Consumer behavior shifts are a result of changing market conditions, macro & microeconomic dynamics, and good old-fashioned influence.
So, businesses can only do one thing – keep up. But that in itself requires knowledge of raw consumer behavior, current trends, and more.
That’s why I analyzed some of the most notable consumer behavior trends you can expect in 2024.
Let’s dive right in.
Consumer Behavior Trends to Watch in 2024
The biggest change in consumer behavior today is obvious – a shift towards online shopping and e-commerce.
Retail e-commerce sales today have exceeded $6 trillion in value across the world; here’s how that is shaping 2024.
1. People want experiences, even from product-based companies.
Call it modern-day hedonism, but most people today now prefer good experiences over anything else.
It’s been a while since people have been shifting towards experiences in general; traveling, restaurants, concerts, and outdoor activities have overtaken consumer wants.
But now, consumers are also expecting an experience from product and service-based companies instead of just utility.
This isn’t technically new, but you see this expectation from most products now, even common items like bread.
For example, Le Fournil des Saveurs is an organic bakery in Northern France that sells the promise of nutritious organic bread that also keeps local farmers in business, while not being detrimental to the environment.
If you’re more curious about the intricacies of creating a ‘bread experience,’ there’s a complete UX process of creating an online bakery by Jessica Adamowicz.
My point is, regardless of your product or service today, an experience-first approach is what’ll get you in the competition – notice how I say ‘In’ and not ‘Ahead.’
2. Baby boomers are now doing more scrolling and online shopping.
Boomers in general have been slow to the digital adaptation of consumerism.
The ones who did adapt have largely been on Facebook (Meta).
However, recent surveys show that more and more baby boomers are using Instagram and TikTok.
This increase in usage of video-based apps has also increased the rate at which boomers are shopping online.
Research from GWI shows that boomers are now more likely to buy new products online each week.
Since they have higher purchasing power compared to Gen Z, they are now making up a decent majority of online buyers.
That means brands now need to include boomers as a target audience in their marketing strategies.
3. Marketers will need to focus on sensory regulation to avoid overstimulation.
A McKinsey report found that the US saw ten years’ worth of growth in the e-commerce space during Q1 2020.
The pandemic forced 75% of consumers to try different websites, brands, and stores.
Meanwhile, we’ve also seen the rapid rise of short video platforms like TikTok, Reels, and ByteDance.
Point is, all this rapid change led to the overstimulation of consumers.
The pandemic alone led to changing work patterns, social habits, and isolation which means people were exposed to more content.
The lack of physical touch meant that consumers were only getting stimuli through light and sound.
Experts like sensory historian Mark Smith believe this led to a sensory revolution.
Overabundance of input while browsing today has become the norm but that doesn’t mean it shouldn’t be fixed.
It leads to problems like unpredictable triggers which messes up data, making it harder to market to audiences.
But marketers are beginning to exercise sensory regulation now. Occupational therapists believe such a change requires years, but we can expect it to start from 2024.
4. Consumers will actively look for a human connection in your AI strategies.
AI is taking a foothold in almost every industry now and machine learning and complex programming will only make us more dependent on it.
It’s the leading trend everywhere but I think it’s going a bit too fast for the majority of consumers.
AI can be super efficient, resolve redundancies, and save time and money, but it can’t provide a good customer experience.
Sure, you can program certain instances, add some entertainment, or include custom conversations.
But at the end of the day, you’ll always have outliers. And I’m not talking about the long tail of a normal distribution; more often than not, people won’t connect to the AI.
High-demand and common-use products will always sell but if you offer specialized products and services, a human connection is necessary.
But with the rate of saturation with common-use products, a human connection can be the differentiating factor to beat the competition.
5. Consumers are less likely to give feedback now, so brands need to listen in new ways.
Traditional methods of feedback are present, yes, but they’re going out of fashion.
Not because of businesses but because consumers aren’t giving feedback like they used to.
I’ve seen people change brands because of minor issues rather than giving feedback to get it resolved.
That is what happens in hyper-saturated markets. Qualtrics found that almost two-thirds of consumers will not tell a brand that they’ve had a bad experience.
And, 50% of consumers tend to stop spending with a brand after a bad experience.
That is why companies need to listen to feedback in other ways like on social media platforms, review sites, forums, and direct calls & chats.
6. Consumers still have a distrust of AI but they still use it.
AI is now present in most industries and places; chances are, if you’ve used website chats, you’ve talked to AI.
What’s weird to me is that people absolutely know they’re talking to AI but they still do it.
Maybe because they don’t see an alternative?
Because HubSpot’s research found that 36% of consumers distrust any content put out by AI.
Only 26% of consumers actually trust any content that is written using AI.
Meanwhile, 38% are unsure which, in my books, means they would rather just talk to an actual person.
That said, AI has become a necessity in the workplace; not to rely on it but to use it to eliminate redundancies and make work more efficient.
So, businesses need to put more effort into either making their consumer-facing AI more ‘human’ or convincing customers that the AI is trustworthy.
