in the report Top Five Digital Consumer Trends 2023 . “This enhanced level of personalization has been made possible by artificial intelligence and other technologies that have made it easier for brands to offer custom options on demand.”

A recent example of personalization is Samsung’s Bespoke Home lineup of kitchen appliances , which includes a refrigerator with panels that can be customized with original designs, artwork, or photos. For the product launch, Samsung partnered with artist Matt Jacobson to create generative art prints made with computer algorithms to create one-of-a-kind images for customers.

Euromonitor International notes that customization may not benefit every brand, but it “is a sound strategy for many.”

5. Rise of Influencer Marketing

With the advent of social media, influencer marketing has become a game-changer in the consumer goods industry. Brands are increasingly collaborating with popular influencers to reach broader audiences and build trust among consumers.

Although a popular marketing strategy, relying on influencers can sometimes backfire; take, for example, Bud Light’s partnership with transgender influencer Dylan Mulvaney , which contributed to a 28.4% drop in sales volume for Bud Light amid a social media backlash from conservatives.

In the big picture, though, influencer marketing will remain a powerful force that will continue to expand. The global influencer marketing market is expected to reach $91 billion by 2030, rising at a compound annual growth rate (CAGR) of 26.7%, according to a report by Market Research Future .

Additional Research on Consumer Trends

To get more detailed data and insights,   explore our collection of consumer goods market research sourced from hundreds of leading research firms. These reports provide authoritative and up-to-date information on consumer goods market trends, market sizing, analysis, and statistics.

About the Author:  Sarah Schmidt is a Managing Editor at MarketResearch.com,  a leading provider of global market intelligence products and services.

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Changing consumer preferences: Insights and trends

Lauren Venticinque

Marketing Communications Manager

April 24, 2024

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It goes without saying that consumer preferences are literally always changing. What was true five years ago likely won’t be the case today, and almost certainly won’t be the case five years from now. Knowing that consumer behavior changes is one thing, knowing how and why it changes is another.

Understanding consumer preferences goes way deeper than just vaguely knowing what a customer wants. It means assessing the opinions consumers form about your products and services, based on criteria like quality, price, convenience, and individual preferences. These preferences inform likes, dislikes, and motivations that drive customers to make purchasing decisions, and dictate brands on what to produce and offer.

The key is to always keep ahead of what’s going on in the consumer realm. The best way to go about this is to simply go out and ask them. Do your research. Send surveys. Where are they shopping? What do they expect from brands like yours? What are they spending their money on? Doing all that can be very time consuming though. But don’t worry, we’ve done it for you. 🧐

Consumer preferences: 6 areas to to lean into

Using insights from four separate Bazaarvoice studies — a private label survey, our authenticity research, the shopper preference report, and our renowned Shopper Experience Index — we’ve identified the key consumer preferences you need to understand and focus on this coming year (and beyond!)

1. Rise of value seekers

The primary shift in consumer preferences lies with value-seeking consumers. 73% of consumers globally have confirmed changes in their shopping habits — a pretty massive shift, especially in terms of the customer base you’re trying to retain.

Shoppers across the board are adapting their purchasing behaviors. Essential items needed for survival (groceries, for example) see the least reduction in spending, somewhat obviously. But more surprisingly, there’s a noticeable trend in delaying purchases of practical products, like clothing.

You can win over these shoppers by providing the information they seek in your branded content, and especially in the user-generated content (UGC) you display/syndicate. 62% of shoppers seek value-for-money information within content, relying on feedback from their peers to build trust and inform purchase decisions. The top five factors shoppers look for in UGC are:

• Value for money
• Material quality
• Accuracy of product description
• Real-life appearance
• True-to-size fit

In short, today’s consumers are becoming extra savvy, scrutinizing products in a quest for genuine value. They want to know they’re getting the right product for their money and they’re turning to UGC to find out — so give it to them.

2. Shoppers are open to new brands

As shoppers become savvier and savvier, a unique opportunity is emerging for brands: shoppers are willing to make a switch. Historically, brands have focused heavily on brand loyalty to secure customer retention, but 7 out of 10 shoppers say they’re willing to switch to a new brand — even for the products they regularly purchase.

This provides a window of opportunity for one area in particular: private labels.

Once derided as cheap or tacky alternatives to the bigger labels, private label brands are now considered a genuinely good-value option. And shoppers are flocking to them — 97% of shoppers are open to trying them, according to our private label survey.

