<h3><em>In this article:  </em></h3><p><em>Much has been written about consumer trends in retail, particularly in a post-pandemic world. In the US, a recent report from McKinsey has revealed a complex landscape where shoppers are navigating between essential spending and indulgence, leading to nuanced changes in purchasing behaviour.  </em></p><p><em>Despite steady consumer confidence, there's a notable shift towards cautious spending, reflected in decreased purchases per trip across various categories. This poses a number of challenges for retail brands in particular, as consumers seek affordability without compromising on indulgence. McKinsey's findings indicate a preference for authenticity and emotional connections, driving the importance of understanding consumer motivations.  </em></p><p><em>As consumers prioritise essentials while splurging on treats, brands must adapt by fostering loyalty and engaging in genuine interactions with customers. Social media and online channels play a crucial role in influencing purchasing decisions, highlighting the need for brands to curate authentic experiences and leverage user-generated content. Amidst economic uncertainties, brands that prioritize customer-centric strategies and cultivate brand advocates are poised to thrive in an evolving consumer landscape. </em></p><p><em>In this article, we explore these themes in greater depth </em></p><h3>The rise of the cautious consumer  </h3><p>US consumers are shifting their purchasing behaviours, spending more but buying less. US CPG volume declined <a href="https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/consumers-spending-more-to-buy-less?stcr=E6900831853E4CA1924D9FF616631156&cid=other-eml-alt-mip-mck&hlkid=fe40ede3d6f34b33aa23d6e8cc2e1b79&hctky=14979558&hdpid=2616dfda-de31-4b1b-b4a3-b4419af44b74" target="_blank">2 to 4 per cent on average</a>. Items purchased per trip declined by <a href="https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/consumers-spending-more-to-buy-less?stcr=E6900831853E4CA1924D9FF616631156&cid=other-eml-alt-mip-mck&hlkid=fe40ede3d6f34b33aa23d6e8cc2e1b79&hctky=14979558&hdpid=2616dfda-de31-4b1b-b4a3-b4419af44b74" target="_blank">3 to 5 percent</a> across grocery, health and beauty, and household categories, while shopping frequency remained the same or increased. This shift, though subtle, can have big implications for retail and consumer-packaged goods (CPG) brands. </p><p>It’s clear that purse strings are being tightened on essential items, from groceries and vitamins to holidays, but consumers are determined not to miss out, with an increase in emotional spending and impulse buying. They’re spending less on household necessities like food but splurging on meals out in restaurants. Or trading down, buying cheaper and buying less on the basics, but continuing to indulge in luxury goods. Consumers want it all – affordable essentials and treat items.  </p><p>It creates a confusing landscape, especially for retail or CPGs. The key to survival is understanding why the behaviour is shifting and ensuring your brand is at the forefront of consumers' minds when it's time to purchase. How do you do that? Listening to your customers and employing authenticity as a brand value is one way to survive.</p><p></p><figure style="text-align: center"><div data-img-caption-container="true" style="display: inline-block; text-align: center;"><img src="https://eu-images.contentstack.com/v3/assets/bltc0d0a8caf49440b8/bltabc3e22d8fd330fd/65e72e527abf16040b40a6d1/US_consumer_trends_mckinsey_image-min.png" alt="US_consumer_trends_mckinsey_image-min.png" height="auto" style="text-align: center;" /></div></figure>

<h3>Splurge mentality </h3><p>The McKinsey Consumer Wise Global Sentiment Data discovered that as inflation remained high, consumers indicated they’d spend cautiously and prioritise essentials such as baby supplies and gasoline, while reducing spend on semi-discretionary items, such as skin care and vehicles. 46% of people asked said they planned to spend less on jewellery and 36% said they’d spend less on footwear in the next three months.</p><p>That said, many consumers reported planning to purchase treat items, with Gen-Z’ers expressing the highest intent to splurge in the next three months <a href="https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-state-of-the-us-consumer" target="_blank">(63% Gen-Z versus 38 per cent overall)</a>. Consumers expressed an even higher intention to splurge on dining out than any other category, with 38% of all respondents saying they intend to spend more money on dining out, going to restaurants or bars.</p><p>It's not always easy to pinpoint what’s fuelling a shift in consumer behaviours, though price is clearly an aspect that’s affecting decision-making. <a href="https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-state-of-the-us-consumer" target="_blank">Reasons that consumers</a> gave for reducing purchase volumes of groceries include: </p><ul><li>Price increase – 78%</li><li>Waiting for items to go on sale – 50%</li><li>Can’t afford as much as they used to due to economic reasons – 41%</li></ul><p>With each price increase and additional economic pain points, the pressure is on brands to prove their worth and offer customers a valuable exchange that satisfies their high-consideration purchase.