Market Research Trends to Conquer 2023
Market Research trends didn’t shift all that much over the course of the year. But, there are some that became far more prominent than others.
As an essential component of any business strategy, Market research is knowledge. And as we all know, knowledge is power. lThe right research tells you who your customers are, what they need and want, and what they expect from your business. While market research itself is extensive, knowing market research trends is almost equally important.
Surely, you can’t rely solely on in-person audience questionnaires and surveys as your entire strategy anymore. This isn’t the 60s. We’ve evolved and so has the world, so you can’t expect to use the same strategies forever.
That’s where knowledge of trends in market research can help you. Let’s cover some of the top market research trends for 2023 so you can meet your customers where they are and grow your business.
Trend 1. Artificial Intelligence (AI)
Businesses are blessed with massive amounts of data to analyze customer needs. But the vastness is a double-edged sword. How do you collect and analyze such vast amounts of information promptly while still conducting other essential business tasks?
Shocker: AI isn’t one of the most recent trends in the market research industry. Companies have used it for the past decade, but it is now more commonplace, more widely adopted, and smarter than ever.
Human capital isn’t enough to compile, organize, and analyze datasets from every possible source; that’s where AI can help. AI and machine learning do the heavy lifting, saving you both time and money in labor costs. Imagine seeing deep insights across millions of datasets laid out for you within minutes. Magic.
On top of the improved efficiency, AI offers more room for innovation in the types of data you can collect in your research. Today, Emotion AI analyzes facial expressions, eye movements, voices, and other non-verbal cues to figure out how a customer feels about something. These valuable insights can complement a customer survey – or replace it if it’s found to be more accurate.
Innovators beware, though. AI isn’t a complete replacement for human capital, it’s a supplementary tool. You still need people to brainstorm growth strategies and apply insights to business day-to-day. And yes, this even applies to the latest craze to rock the internet, ChatGPT.
Bottom line? AI is one of the most important market research industry trends to scale your business and reach your customers, but use it in tandem with strong talent.
Trend 2. Mobile app intelligence
With the average person opening a mobile app 11 times per day, and over 90% of mobile time now being spent on apps – there’s no doubt that apps can impact almost every business, in one way or another. The ability for organizations to monitor and track app intelligence is no longer a nice-to-have, but a must. The need for mobile app intelligence is rising across all industries, globally.
With the ability to see web and app traffic together, it’s easy to spot how consumer behaviors are changing: and it allows leaders and analysts to measure the impact of apps in their market. For those looking to rule in (or out) app investments, this provides the data needed to inform those decisions. With a complete view across the digital landscape, organizations can track how the new era of mobile-first consumers spend their time and money online.
With technology driving increased demand for apps and disruptive start-ups entering almost every sector, rapid market shifts are fast becoming the norm. App intelligence gives people the ability to spot emerging threats and take action when and where it’s needed. Without the complete picture, decisions around growth and strategy are only partially informed, which could impact outcomes further down the road.
Trend 3. Humanity in customer experience
Market research trends sometimes shift the type of data we collect from our customers. In 2023, it’s not enough to capture technical markers like age, location, and gender. Today’s customer expects a personalized customer experience, and you can’t give it to them without knowing psychographic data . What’s their attitude towards, well, everything? Are they introverted or extroverted? You also want to learn where their values lie and align yours with theirs.
After that, you use those deep personal insights to infuse more humanity into their experience. You might send a check-in email asking them if their last purchase helped them solve a problem. Or, you’ll refer to them by name when your chatbot addresses them online.
Bigger shopping carts, higher sales, and improved profit margins, according to 40% of executives surveyed by Forbes .
Trend 4. Social listening
Social listening tools have been around for a while. So, why is social listening one of the latest trends in the market research industry? One reason is the emergence of the Metaverse, which may plug your customers online even more.
Another key qualifier is real-time. Real-time social media competitive analysis will set you apart from the competition. You should always be aware if your customers attribute your content to a negative social issue, for example.