Whether your brand offers private labels, distributes them, or competes against them, these insights demand your attention. What were once seen as mere knockoffs are now symbols of decent quality and, at times, a higher consumer preference. You can learn 4 strategies for achieving private label success here .

3. Social shopping is a full-funnel experience

As mentioned above, 70% of shoppers are open to trying new brands. Now’s your chance to stand out where they hang out — and that’s on social. 63% of Earth’s population now use social media.

And it’s no longer just for doomscrolling or jumping on the latest TikTok trend , it’s become so much more than that, and then some. Social media represents a monumental shift in modern shopping interaction — at least according to the 8,000 consumers we spoke to.

Gen Z in particular are instrumental in this social media 2.0. For Gen Z, social media serves as a platform for discovery — 73% of them utilize social platforms to inform their purchasing decisions and 69% of Gen Z individuals also follow brands they either use or contemplate using. Social media is the new search engine.

Given this, it’s essential for you to adapt your social strategy accordingly. And not just for the discovery phase but all the way through the entire conversion funnel , however short or long that will take. 

And before you think to yourself, “It’s only Gen Z, I’d rather focus on bigger market segments,” a) Gen Z wields $350 billion in disposable income , and b) There’s a definite misconception that only Gen Z engages with social media in such extensive capacities. Our research says otherwise.

Every demographic, including those way into their 50s and 60s, use social platforms as part of their purchasing processes. Regardless of target demographics, you’ll need to tailor your approaches to align with changing consumer preferences.

In essence, while disparities exist amongst different generations, they’re far less pronounced than commonly assumed. 

4. Consumers are creators

One of the most interesting consumer preferences at the moment comes in the form of different types of shopper consumers see themselves as. We conducted a survey where shoppers from across the globe were asked to categorize themselves into one of two different shopper types.

Firstly, there’s the “lurkers.” These are individuals who consume content but rarely express their opinions publicly. Aka, they read reviews and look at visual UGC, but they don’t create or post anything themselves. Somewhat surprisingly, 47% of shoppers fall into this category.

The second choice given was “creators.” These are the people who actively create content, like leaving a product review. Over half (53%) of shoppers now identify themselves as creators in various capacities.

This trend highlights the growing importance of the creator economy , which is projected to reach a market size of $7 billion in the coming years. Essentially, this signifies that there’s a wealth of untapped creativity and willingness among shoppers to create UGC about your brand. You just need to go out and ask them:

• 70% of consumers are open to brands sharing their social media post
• 43% of shoppers like to receive emails asking for their opinion on a product they’ve purchased

5. Create authentic content

When it comes to content what really matters is authenticity. Everybody’s looking for authenticity, to the extent that “authentic” was crowned word of the year by Webster last year. So much so that we launched a study asking shoppers what they feel about authenticity.

69% of the respondents to Bazaarvoice’s authenticity survey said that they’re somewhat concerned about encountering things that aren’t authentic and possibly fake online, as Bazaarvoice CMO Zarina Stanford outlines in her presentation on changing consumer preferences below:

Shoppers evaluate whether the content they look at is trustworthy or not using either your online platform, trusted third-party platforms, or signs of authentication like a trust signal (more on that to follow). 

But while they’re (rightly) concerned about trust and authenticity, they don’t feel it’s their job to address it — 63% of consumers think brands are responsible for managing and solving the issues of inauthentic or fraud or fake content online.

Adding to that, when asked whether they feel more if there’s some kind of trust signal — like a logo or a badge — nearly three quarters (73%) of them said yes. An easy way to take charge of the responsibility consumers feel brands have over maintaining authenticity is with a trust signal. For example, at Bazaarvoice many of our clients use the Bazaarvoice Trust Mark .

If you’re a Bazaarvoice customer and haven’t got the Trust Mark on, contact your CS team and they will help you with that! 

Regardless of whether you’re looking at it from a consumer side, from a brand side, or the retailer side, always, always, always take authenticity seriously. Because it’s what your brand equity and safety is anchored on. And consumers won’t do business with you without it.

6. Brand consistency

Expanding on from above, consumers really want to see brand consistency from you. In today’s digital era, 75% of consumers expect a consistent experience from brands. Regardless of whether that’s offline, online, in email, or wherever, they expect it across every channel.