</p><h3>The ‘<a href="https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-world-of-ands-consumers-set-the-tone" target="_blank">yes, and</a>’ consumer and how to make sure they pick you </h3><p>Consumers may be tightening their purse strings when it comes to essentials, but they’re not willing to sacrifice the enjoyment of luxury items or treats. With each purchase costing more on average and inflation on the rise, they want to make sure they’re making the right purchasing decisions. People are still willing to purchase, they just want to make sure it’s going to be the right purchase for them.</p><p>That’s where the value of authenticity, connecting your customers and listening to their feedback comes in. Verified reviews can offer all three of these. Feedback from genuine customers who’ve engaged with your brand provides insights not just to you as a brand but to other people just like them about the nuances of what they love about your product or brand.</p><p>Amongst other strategies that <a href="https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/consumers-spending-more-to-buy-less?stcr=E6900831853E4CA1924D9FF616631156&cid=other-eml-alt-mip-mck&hlkid=fe40ede3d6f34b33aa23d6e8cc2e1b79&hctky=14979558&hdpid=2616dfda-de31-4b1b-   b4a3-b4419af44b74" target="_blank">McKinsey</a> recommends for CPG players to combat volume declines, they cite investing in building brand loyalty saying that:</p><p>“While it may be tempting to step back from wide-ranging brand marketing to focus solely on performance marketing, where sales impact is often directly measurable, consumer goods companies should still invest in consumer acquisition and loyalty. Building “brand love” may be the best way to <a href="https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/for-us-consumers-its-a-matter-of-and-not-or" target="_blank">entice cautious consumers</a> to add items to their physical and digital shopping carts.”</p><h3>The conversations you can’t reach</h3><p>Discovery on social media and online channels hasn’t gone away. Consumers are stepping away from bricks and mortar and seeking online channels. <a href="https://www.gwi.com/connecting-the-dots/seen-on-social" target="_blank">41% of Gen Z and millennials</a> make an impulse purchase online every 2-3 weeks, rising to 48% daily in TikTok users. It opens the door to more impulse, emotion-led purchases, which is where the most powerful heuristic comes into play. 79% of people are more likely to choose a brand at the consideration stage if they have high brand awareness, which makes it vital for brands to get their customers talking about them. And 43% of consumers are more likely to buy a new product when learning about it from friends on social media. People, more than ever, are looking for like-minded others to guide them in their purchasing decisions. They no longer want to find out about a product directly from the brand. They want to hear from people like them with needs like theirs.</p><p>This makes it all the more vital for brands to take control of their reputation and showcase themselves as an authentic brand – from responding to negative reviews to making valuable changes based on customer feedback. Displaying verified, authentic user-generated content in reviews and giving your customers social proof where they need it the most can boost your brand recognition and reputation in the conversations you can’t reach. Brands can also support consumers internet research stage by hosting features such as Q&amp;A next to their online products, where their experts can answer consumers pre and post purchase questions.</p><p>While consumers prefer to make their purchases online, it does have its downsides. Ever heard of the phrase try before you buy? Shoppers can’t do that online. While many shoppers overcome this by buying to return (trying it on and sending back what they don’t need), this isn’t a suitable solution for retailers who will lose profit. That’s where verified, unfiltered customer feedback comes in handy. Honest comments from real-life people who have the same concerns as you when it comes to the nuances of the fit, for example. Feefo’s verified reviews model and additional features that enable brands to <a href="https://www.feefo.com/uk/business/features/consumer-insights" target="_self">run sentiment analysis</a> on their customer comments, or <a href="https://www.feefo.com/uk/business/features/display-reviews" target="_self">display reviews</a> by common themes on their websites, can help provide this sense of community to online consumers’ seeking pre-purchase advice.</p><p></p><h2 style="text-align: center;">Americans are 23% more likely to value authenticity than the global average</h2>

