In 2024, global purchasing power is reaching new heights. Consumers are expecting a lot more from retailers. Understanding the latest consumer behavior trends and formulating your business model around them can lead to a better brand reputation, more sales, and higher repurchasing rates.
Keeping up to date with these trends can be incredibly important but often difficult and time-consuming. That’s why our experts at Business2Community compiled an extensive list of the latest consumer behavior trends so you can utilize them to your advantage and stay ahead of the game.
Key Consumer Behavior Trends
- The percentage of people with two or more digital wallets increased from 51% in 2021 to 62% in 2022.
- 80% of consumers are willing to pay more for ESG-related products.
- The value of subscription services is expected to reach $687 billion by 2025.
- Nearly two-thirds of Gen Z-ers use social media to find new products, compared to just 22% of Boomers.
- A good experience in a physical store will encourage 63% of consumers to spend more.
What are 2024’s Consumer Behavior Trends?
Statista estimated the output value of the consumer market will be $24.74 trillion in 2024. The number is projected to reach $43.03 trillion in 2028, implying a CAGR of 14.23% in the same period.
The rapid growth rate gives businesses a huge incentive to utilize emerging trends to reap the most benefits.
1. Sustainable Products are Driving Consumer Demand
Today’s consumers care a lot more about environmental responsibility compared to a few decades ago. Environmental, social, and corporate governance (ESG) is a huge driving force in shaping 2024‘s consumer behavior trends. More consumers are searching for greener and socially responsible brands.
According to McKinsey’s 2023 research, from 2018 to 2022, products with ESG-related claims showed a 1.7% higher CAGR than products without.
Among the spending categories sampled, the food and personal care sectors garnered the most interest from consumers in seeking ESG products. Consumers believed sustainable products are better in quality as well.
32% of businesses said sustainable products generated between 51% to 80% of their total sales volume. These companies also saw between 32% to 34% repeat rates, meaning their customers would buy from them at least 3 times annually.
The more ESG claims a product had, the better it performed in the study. Products with 4 ESG claims led to a 2.5 times higher CAGR than products with just 1 claim, given that the claims had genuine impacts on society and the environment.
However, the report found no particular correlation between any type of ESG and sales. The increase in sales was likely the effect of multiple ESG claims (vegan, synthetic leather, etc.) and the overall company image combined, rather than the effort of a single ESG label.
The PwC 2023 Global Consumer Insights Pulse Survey found that 80% of consumers were willing to pay more for sustainable products. More than 40% claimed they would pay a premium of 10% or more.
Brands with ESG claims tend to attract more regular customers. As people value self-care and associate sustainability with premium quality, this new trend is here to stay.
Considering your target audience, you can follow government regulations and social standards to build a more environmentally friendly production process to please your customers.
2. Subscription Services are a Big Consumer Behavior Trend Among Millennials
In the past few years, subscription services have taken off. Many consumers enjoy the seamless buying experience to get their products delivered and services renewed automatically.
Statista estimated the ecommerce digital subscription market to be worth $225 billion in 2020 in the ecommerce sector. The number is set to exceed $687 billion by 2025.
The same PwC survey found that, among those who planned to sign up for new services, 30% were Millennials. From groceries to fashion to health products, they showed a great interest in subscribing to various services.
Their top reasons for choosing subscription services were:
- Convenience (51%)
- To save money (47%)
- Build a consistent lifestyle (42%)
- Customized services (41%)
- To try new products (41%)
3. Millennials and Gen Z Prefer Buying Through Social Media
Younger generations tend to be on their smartphones browsing social media most of the time. Their frequent use of social media has become another hot trend in consumer habits in 2024.
HubSpot surveyed 600 consumers in 2023 to study their buying decisions and behaviors. The survey revealed that 64% of Gen Z-ers and 59% of Millennials used social media platforms for product discovery, compared to just 22% of Baby Boomers.
As young consumers prefer social media channels to make their purchase decisions, small businesses can partner with micro-influencers in their target market to boost sales and expand their reach at affordable costs.
4. Search Engines Remain the Most Important Channel for Product Discovery
From the earliest days of the internet, consumers have been using it to find new products. It remains one of the most powerful channels for brands to market themselves.
Looking at the same HubSpot survey, it stated that 86% of consumers found search engines to be the most effective tool for discovering new products while 53% voted for social media.
Search engine optimization (SEO) has become incredibly important for brands as people rarely go beyond the first page when searching for a product. Brands that show up on the first page get the most visits and sales.
Mobile devices (54%) were the most common devices consumers used when searching for information, followed by computers (35%) and tablets (11%). Brands with an optimized website for smartphones could attract more visits and deliver a more positive online shopping experience.
Other than paid ads, optimizing your content for search engines on both mobile and desktop is an effective and affordable strategy to gain visibility for your brand in 2024.
5. Digital Wallets Make it Easier for Customers to Pay
In 2024, digitalization is key. Customers want a smooth buying process where they can browse, order, and pay all at once on the same device, and digital wallets come in handy.
McKinsey’s 2023 Digital Payments Consumer Survey found the digital payment penetration rate to be 89% in 2022.