What truly shapes your brand’s reputation is what your shoppers say it is. Safeguarding your brand image and reputation means ensuring a uniform brand experience across all digital touchpoints . This requires embracing and amplifying the voice of the customer, attentively listening to their feedback, and adjusting strategies accordingly.

Whether you have a brick-and-mortar or an e-commerce store, or both, bring in your organic social content and other UGC and display it for shoppers to see across your PDPs, social feeds, in-store ads, and anywhere else your shoppers are.

Unlocking consumer preferences 

When it comes to the changing preferences of today’s consumers, this article is only really scratching the surface. Eager to learn where else you need to lean into to satisfy today’s shoppers? Then watch our on-demand masterclass with Bazaarvoice CMO Zarina Stanford and hear first-hand how your brand can adapt and thrive.

Explore more content on these topics:

More great content.

Amplify content

Community commerce: The next stage of social commerce

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The creator economy: Definition, benefits, and trends

AI content moderation and creation: Examples and best practices 

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Dairy trends unwrapped: Consumers seek added value, scrutinize claims

02-May-2024 - Last updated on 03-May-2024 at 09:26 GMT

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Global consumer research carried out by GlobalData for ingredient supplier IFF has shed light on the latest market and sensorial trends in dairy, with additional functional and environmental benefits and verifiable label claims being a key driver in purchasing decisions.  

GlobalData surveyed 21,000 respondents from 42 countries across Western and Eastern Europe, North America, Central and South America, Asia-Pacific, the Middle East and Africa to identify overarching trends, such as health and wellness, affordability and added value, as well as drivers in product categories such as beverages, desserts, ice cream and plant-based.

One key takeaway is that food inflation has failed to drive consumers away from dairy, with most global shoppers indicating they would rather pay a higher price than settle for average-quality products.

“Dairy has been one of the categories worst hit by inflation, with value CAGR outstripping volume CAGR, and this has been more pronounced in subcategories such as milk, butter and spreadable fats,” Richard Neish, head of global futures, consumer intelligence, at IFF, told us. “It must be said that the majority of global consumers are currently unwilling to sacrifice quality in the face of high prices, with 52% preferring to pay more for dairy to ensure quality is not compromised, and 63% starting to buy, continuing to buy, or more frequently buying expensive or luxury dairy brands in Q4 2023.”

Seeking ‘value with values’ in private label

“Today’s savvy shoppers are increasingly seeking products that offer “value with values” – affordability coupled with quality, safety, ethics, sustainability, and a yearning for simplicity in what feels like an increasingly chaotic world.”

Brands can appeal to budget-conscious consumers by balancing their needs against their values. “This can be achieved by building in additional value such as health, ethical or sustainability benefits, such as by adding probiotics, or by using higher-welfare or locally sourced milk,” Neish explained.

“Furthermore, time-poor consumers put a premium on products that can help them live their everyday lives more efficiently and effectively. For those who prize healthy convenience, versatile products that can be consumed on the go as ‘top-up’ nutrition will appeal.”

Demand is also growing for snack-sized dairy products that offer greater nutritional value, including low-fat cheeses, gut-healthy yogurts and functional dairy drinks, the research shows. Popular trends identified in the survey include low-fat cheese, gut-friendly yogurts and functional dairy beverages.

Ambient dairy innovation is also one to watch, according to the research, with IFF stating that there’s an opportunity for shelf-stable products with added health benefits, such as probiotics.

Putting a positive spin on ‘shrinkflation’

Besides adding value through formulation, brands can attract shoppers to premium ranges by adjusting pack sizes. But with consumers weary of ‘shrinkflation’ – the practice of shrinking the pack size while keeping the product’s price the same or higher - this strategy has to be carefully executed, said Neish. The good news is, there is appetite for smaller packs that balance value with quality.

“Consumer research shows that in 2023, younger cohorts – and Generation Z in particular – were more inclined to choose smaller dairy pack sizes,” Neish told us.

"Busy, often single lifestyles are associated with smaller, convenience-led serving sizes that minimize the risk of waste. At the same time, the typically tighter budgets of younger consumers may deter them from purchasing larger, high-priced packs. This offers a real opportunity for dairy brands to target younger consumers with convenient, smaller-sized products."

“However, if brands choose to boost affordability by shrinking pack sizes, they must clearly communicate this positive value spin to consumers, or otherwise risk being accused of ‘skimpflation’ tactics.”