<p></p><h3>Provide a Value Exchange </h3><p>It’s harder for today’s consumers to part with their hard-earned cash. That means brands have to work much harder to prove their worth – whether that’s with values that resonate with their consumers, such as <a href="https://www.feefo.com/uk/business/features/treefo">sustainability initiatives</a>, with a desirable price point or high demand product, or lastly, proving themselves as a customer-centric company.</p><p>Brands looking for real, lasting value that’ll help them grow would be smart to focus on becoming customer centric. But how do they do this? Easy: listen to your customers, respond and make real, valuable changes based on the insights you gain. Don’t just respond to the positive, address the negative, listen to what your customers are truly telling you and give them a response that they feel truly satisfied with.</p><p>At Feefo we believe the strongest tool to engage your customers and create loyal brand advocates is with a Value Exchange. It means offering something of value back to your customers. Do you want their data? Show them why their voice matters. Do you want their insights? Show them you’re listening to what they value. Do you want their comments on your products and services? Don’t just listen, act. Your customers want to help others like them gain the insights that helped them make their purchase, but why should they? Give them the place to share their views, show them you care, but more importantly, show them how their feedback is making a difference to your business and customers alike.</p><h3>Build brand love </h3><p>Your existing customers are more likely to repeat purchases than new customers. And, if you’re able to turn a repeat customer into a loyal advocate they’ll be doing much of your marketing work for you, sharing and celebrating your wins with their biggest fans. 79% of companies that create brand advocates see an increase in cross-selling and upsell figures, and 50% of all buying decisions are driven by peer-to-peer marketing.<wbr> When consumers see others recommending a brand, they are more likely to trust and purchase from that brand.<wbr></p><h3>How can you use advocates in your marketing tactics?</h3><ul><li>Your advocates are micro influences. Their feedback is altruistic, and they will always have a more powerful impact than paid influencers. Ensure you’ve got the tools to give your advocates space to discuss your brand and engage with their community </li><li>Embrace user-generated content. By encouraging customers to share their experiences with a brand, companies can create a library of content that can be used to promote their products or services across consumer platforms like social media. <wbr>It’s also great for SEO. </li><li>Be in control of your reputation. Empowered consumers can make or break a brand’s reputation. By creating advocates, businesses can improve their online reputation by generating positive reviews and ratings.<wbr></li></ul><h3>Surviving a shift in trends</h3><p>As consumer confidence increases and economic uncertainty lessens, we may well see the number of consumer purchases increasing once again. But brands that want to stay ahead of the game, especially consumer-packaged goods players and retailers, need to engage tactics to soar ahead in a landscape where consumers are making greater emotive purchase decisions. Thinking about how they can use advocacy and customer feedback to generate brand love is the only way to win.</p>

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US Consumer Trends 2024

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<p>Thanks to the wild world of social media and influencers, the never-ending drama of politics, and the growing chorus demanding real action on sustainability (side-eye to those businesses pretending to be green), trust is now the make-or-break for brands. And let's not forget the AI revolution – as tech gets smarter, consumers are demanding more than just innovation. They want transparency, authenticity, and a bit of real talk. In this digital age, if you're not keeping it 100, you're not keeping your customers.</p><p>Now, everyone knows that predictions are hard. But sometimes it’s even harder to resist the temptation. So, we’re going to make a prediction: this year, the issue of trust (particularly online) will become more pertinent than ever.</p><p>Not just in relation to the everyday things we do online, like shopping or banking, but trust in the people and institutions that govern our societies, too.</p><p>This year will continue to be dominated by the US presidential election. The past two such elections were hotbeds of online campaigning. Social media was an important tool for engaging with voters, news organisations, and campaign teams. Sadly, it was also used to sow discontent and disinformation – phrases like ‘fake news’ and ‘<a href="https://www.forbes.com/sites/lbsbusinessstrategyreview/2017/05/22/the-post-truth-world-why-have-we-had-enough-of-experts/?sh=601352f854e6" target="_blank">post-truth era</a>’ became part of everyday life.