Consumer Shopping Behavior Trends
The pandemic shifted a lot of consumers to online shopping and that shift hasn’t slowed down since.
More often, you find businesses catching up to digitize their stores and offer services on multiple platforms.
7. Consumers expect an e-commerce-first business.
Physical stores still have a lot of importance and demand, but customers today expect an e-commerce component.
For some, it’s because they’d rather buy it online but for a large part of the audience, they like to check products and prices online before visiting a physical store.
Therefore, the digitization of businesses is, without question, a necessity today.
For most product and service offerings anyway. Currently, the global retail e-commerce sales value has exceeded $6 trillion.
And, e-commerce sales make up more than 20% of the total global retail sales value.
So, even if you think your business doesn’t need it, create an e-commerce variant of it.
8. Consumers are trading down, but also splurging on selective things.
For the most part, consumers are looking towards value when buying things now.
Call it the economy, changing shopping behavior, or just the natural cycle of consumerism.
McKinsey found that two in three consumers are trading down to buy cheaper brands now.
What’s interesting to me is that 84% of European consumers now think of branded and private-label products in the same light.
Even Chinese consumers are becoming more value-conscious with most seeking promotions and discounts.
But still, a lot of people still want to splurge; albeit on very selective items.
The McKinsey report found that 44% of people who said they want to splurge want to do so on things that either provide an experience or immediate gratification.
What specific things does this splurging include? I would say traveling, eating out, buying subscriptions, etc.
9. Social commerce is gaining a lot of popularity, especially with Gen Z.
It’s natural for every trend to evolve which is why we’re now seeing the next evolution of e-commerce – social commerce.
Social shopping is not limited to any single group but a huge majority includes Gen Z and millennials.
But that could simply be attributed to them being more online.
At any rate, with influencer marketing, social media ads, and social promotions, social commerce is gaining to overtake traditional e-commerce.
HubSpot found that 17% of people bought a product through social media during their three-month sample period.
Millennials, Genz, and Gen X made the majority, respectively.
The same report also found that social media users tend to send DMs for customer support instead of calling official numbers.
What I’m trying to say is, that you’re not only missing out on a lot of business if you don’t sell on social media, you’re also losing customers that would rather contact you through the same platforms.
10. Consumers are buying local, especially when it comes to gifts.
According to JungleScout, 85% of shoppers have changed their spending habits due to rising prices.
People are even cutting back on expenses that come with holiday decorations, travel, and gifts.
I believe the current inflation rate is a big reason for this. But on the bright side, this means lots of new business for local businesses.
Make no mistake, Amazon, Walmart, and Target are still the top locations and online stores for gift-buying.
But I want you to notice the 125% increase in buying from specialty/local stores and the increased buying from Etsy.
11. Consumers will consider visiting shops and buying in the metaverse.
I say metaverse because that’s the best way to describe a large-scale VR/AR presence today.
The metaverse itself has been a hit-and-miss since Meta’s Reality Labs division has effectively lost around $46.5 billion since 2019.
But still, just because it hasn’t kicked off until now doesn’t mean it won’t in the coming year.
A VR/AR marketplace is a natural progression when you consider today’s technology.
It’s going to become common. There are going to be pop-up shops in these virtual worlds.
And consumers will visit them. This is not a question, it’s an actuality. If it isn’t the metaverse, it’ll be another virtual world.
How can businesses prepare for that? My recommendation is to brush up on your Web3 knowledge, for starters.
Expert Insights on Consumer Behavior Trends
If you’re wondering what it takes to become an expert on consumer behavior, it’s a mix of knowing the history of consumerism and the ability to analyze buying behavior.
But that’s just my super simple explanation.
Michael Solomon, an expert in the field, believes that today, consumer behavior research is more proactive – people are focused on influencing consumer behavior rather than understanding it.
Most experts take the consumer culture theory as the baseline; it views consumer behavior research from a social and cultural standpoint rather than an economic exchange.
Therefore, most expert insights revolve around this belief. For example, Mark Sandys, Diageo’s Chief Innovation Officer believes that a wave of neo-hedonism swept consumers after the pandemic as people shifted their focus towards experiences.
So, it makes sense to use CCT to gauge consumer behavior as people are now letting social and cultural matters influence their purchase decisions.
That is why brands are shifting towards providing experiences, better customer service, and consumer-specific offerings.
“I’d argue that investing in a better customer service apparatus and maintaining high-quality products will yield long-term gains and customer loyalty.”Mike Mardis, Director of Marketing at Finch
While I know there’s nothing new in that, it’s still important to reiterate so companies don’t lose focus.
Digitization is still the highlight of consumer behavior in 2024. Technology like AR/VR and AI is now an expectation but at the same time, consumers want a ‘human touch.’
On top of that, consumers expect experiences from brands, regardless of the product or service, even if they’re spending less.
Other than that, social commerce is becoming the norm with most audiences.
At the very least, it starts the buyer journey which is why companies are investing so much in attribution software today.
Overall, I’d say the state of the economies, markets, and current consumer behaviors are a ripe opportunity for SMBs and local businesses.