From indulgence to healthy living and experimentation

With 50% of global consumers willing to reward themselves with pleasurable experiences and through food more than they did pre-pandemic, there’s an opportunity in balancing indulgence with health and wellness. Sugar reduction plays a key part here, as Neish explained. “The most influential megatrend across the food and beverage space since the pandemic has been health and wellness, and it will continue to dominate the dairy sector in 2024,” he said.

“Sugar reduction plays a part in this, with consumers increasingly scrutinizing sugar content and displaying an appetite for lower-sugar products. Research shows that 72% of consumers are trying to reduce or eliminate sugar from their diets, while 32% define healthy foods as being low in sugar.”

And yet, in popular categories such as dairy desserts and ice cream, it’s all about indulgence. “Dairy desserts are very much about indulgence, with consumers demonstrating a strong desire for sensory innovation while also enjoying traditional, nostalgia-inducing products,” Neish said. “This gives brands an opportunity to explore and innovate with classic and novel flavors, and to create exciting textural/multi-textural experiences to engage consumers. Limited editions and co-branding also have appeal and allow brands to push boundaries.”

For most consumers, ice cream is an indulgent comfort food where taste remains king, he added. Traditional flavors are favorite for all consumer demographics, the research showed, but when it comes to unusual and new, trendy flavors, these are most often the pick of younger cohots, particularly Gen Z and Millennials.

“While most customers still prefer traditional dairy flavors, Generation Z and Millennials are particularly keen to experience new and unusual options, with their choices more influenced by social media than older cohorts,” Neish said. “Within this category, balancing indulgence, innovation and value for money is key.”

While social media platforms like TikTok are effective in allowing dairy brands to demonstrate the use of simple ingredients in novel and exciting ways, it’s home cooking which remains the number one vehicle for experimentation, the research suggested. When asked what situations inspire them to try new flavors in food, an average of 52% among Gen Z, Gen Z, Boomers and Millennials said ‘cooking at home’. This was followed by ‘visiting a different country’ (40%) and ‘purchasing from a retail outlet’ (36%).

Gaining trust through transparent label claims

With responsible consumption a major driver for purchasing decisions, the research identified that some consumers doubt brands’ honesty when it comes to their sustainability credentials. According to the survey, while 64% of global shoppers thought that information shared by brands is ‘generally reliable’, 69% ‘somewhat’ or ‘strongly’ agreed that big brands claim to be more eco-friendly than they actually are.

Almost one in three shoppers (32%) thought that small or independent brands were the most trustworthy when it came to their ethical, social and environmental claims, compared to 15% backing private label and 24% - multi-nationals.

Dairy alternatives are also suffering a crisis of consumer trust, with shoppers doubting the positive impact of switching away from dairy.

“While dairy has recently faced scrutiny as media coverage has brought criticism of animal agriculture into the mainstream, consumers are also catching up with the reality that not all dairy alternatives are as “green” as they initially seemed,” Neish explained. “Instead, they are reassessing the validity of health and sustainability claims around, for example, plant-based milk, which is now seeing a significant slowdown in market growth.”

“For both dairy and alt-dairy manufacturers, it’s vital to be transparent and accurate about their environmental impacts, ethical credentials and sustainability commitments, especially in the face of an increasingly strict regulatory environment that is putting claims under greater scrutiny than ever before.”

So, what should brands be doing?

In an age of artificial intelligence (AI) and ever-evolving social and consumer trends, building an emotional connection with the consumer can boost loyalty and repeat purchases, the study suggests. “Dairy brands can engage with consumers to drive “value with values” through story-telling – highlighting authentic environmental, ethical and social credentials that reflect consumers’ concerns and values,” Neish told us.

“As an everyday essential, dairy has not always prioritized such personal engagement with the consumer, but this is changing.”

“Generation Z’s growing influence means dairy companies are realizing the need to build marketing strategies that tell more complex, meaningful stories around trends that matter to a large young audience, including sustainability, authenticity and technical innovation. Key areas for dairy and dairy alternatives to champion include local and ethical sourcing, regenerative farming practices and the use of renewables.”

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The world of ‘ands’: Consumers set the tone

This is an edited version of a presentation given at the consumer goods forum in kyoto, japan, on june 7, 2023..

Leading consumer-facing businesses place a lot of emphasis on listening to consumers, as they should. Consumer sentiment and behavior can be fast changing, confusing, and sometimes contradictory. Today’s consumers, for instance, are both trading down and selectively splurging. They’re buying big, established brands and exploring newer, smaller ones. Many of their buying decisions are a matter of “and,” not “or.”