</p><p><a href="https://www.cfr.org/blog/ten-elections-watch-2024" target="_blank">More than three dozen countries, with a total population of around four billion people</a>, will hold a major election in 2024. According to a 2021 survey from the OECD, <a href="https://www.oecd.org/governance/trust-in-government/" target="_blank">only around 40% of people trust their national governments</a>. The same survey found that levels of trust in government among younger people are even lower.</p><p>Whether or not you subscribe to the view that democracy is under threat, it’s reasonable to assume that trust is about to come under fire – from all directions.</p><h2>Beyond the political arena</h2><p>As much as we now take things like ecommerce and banking apps for granted, trust is the absolute foundation of the online economy. Whether we’re talking about the physical or the digital, business or personal, from the political realm to where you choose to buy your lunch, we’re all looking for the same thing. A reason to trust.</p><p>But according to Wired: “<a href="https://www.wired.co.uk/article/bots-online-advertising" target="_blank">Bots are polluting the internet. Fake online users make up as much as 40% of all web traffic</a>."</p><p>On social media platforms, the blue tick became synonymous with verification, although some of the shine may have worn off that recently. More broadly, the use of HTTPS along with TLS/SSL certificates to show a website is using up to date encryption, has helped consumers feel confident about online shopping. Privacy statements, cookie usage details, data protection regulation – you name it, there is a lot of great work that’s been done to make it possible for consumers to verify who they are dealing with.</p><p>The problems of fakery, however, persist. Like some dreadful, digital version of Whack-a-Mole, almost as soon as one avenue is closed off to them, those who seek to trick, trap, and generally try the patience of consumers online, find other ways to pop up when least expected.</p><h2>Openness and transparency</h2><p>The Digital Markets, Competition and Consumers Bill has now (as of January 2024) <a href="https://bills.parliament.uk/bills/3453" target="_blank">reached the committee stage in the House of Lords</a> and is expected to enter the statute books before the end of the year.</p><p>If and when it is passed, this new Act will, the government says: “Ensure that consumers and traders <a href="https://www.gov.uk/government/news/government-clampdown-on-fake-reviews-and-hidden-fees-to-help-customers-cut-the-costs-of-living" target="_blank">continue to benefit from reviews that represent a genuine experience</a>, while stamping out the purchase and sales of fake reviews, and ensuring firms take an appropriate level of responsibility for reviews on their websites.”</p><p>A separate report from the UK Department for Business &amp; Trade suggests that: “<a href="https://assets.publishing.service.gov.uk/media/6447c00c529eda000c3b03c5/fake-online-reviews-research.pdf" target="_blank">For all ecommerce platforms widely used by UK consumers, we estimate that 11% to 15% of all reviews for (consumer electronics, home and kitchen, sports and outdoors) are fake</a>.”</p><p>Put simply, to stay on the right side of consumer law, it’s in everyone’s interests to start getting this stuff right sooner rather than later. That means we all need to be able to verify that the opinions and information we’re being fed can be safely consumed.</p><p>That applies just as much if you’re a marketing manager trying not to waste money advertising to bots, or a shopper relying on reviews from so-called ‘shoppers like you’ as part of your decision-making process.</p><p>If your business isn’t currently being robust about something as simple as cracking down on fake reviews, it’s not too late to make an addition to your list of 2024 objectives.</p><p>Start by examining your current reviews strategy and try looking at it through the eyes of a brand-new customer. How recent are your reviews? Are they easy to access and easy to understand? Is it possible to filter or refine them? And is it abundantly clear that those reviews were left by verified customers? We’ve created a handy guide on the <a href="https://www.feefo.com/uk/business/resources/business-insights/the-importance-of-understanding-consumer-behaviour-for-business-insights" target="_self">importance of understanding consumer behaviour</a> for business insights which might be worth a quick read too.</p><p>Helping people find trustworthy information is one of the things we do best at Feefo. It’s also one of the things we’re proudest of. If that sounds like something that might help your customer reviews strategy run like clockwork, why not drop us a line?</p>

In 2024 we trust – or do we? 