Find actionable insights from online conversations and monitor social engagement metrics . Keep track of brand mentions of course, but also common search terms and phrases. Reminders and alerts will help you stay on top of the ever-awake social media landscape.
Trend 5. Inclusive research
ESG (environmental, social, and governance) is becoming a must for businesses, with government provisions of ESG growing to 74%. But the important part is the return – environment, social criteria, and ethical governance considerations add up to 63% in equity returns . One way to promote stronger social consideration is through more inclusivity in hiring and research.
Market research inclusivity is one of the latest trends in the market research industry. The truth is, old ways of market research didn’t adequately capture a diverse audience. You can’t use the same panel provider every time and expect diverse results. Nor can you ask the same survey questions and use the same demographic markers to categorize your audience.
Inclusive research requires curiosity.
- Who are your unique visitors ?
- Which groups seem omitted from your analysis?
- How can you uncover more diverse audiences with your current tactics?
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Trend 6. Monitoring adjacent markets
You might not expect new trends in market research to include consideration of an entirely new market altogether. But COVID-19 showed us the importance of a business’s quick ability to pivot, and you can’t do that if you don’t understand adjacent markets.
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Consider this: A world event destroys your business. Your target audience can’t afford your product anymore, or they don’t need it. How do you recover? Maybe you focus on a new, niche audience . Or, you figure out how you can change your product offering to better meet your current customer needs.
Uber is a great example of a business that included adjacent markets in its research. While traditional ridesharing became less common throughout the pandemic, the adjacent food delivery market boomed – and Uber took full advantage.
Lesson to learn? When you conduct your market research, squeeze in time and budget to learn about customers in adjacent markets – it could save your business
Trend 7. Market-tech audits
How many platforms do you use to conduct market research? Martech continues to emerge with new companies offering the latest innovations – but that doesn’t warrant jumping on all of them.
A market-tech audit is one of the most essential trends in market research today. The last two years have made it so easy to adopt multiple techniques and software to no avail – it’s time for an audit.
Think about which solutions overlap in function. Are you doubling the work and struggling to cut out redundancies throughout your research? Is the tech you invested in to find efficiencies actually slowing down your workflow?
Dissect every solution and focus on ones that provide robust data analytics.
Trend 8. Consumer and brand value alignment
The latest generation of customers (Gen Z) cares about your brand identity and business values.
Today, customers want to invest in businesses with values aligned with their own. If your target audience values environmental sustainability, you better demonstrate that in your brand values and policies.
A fancy mission statement isn’t sufficient. Customers will catch on quickly if your outward appearance doesn’t match your daily operations. One way to keep up with this market research trend is with social listening. Keep track of how your brand values are being discussed on social media – maybe there’s room for some revision, or a renewal of vows, if you will.
The result? Customer loyalty overdrive.
Trend 9. Automation and efficiency
Companies can find more efficiencies by hopping on market research trends of AI and market tech audits, of course. But there’s more to automation than those two tools. AI helps you sift through more information to find insights, sure. But where else can you find efficiency?
One way is to cater to the mobile-first generation with shorter, smarter surveys. The average person doesn’t have the capacity or interest to sit through a 30-question questionnaire. Find your mobile audience and give them the shortest, yet richest survey possible. You’ll find more efficiency if you narrow down your data to the most important.
Back to AI. Market research isn’t all exciting insights and analysis. A lot of it is tedious – collecting research, organizing and categorizing information, sending follow-up emails, and much more. The latest trends in market research demand that you automate these time-consuming tasks. Free up your time to do more meaningful work.
Market research trends: in summary
The latest trends in the market research industry echo slowly-building trends from the last couple of years as well as introduce completely new ways of conducting market research.
Here’s the truth: market research has never been so exciting! Implementing AI, inclusivity, social listening, and humanity within strategies will take your market research to new levels. But without keeping track of market research trends, you can’t use any of it to your advantage.
The solution? Leverage market research trends to propel your business forward. You’ll find new customers and show your current ones that they’re important.
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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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