Staying attuned to these trends in consumer behavior can be difficult for companies, but doing so is absolutely critical—even (or perhaps especially) when the ands seem paradoxical. Quick decision making on how to meet consumers’ expectations in this world of ands must be at the top of a company’s agenda.

In addition, businesses must prioritize a series of ands themselves to grow profitably and outperform competitors. This article outlines the ands that we see playing out in consumer behavior, along with the ands that business leaders need to act on.

Four trends in consumer behavior

Many of the insights I’ll be sharing with you are powered by ConsumerWise , McKinsey’s proprietary solution that tracks and analyzes both consumer sentiment (what consumers say and how they feel) and consumer spending (what they actually do)—thus providing a 360-degree view of today’s consumers. ConsumerWise currently spans ten markets; by the end of 2023 it will expand to 20 markets, covering 90 percent of global GDP. Our latest ConsumerWise research reveals that consumers are engaging in the following four ands . It also reveals that trade-offs are false choices.

Trading down and splurging selectively

Consumers are both flocking to value and buying premium products and services. Worldwide, approximately two in three consumers are trading down by buying cheaper brands or private-label products. In Europe, 84 percent of consumers perceive branded products as having similar quality to private labels . In China, consumers are becoming more value conscious and aggressively seeking discounts and promotions.

At the same time, 44 percent of consumers around the world (and 60 percent of Gen Zers and millennials) say that they plan to splurge, particularly on purchases that are experiential or provide immediate gratification—think restaurants or travel. Regionally, intent to splurge closely aligns with economic optimism: 77 percent of Indian consumers plan to splurge, compared with only 26 percent of Japanese consumers. In short, consumer spending is falling globally, and midpriced goods and services are most at risk. Shoppers who splurge in some categories may seek value in others, which means companies must develop a detailed and nuanced understanding of trends and segments.

Shopping everywhere and all at once

The majority of consumers now use at least three channels  for each purchase journey. And while 75 percent of consumers want a seamless omnichannel experience, only 25 percent are satisfied with the experience that retailers provide. Omnichannel excellence is especially important given that omnichannel consumers are at least 1.25 times more valuable than their single-channel counterparts.

Consumers are also increasingly adopting new shopping channels. More than 60 percent of US and Asian consumers plan to continue using channels that they first tried during the COVID-19 pandemic, such as grocery delivery or social commerce.

Finding comfort in familiarity and exploring brand promiscuity

Traditionally, big brands have dominated the consumer landscape, especially during times of uncertainty. In the US market, big brands grew 50 percent at the height of the pandemic . But consumers are also trying new brands: one in three consumers did so in the past three months. Gen Zers and millennials are especially susceptible to brand switching, as they are five times more likely than older generations to believe that newer brands are better or more innovative than established brands.

In general, consumers are now purchasing a repertoire of products to fill specific needs, instead of purchasing just one product. To illustrate: whereas ten years ago a typical household would have had just one type of milk in the fridge, a household today might buy cow’s milk, high-protein milk, and a plant-based alternative such as almond milk or oat milk—each for a unique occasion.

Demanding sustainability and affordability

Consumers are gravitating toward sustainable products: 84 percent say that sustainability is a very important factor in their purchase decisions. However, 50 percent say they’re not sure whether they would pay a premium for sustainable products in times of inflation.

Still, products making sustainability-related claims are growing faster than products that make no such claims . Companies face the challenge of striking a balance between sustainability and price, which is especially critical in an inflationary environment.

Three business imperatives

In addition to keeping their finger on the pulse of the ever-more-demanding consumer, businesses should respond to these trends with their own ands . Companies need to be uncompromising in the following three areas.

Choose growth and manage uncertainty

Approximately 60 percent of top-performing CEOs  are concerned about an economic downturn. Even amid the highest global inflation since the 1970s, rising interest rates, geopolitical tensions, supply chain disruptions, and volatile commodity prices, investors continue to expect profitable growth above the historical average. Against this backdrop of uncertainty, CEOs have a unique opportunity to make distinctive decisions that lift their companies above competitors. Fortune favors the bold, and pursuing growth must be a conscious, strategic choice .