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Consumer trends in 2024 and how are they changing?

<h2>What is consumer behaviour?</h2><p>Consumer behaviour is how individuals and groups make decisions to purchase, use, and dispose of products, services, ideas, or experiences. It involves examining the various factors and influences that shape a consumer's choices, including psychological, social, cultural, and economic elements.</p><h2>Why is understanding consumer behaviour important?</h2><p>By delving into consumer behaviour, you can understand who your customers are, how they behave, and why. It involves examining several key aspects, including:</p><ul><li>Demographics</li><li>Competitor interactions</li><li>Brand loyalty</li><li>Habits</li></ul><p>Understanding how consumers behave can be beneficial in many ways, including:</p><h3>Gaining insights into competitors</h3><p>By looking at how consumers interact with your competitors' products or services, you can uncover their strengths and weaknesses. This knowledge empowers your business to strategically position itself in the market, identifying areas where you can outperform competitors and target unmet customer needs.</p><p>For example, if you're in the smartphone industry and you notice competitor reviews of customers wanting longer battery life, you can focus on developing phones with exceptional battery performance. By aligning your product with this specific customer preference, you can capture their attention in a crowded market.</p><h3>Improving customer satisfaction</h3><p>By identifying customer pain points, preferences, and expectations, you can address them and improve their overall experience with your products or services. This heightened satisfaction not only leads to loyalty but also encourages repeat business and even <a href="https://www.feefo.com/us/business/resources/customer-retention/guide-to-brand-advocacy" target="_self">brand advocacy</a>. When customers consistently receive what they need, they're more likely to choose your brand over competitors, return for future purchases, and even recommend your products or services to others. </p><h3>Targeted marketing campaigns</h3><p>By segmenting your audience based on their behaviour and interests, you can create more personalised and relevant marketing messages that resonate with potential customers.</p><p>This personalised approach to content, recommendations or offers not only increases customer loyalty and retention but also fosters a deeper connection between you and your customers. </p><h3>Reducing wasteful spending</h3><p>Understanding consumer behaviour allows businesses to allocate their resources more efficiently by directing marketing efforts toward channels and strategies that align with consumer preferences. This minimises wasteful spending on ineffective campaigns, ultimately optimising the return on investment. </p><p>For example, if a makeup company identifies that its target audience prefers social media influencers for product recommendations, it can allocate a larger portion of its marketing budget to influencer partnerships.</p><p>To learn more, read our guide on <a href="https://www.feefo.com/uk/business/resources/customer-retention/consumer-insights" target="_self">how to succeed with customer insights</a>.</p><h2>The four types of consumer behaviour</h2><p>Here’s a breakdown of the four types of consumer buying behaviour and their implications for businesses.</p><p><p>1. Habitual buying behaviour</p></p><p>Habitual buying means repeatedly buying a particular product or service without much thought or consideration. Common examples include everyday items like toothpaste or laundry detergent. Consumers typically stick to familiar brands or products, making quick and automatic purchase decisions. </p><p>There isn't much brand loyalty involved, as consumers often choose based on convenience and familiarity rather than a strong attachment to a specific brand.</p><p>2. Variety-seeking buying behaviour</p><p>Variety-seeking behaviour happens when consumers actively look for new and different products or services. They enjoy trying out various options and might switch between brands or products frequently. For instance, they might want to try a new crisp flavour or a different brand of smartphone.</p><p>For businesses, this behaviour suggests the need to innovate, introduce new offerings, and create marketing campaigns that attract consumers looking for novelty and variety.</p><p>3. Complex buying behaviour</p><p>Complex buying behaviour is characteristic of situations where consumers face significant purchase decisions that involve high levels of risk or investment. It often occurs when buying expensive products like cars, houses, or advanced technology. Consumers usually undertake extensive research, evaluate multiple options, and consider various factors, like features, pricing, and reviews, before making a decision.