Each year, consumer behavior continues to evolve, shaped by a combination of economic, social, and technological factors. The Committee for Economic Development (CED) recently convened a CEO Trustee roundtable to discuss these trends in 2024 and their implications for our consumer-based economy.
This blog will summarize some of the key takeaways from The Conference Board and what these trends mean for CPG organizations, and more specifically, market research and insights teams within those organizations.
Economic Factors Impacting Spending
Higher Spending, Higher Debt: A robust labor market, increasing wages, and higher purchasing power have led to increased spending. Simultaneously, credit usage has risen, resulting in higher personal debt.
Deposit and Debt Balances: Banks’ deposit balances have fallen, but debt levels remain high compared to historic levels.
Inflation Concerns: Rising prices and inflation impact consumer choices.
Wealth Impact on Spending: Higher consumer spending is influenced by increased wealth from higher global asset prices and government spending.
Rising Essential Expenses: Essential expenses like food costs are increasing, leading consumers to seek out deals and reduce waste.
Consumer Shopping Preferences
Psychological Shift: The pandemic, geopolitical tensions, and uncertainty have altered consumer psychology. Many now adopt a “live today, spend today” mindset, especially among the younger generation.
Experience-Seeking: Consumers prioritize experiences. While essential expenses rise, people seek deals, shop at bargain retailers, and opt for smaller package sizes.
Sustainability: Consumers appreciate sustainability, although it’s not always the primary driver of purchases. Transparent communication about price increases is crucial.
Social Indicators: Consumers prefer companies with good working conditions and equitable pay. Brands that address climate change and educate customers stand out.
Health and Wellness: Increased purchases in health-related products and small indulgences (like ice cream) persist from pandemic times. Consumers prioritize self-care, seeking products and services that enhance well-being.
Connection Matters: Consumers value connection more than ever. Brands that foster socialization and community-building resonate. Brands leveraging zero-party data for personalized experiences gain an edge.
Home-Centric Living: The pandemic has shifted focus to home life. Expect continued interest in home decor, organization, and comfort.
Savvy Shopping: Bargain hunting, secondhand shopping, and seeking out deals remain popular.
Social Commerce: As social media continues to grow in popularity, platforms like TikTok become hubs for social commerce.
Implications for CPG Organizations and Research Teams
Shifting Consumer Preferences: Consumer preferences are constantly evolving, with a growing emphasis on sustainability, transparency, and health-conscious choices. This means that market research teams must conduct constant, comprehensive consumer studies to understand these shifting preferences and identify emerging trends and opportunities in the marketplace.
Impact of Economic Factors: Economic factors such as inflation, rising debt levels, and fluctuations in disposable income can significantly influence consumer spending patterns. Market research teams should closely monitor economic indicators and conduct regular consumer surveys to gauge sentiment and forecast changes in purchasing behavior.
Demand for Personalization: Consumers are increasingly seeking personalized products and experiences tailored to their individual preferences and lifestyles. Insights teams should leverage data analytics and consumer segmentation techniques to identify niche markets and develop targeted marketing strategies that resonate with specific consumer segments.
Importance of Sustainability and Social Responsibility: Sustainability and social responsibility have become key factors driving consumer purchasing decisions. Market research teams should collaborate with product development and marketing teams to assess consumer perceptions of sustainability initiatives and identify opportunities to enhance brand reputation through transparent and authentic messaging.
The Need for Customer Connection
If there’s one takeaway from this blog, it’s the dynamic nature of consumer preferences and shopping habits – and because of that, it’s crucial to establish a sincere connection with your customers to understand these changes and satisfy your customers.
“These 2024 consumer trends underscore the necessity for brands to prioritize genuine connection over mere transactions. Insight Communities allow organizations to forge that deeper connection with consumers and gain invaluable insights into emerging trends, shifting values, and evolving expectations. In 2024 and beyond, leveraging such communities is essential for delivering personalized experiences that resonate on a profound level – just like consumers desire,” says Rick Kelly, Chief Strategy Officer at Fuel Cycle.
It’s clear that in 2024, personalized experiences and authentic connections are valued more than ever. By building a dedicated community of engaged customers to listen, learn, and respond to, customer feedback becomes a more integral part of all your processes, from product development to marketing initiatives to brand experiences. Real customer data backs smarter decisions, and smarter decisions bring better results.