Companies are more likely to outperform peers when they pursue multiple pathways to growth, including expanding into new categories and new geographies. Changing global demographics, in particular, are unlocking new growth opportunities. Consider that Africa will account for more than half of global population growth in the coming decades, and that GDP for both China and India continues to climb in global rankings. Companies that successfully expand into new geographies are 22 percent more likely to achieve above-market, accretive growth.

Build scale and pursue personalization

Companies that wish to keep up must speed up—and scale up. The pandemic created a greater chasm between retail leaders and laggards : more than 90 percent of growth in retail market cap was driven by 25 large, tech-forward retailers. We expect further market consolidation, accelerated by the end of cheap capital.

But scale must not come at the expense of personalization. The bigger your company, the better you should get at localizing and personalizing your offerings. More than 70 percent of consumers expect personalization  and are frustrated when companies don’t deliver it. Companies that excel at personalization generate 40 percent more revenue from those activities than average players.

Grow your core and expand your ecosystem

Historically, more than 80 percent of consumer companies’ growth  has come from core offerings. Clearly, nurturing the core isn’t optional—and we’ve found, in fact, that many companies underestimate the core’s growth potential.

But as consumer behaviors diverge, companies must seek to become indispensable in consumers’ lives by expanding beyond products and into a range of services. Companies would do well to start pursuing “share of life,” not just share of wallet. Traditional sector barriers are falling; McKinsey research suggests that one-third of global GDP will soon come from ecosystems  (which are networks or partnerships that cut across different industries). And consumers are receptive: for example, 60 percent of European consumers say they’re willing to buy services from retailers they trust . Companies can also tap into B2B opportunities—an excellent example being the rise of retail media networks , which generate a significant amount of incremental revenue and operating margins as well as generating valuable new consumer insights.

Consumers today live in a world of ands —they’re much more demanding and less willing to make trade-offs. Businesses, too, should live in a world of ands . If they take an uncompromising stance on the three aforementioned imperatives, the payoff will be above-average growth and healthy margins.

The author wishes to thank Christina Adams, Kari Alldredge , Ali Bergmann, Dallas Cullen, Warren Teichner , Björn Timelin , and Anja Weissgerber  for their contributions to this article.

This article was edited by Monica Toriello, an editorial director in the New York office.

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2024 Housing Market Forecast and Predictions: Housing Affordability Finally Begins to Turnaround

As we look ahead to 2024 , we see a mix of continuity and change in both the housing market and economy. Against a backdrop of modest economic growth, slightly higher unemployment, and easing inflation longer term interest rates including mortgage rates begin a slow retreat. The shift from climbing to falling mortgage rates improves housing affordability, but saps some of the urgency home shoppers had previously sensed. Less frenzied housing demand and plenty of rental home options keep home sales relatively stable at low levels in 2024, helping home prices to adjust slightly lower even as the number of for-sale homes continues to dwindle. 

Realtor.com ® 2024 Forecast for Key Housing Indicators

Home Prices Dip, Improving Affordability

Home prices grew at a double-digit annual clip for the better part of two years spanning the second half of 2020 through 2022, a notable burst following a growing streak that spanned back to 2012. As mortgage rates climbed, home price growth flatlined, actually declining on an annual basis in early 2023 before an early-year dip in mortgage rates spurred enough buyer demand to reignite competition for still-limited inventory. Home prices began to climb again, and while they did not reach a new monthly peak, on average for the year we expect that the 2023 median home price will slightly exceed the 2022 annual median.

Nevertheless, even during the brief period when prices eased, using a mortgage to buy a home remained expensive. Since May 2022, purchasing the typical for-sale home listing at the prevailing rate for a 30-year fixed-rate mortgage with a 20% down payment meant forking over a quarter or more of the typical household paycheck. In fact, in October 2023, it required 39% of the typical household income and this share is expected to average 36.7% for the full calendar year in 2023. This figure has typically ranged around 21%, so it is well above historical average. We expect that the return to pricing in line with financing costs will begin in 2024, and home prices, mortgage rates, and income growth will each contribute to the improvement. Home prices are expected to ease slightly, dropping less than 2% for the year on average. Combined with lower mortgage rates and income growth this will improve the home purchase mortgage payment share relative to median income to an average 34.9% in 2024, with the share slipping under 30% by the end of the year.