</p><p>Businesses encountering complex buying behaviour should focus on providing detailed information, showcasing reviews to build trust, and offering exceptional customer support.</p><p>4. Dissonance-reducing buying behaviour</p><p>Dissonance-reducing behaviour frequently comes into play when consumers begin to feel a bit uncertain or regretful after making a significant purchase. To ease those feelings, they look for reassurance and validation. They might chat with friends, read reviews, or do some extra research to confirm that they made the right choice.</p><p>Businesses may offer warranties or return policies to help ease customer doubts and build trust in their decision. Providing transparent information, like reviews and detailed product descriptions, can also help with this.</p><h2>What influences consumer behaviour?</h2><p>There are many factors that drive consumer behaviour, the main ones being: </p><h3>Personal interests</h3><p>People often gravitate toward products, services, ideas, or experiences that match their personal preferences. </p><p>For example, when exposed to an advertisement for a new camera lens, a photography enthusiast is more likely to make a purchase compared to someone who has never owned a camera.</p><h3>Age</h3><p>Age is a crucial determinant of consumer behaviour, playing a pivotal role in shaping how individuals and groups make choices when buying, using, or disposing of various offerings. </p><p>For instance, <a href="https://www.marketingdive.com/news/gen-z-relies-on-influencers-for-purchase-decisions-kantar-says/582890/" target="_blank">research</a> found that 44% of Generation Z consumers have made purchase decisions based on social influencer recommendations, compared to 26% of other age groups. Therefore, if Generation Z is your target audience, influencer marketing is likely to be particularly effective.</p><h3>Income</h3><p>Income levels are a fundamental component of consumer behaviour as they determine purchasing power and accessibility to different products and services. </p><p>Someone with limited expendable income may tend to exhibit complex or dissonance-reducing buying patterns, which involve more extensive research or occasional post-purchase regrets. In contrast, individuals with higher incomes often have the financial freedom to make more impulsive or diverse purchase decisions.</p><h3>Group influence</h3><p>The opinions of the people around us, like friends, family members, and even colleagues at work, can significantly influence our buying decisions. In fact, <a href="https://www.junglescout.com/consumer-trends/" target="_blank">Jungle Scout</a> found that 56% of consumers are influenced by posts shared by friends and family.</p><p>For example, when someone is planning to buy a new smartphone, their friend's positive experience with a particular brand or model might sway their choice.</p><h2>How reviews impact customer behaviour</h2><p>Reviews are a powerful tool in shaping purchasing decisions, as they provide authentic insights into products, services, and brands. Positive reviews can instil confidence and trust in potential customers, steering them toward making a purchase. In fact, research by <a href="https://www.dixa.com/blog/3-important-statistics-that-show-how-reviews-influence-consumers/" target="_blank">Dixa</a> discovered that 93% of customers will read online reviews before making a purchase. </p><p>Conversely, negative reviews can deter prospective buyers and redirect them to alternatives. <a href="https://www.nosto.com/blog/consumer-behavior-stats/" target="_blank">Nosto</a> found nearly 58% of people won't purchase from an eCommerce store if it doesn't display customer reviews. This is even more significant with Gen Z (64%) and millennials (60%).</p><p>At Feefo, we provide businesses with verified reviews, ensuring that potential customers know they come from people who have genuinely experienced your product or service. According to the <a href="https://www.feefo.com/uk/business/resources/customer-retention/consumer-trends" target="_self">Feefo Consumer Report 2019</a>, 50% of consumers are more likely to trust a brand with authenticated reviews. </p><p>Read our guide on <a href="https://www.feefo.com/uk/business/resources/business-insights/what-makes-a-review-verified-and-why-it-matters" target="_self">what makes a review verified and why it matters</a> to learn more.</p><h2>Start collecting customer feedback with Feefo</h2><p>To learn more about how Feefo reviews can support your business and enhance your digital advertising efforts, <a href="https://www.feefo.com/uk/business/enquiry/get-in-touch" target="_self">get in touch</a> with our team of experts today. </p>

US Consumer Trends 2024

The ‘and’ landscape, emotional spending and how US shoppers are spending more cautiously.

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