Consumer behavior trends for 2023

Welcome to our inaugural release of Numerator Visions, an annual perspective that looks back at the past year, provides forward-looking insights into the year to come, and serves as a starting point for deciding what to do next.

Every year, we will share several visions for the future of US consumer trends and what industry leaders and executives should be prepared for. We create these visions by drawing on our comprehensive understanding of the consumer, which we gain through Numerator’s full suite of products.

Throughout the last few years, business leaders have primarily focused on short-term, tactical and operational needs. However, many of the changes we anticipate in 2023 will be driven by shifting consumer needs and the market dynamics affecting them, as supply constraints are expected to become more stable, inflation lets off the gas pedal, and COVID-19 becomes less of a concern to consumers. Based on the trajectory of 2022, we identified three core visions that act as north stars for leaders as they make decisions throughout 2023.
The COVID-19 pandemic altered our perceptions of health and wellness, but as time goes on, consumers are returning to their normal routines. However, Americans must deal with an underlying trauma due to the pandemic, as most feel the country is not yet in a post-COVID world. Brands will need to closely monitor consumer behavior and be ready to adapt as public health concerns evolve. Consumers are trending towards treatment over prevention, such as during the last quarter of 2022, when flu, RSV, and COVID-19 cases increased. As China and other countries relax COVID policies in 2023, it will be crucial to track how demand for treatment categories might shift in the US. Additionally, all consumers are seeking a more balanced approach to health and mental wellness. This universal shift is an opportunity for brands to market products as providing mental comfort and fulfillment.  Long-term, investing in R&D for nutrition-based products will foster growth, as younger consumers focus more on nutritional and whole-body wellness. Emerging categories such as protein water, kombucha, and prebiotic & probiotic sodas are gaining popularity among Gen Z households and should act as inspiration for innovation in 2023.
Retail went through a lot. In 2022, the industry witnessed an inventory overload, eCommerce slowdown, and a $24.6 billion dollar deal, resulting in a wake-up call for many retailers. One word defines the new retail landscape in 2023: competitive. Brands will need to compete on price and value as private label market leaders rebound in share. Retailers should stay agile and focus on promoting to the right consumers as sales events become the norm. Digital teams must further expand the definition of quick commerce to drive growth in the online space and invest in Grab & Go technologies to keep ahead of consumer expectations. As the merger of Kroger and Albertsons goes through review in 2023, leaders should prepare for potential changes in the retail industry by closely monitoring price, shoring up eCommerce, and developing strategies to retain shoppers from divested stores and reduce cannibalization between operating stores.
As 2023 unfolds, leaders must prepare their teams for potential economic headwinds due to elevated consumer financial concerns. To grow while consumers retreat and move ahead of the market, brands must keep a close eye on economic indicators such as consumer sentiment, retail sales, and inflation within their categories. Organic growth through households and occasions is mission critical. Brands must build penetration targets with core audiences and develop comprehensive consumer profiles. Finally, a generational strategy to defend against economic headwinds will create resiliency for categories. As Gen Z lament housing prices, they turn to comfort foods, while Boomers have bunkered down and rationalized their snacking.
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In the full report, you will discover more about the three visions and what it means for your brand. More insights include:

  • What private label brands are poised to grow in 2023
  • Why protein water and prebiotic sodas are paving the way for health & wellness
  • How Gen Z and Boomers are reacting differently to the current economy

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