Home Sales Barely Budge Above 2023’s Likely Record Low

After soaring during the pandemic, existing home sales were weighed down in the latter half of 2022 as mortgage rates took off, climbing from just over 3% at the start of the year to a peak of more than 7% in the fourth quarter. The reprieve in mortgage rates in early 2023, when they dipped to around 6%, brought some life to home sales, but the renewed climb of mortgage rates has again exerted significant pressure on home sales that is exacerbated by the fact that a greater than usual number of households bought homes over the past few years, and despite stories of pandemic purchase regret , for the most part, these homeowners continue to be happy in their homes. 

This is consistent with what visitors to Realtor.com report when asked why they are not planning to sell their homes. The number one reason homeowners aren’t trying to sell is that they just don’t need to; concern about losing an existing low-rate mortgage is the top financial concern cited. Our current projection is for 2023 home sales to tally just over 4 million, a dip of 19% over the 2022 5 million total. 

With many of the same forces at play heading into 2024, the housing chill will continue, with sales expected to remain essentially unchanged at just over 4 million. Although mortgage rates are expected to ease throughout the course of the year, the continuation of high costs will mean that existing homeowners will have a very high threshold for deciding to move, with many likely choosing to stay in place.  Moves of necessity–for job changes, family situation changes, and downsizing to a more affordable market–are likely to drive home sales in 2024. 

Shoppers Find Even Fewer Existing Homes For Sale

Even before the pandemic, housing inventory was on a long, slow downward trajectory. Insufficient building meant that the supply of houses did not keep up with household formation and left little slack in the housing market. Both homeowner and rental vacancy remain below historic averages . In contrast with the existing home market, which remains sluggish, builders have been catching up, with construction remaining near pre-pandemic highs for single-family and hitting record levels for multi-family . 

Despite this, the lack of excess capacity in housing has been painfully obvious in the for-sale home market. The number of existing homes on the market has dwindled. With home sales activity to continue at a relatively low pace, the number of unsold homes on the market is also expected to remain low.  Although mortgage rates are expected to begin to ease, they are expected to exceed 6.5% for the calendar year. This means that the lock-in effect, in which the gap between market mortgage rates and the mortgage rates existing homeowners enjoy on their outstanding mortgage, will remain a factor. Roughly two-thirds of outstanding mortgages have a rate under 4% and more than 90% have a rate less than 6%.

Rental Supply Outpaces Demand to Drive Mild Further Decline in Rents

After almost a full year of double-digit rent growth between mid-2021 and mid-2022, the rental market has finally cooled down, as evidenced by the year-over-year decline that started in May 2023 . In 2024, we expect the rental market will closely resemble the dynamics witnessed in 2023, as the tug of war between supply and demand results in a mild annual decline of -0.2% in the median asking rent.

New multi-family supply will continue to be a key element shaping the 2024 rental market.  In the third quarter of 2023, the annual pace of newly completed multi-family homes stood at 385,000 units. Although absorption rates remained elevated in the second quarter, especially at lower price points, the rental vacancy rate ticked up to 6.6% in the third quarter. This uptick in rental vacancy suggests the recent supply has outpaced demand, but context is important. After recent gains, the rental vacancy rate is on par with its level right before the onset of the pandemic in early 2020, still below its 7.2% average from the 2013 to 2019 period.  Looking ahead, the strong construction pipeline– which hit a record high for units under construction this summer –is expected to continue fueling rental supply growth in 2024 pushing rental vacancy back toward its long-run average. 

While the surge in new multi-family supply gives renters options, the sheer number of renters will minimize the potential price impact. The median asking rent in 2024 is expected to drop only slightly below its 2023 level. Renting is expected to continue to be a more budget friendly option than buying in the vast majority of markets, even though home prices and mortgage rates are both expected to dip, helping pull the purchase market down slightly from record unaffordability. 

Young adult renters who lack the benefit of historically high home equity to tap into for a home purchase will continue to find the housing market challenging. Specifically, as many Millennials age past first-time home buying age and more Gen Z approach these years, the current housing landscape is likely to keep these households in the rental market for a longer period as they work to save up more money for the growing down payment needed to buy a first home. This trend is expected to sustain robust demand for rental properties. Consequently, we anticipate that rental markets favored by young adults , a list which includes a mix of affordable areas and tech-heavy job markets in the South, Midwest, and West, will be rental markets to watch in 2024.