The percentage of people with two or more digital wallets also increased from 51% in 2021 to 62% in 2022. The rapid growth signifies consumers’ demand for more payment options from retailers.
Digital payments were mainly used online (73%) and in-app (58%), although in-store (25%) digital payments and peer-to-peer (44%) transfers also saw a rise. Overall, consumers were increasing their use of digital wallets.
When choosing a digital payment, respondents noted the following elements to be the most important:
- Store loyalty (43%)
- Functionality (41%)
- Discount deals (26%)
- Integration with other financial services (23%)
With the rise of digital payment options, buy now, pay later (BNPL) has become a massive hit with consumers.
According to the Accenture Payments Survey 2022, 6% of consumers used BNPL at least 5 times a month with 62% believing it could replace their credit cards.
BNPL offers flexibility in payments, allowing customers to enjoy the product first and pay later. BNPL users believed it could improve their financial well-being when dealing with rising prices and bulk purchases.
Integrating multiple payment options into your website and stores can increase consumer spending, with up to 70% of consumers having higher basket totals when this option is available.
6. Artificial Intelligence and Virtual Reality Are Enhancing the Shopping Process
Consumers are often fascinated by new technologies and react more positively when they see cool features during their buying process.
Incorporating AI and virtual reality in the shopping process can facilitate buying decisions for consumers and reduce return rates.
The same PwC research we looked at earlier found that shoppers were willing to engage AI to assist their shopping journey. They mainly interacted with AI for:
- Product information (44%)
- Customer support (35%)
- Updates about promotions/products (34%)
- Personalized recommendations (31%)
Respondents found chatbots to offer high-quality services that answered their questions.
McKinsey’s Next in Personalization 2021 Report stated that 71% of customers wanted personalization in their shopping experience and 76% became frustrated if the retailer did not offer it. Through machine learning, AI can deliver superb personalized experiences for your audience.
Cloud computing service providers like AWS offer business owners customized packages to analyze zero-party data points provided by their customers to curate the most intimate shopping experience.
Virtual reality and alternate reality (AR) are also trending tools that increase satisfaction rates and reduce return rates. Furniture retail giant IKEA has been using AR for years to assist customers. Users can use the app to see how a piece of furniture aligns with their home style and measurements before buying.
@tiarame_ontop IKEA#AR
7. Positive In-Store and Online Shopping Experiences Encourage Repurchases
COVID-19 gave rise to tremendous online shopping opportunities for businesses. While online buying is still here to stay in 2024, impeccable offline shopping experiences can encourage customers back to physical stores.
According to the State of Consumer Behavior 2023 by Raydiant, over half (51.1%) of survey participants preferred online retail like social commerce, and 48.9% preferred shopping in brick-and-mortar stores.
The top reasons for shopping online included:
- Because I can shop anytime or anywhere (29%)
- Because I do not need to go anywhere or leave home (25%)
- Because it’s faster (11%)
- Because it’s easier to access discount codes and tools or apps (11%)
- Because it’s easier to compare prices (10%)
Although consumers enjoy shopping online, they equally value in-store experiences. 92% of respondents said having superb physical assistance was an important factor for returning.
Consumers reported that having in-store exclusive offers was the best way to bring them into the store, with over a third (34%) noting this in the survey.
Additionally, 55% of consumers also expressed willingness to spend more if the in-person experience was good.
As shoppers set higher service standards, brands need to work on meeting the demands. Business owners who can offer an intimate and memorable experience will be able to gain customers’ trust and generate more leads.
How to Find Consumer Behavior Trends
Consumers needs and demands change over time, and it’s up to your business to stay up to date. Along with our long-term trends discussed here, you need to keep your finger on the pulse of consumer desires, so here are some ways you can make sure you know what’s going on in your industry.
Company Surveys and Reports
Large-scale surveys and well-researched reports from reliable sources are always an efficient way to find consumer behavior trends. International consulting firms like PwC and Raydiant regularly conduct useful surveys on different topics to help small businesses understand trending consumer habits.
2. Podcasts
Other than reading reports, podcasts are a fun approach to keeping yourself informed about new trends. The McKinsey on Consumer and Retail Podcast, funded by McKinsey, dives deep into consumer behaviors in various industries.
From revealing holiday shopping expectations to analyzing successful new brands, the podcast discusses elements that influence purchasing decisions for customers.
Test Your Audience
Occasionally, you may come across contradicting survey results. For example, one piece of research can show that people are spending less on fashion while another shows an increased demand for clothing services.
To identify the accurate traits in your target group, testing your own audience is often the best way forward. Trial a few strategies like offering discounts for subscription services, influencer marketing, and developing sustainable products. Measure the metrics and see which tactic speaks well to your audience.
The Future of Consumer Behavior
Brands are constantly working to capture a bigger share of the industry. Companies that can predict future trends and adjust accordingly will have an edge in attracting new customers and refining the company image.
Based on 2024‘s trends, here are some final predictions for the future:
- Online retailers will continue to see rapid growth as people spend more time on their smartphones.
- Consumers will continue to make social responsibility a major deciding factor.
- AI will take on more tasks in analyzing consumer behaviors and customizing services for clients.
- More businesses will work on expanding their payment options.