Key Wildcards:

• Wildcard 1: Mortgage Rates With both mortgage rates and home prices expected to turn the corner in 2024, record high unaffordability will become a thing of the past, though as noted above, the return to normal won’t be accomplished within the year. This prediction hinges on the expectation that inflation will continue to subside, enabling the recent declines in longer-term interest rates to continue. If inflation were to instead see a surprise resurgence, this aspect of the forecast would change, and home sales could slip lower instead of steadying.
• Wildcard 2: Geopolitics In our forecast for 2023 , we cited the risk of geopolitical instability on trade and energy costs as something to watch. In addition to Russia’s ongoing war in Ukraine, instability in the Middle East has not only had a catastrophic human toll, both conflicts have the potential to impact the economic outlook in ways that cannot be fully anticipated. 
• Wildcard 3: Domestic Politics: 2024 Elections In 2020, amid the upheaval of pandemic-era adaptations, many Americans were on the move. We noted that Realtor.com traffic patterns indicated that home shoppers in very traditionally ‘blue’ or Democratic areas were tending to look for homes in markets where voters have more typically voted ‘red’ or Republican. While consumers also reported preferring to live in locations where their political views align with the majority , few actually reported wanting to move for this reason alone. 

Housing Perspectives:

What will the market be like for homebuyers, especially first-time homebuyers.

First-time homebuyers will continue to face a challenging housing market in 2024, but there are some green shoots. The record-high share of income required to purchase the median priced home is expected to begin to decline as mortgage rates ease, home prices soften, and incomes grow. In 2023 we expect that for the year as a whole, the monthly cost of financing the typical for-sale home will average more than $2,240, a nearly 20% increase over the mortgage payment in 2022, and roughly double the typical payment for buyers in 2020. This amounted to a whopping nearly 37% of the typical household income. In 2024 as modest price declines take hold and mortgage rates dip, the typical purchase cost is expected to slip just under $2,200 which would amount to nearly 35% of income. While far higher than historically average, this is a significant first step in a buyer-friendly direction.

How can homebuyers prepare? 

Homebuyers can prepare for this year’s housing market by getting financially ready. Buyers can use a home affordability calculator , like this one at Realtor.com to translate their income and savings into a home price range. And shoppers can pressure test the results by using a mortgage calculator to consider different down payment, price, and loan scenarios to see how their monthly costs would be impacted. Working with a lender can help potential buyers explore different loan products such as FHA or VA loans that may offer lower mortgage interest rates or more flexible credit criteria. 

Although prices are anticipated to fall in 2024, housing costs remain high, and a down payment can be a big obstacle for buyers. Recent research shows that the typical down payment on a home reached a record high of $30,000 .  To make it easier to cobble together a down payment, shoppers can access information about down payment assistance options at Realtor.com/fairhousing and in the monthly payment section of home listing pages. Furthermore, home shoppers can explore loan products geared toward helping families access homeownership by enabling down payments as low as 3.5% in the case of FHA loans and 0% in the case of VA loans .

What will the market be like for home sellers?

Home sellers are likely to face more competition from builders than from other sellers in 2024. Because builders are continuing to maintain supply and increasingly adapting to market conditions, they are increasingly focused on lower-priced homes and willing to make price adjustments when needed. As a result, potential sellers will want to consider the landscape for new construction housing in their markets and any implications for pricing and marketing before listing their home for sale.

What will the market be like for renters?

In 2024, renting is expected to continue to be a more cost-effective option than buying in the short term even though we anticipate the advantage for renting to diminish as home prices and mortgage rates decline. 

However, for those considering the pursuit of long-term equity through homeownership, it’s essential to not only stay alert about market trends but also to carefully consider the intended duration of residence in their next home. When home prices rise rapidly, like they did during the pandemic, the higher cost of purchasing a home may break even with the cost of renting in as little as 3 years. Generally, it takes longer to reach the breakeven point, typically within a 5 to 7-year timeframe. Importantly, when home prices are falling and rents are also declining, as is expected to be the case in 2024, it can take longer to recoup some of the higher costs of buying a home. Individuals using Realtor.com’s Rent vs. Buy Calculator can thoroughly evaluate the costs and benefits associated with renting versus buying over time and how many years current market trends suggest it will take before buying is the better financial decision. This comprehensive tool can provide insights tailored to a household’s specific rent versus buying decision and empowers consumers to consider not only the optimal choice for the current month but also how the trade-offs evolve over several years.

Local Market Predictions:

All real estate is local and while the national trends are instructive, what matters most is what’s expected in your local market. 

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