Four Transformative Visions for 2024
Mind the consumer income divide.
2023 defied expectations of consumer spending. Households splurged on experiences such as movies and concerts which contributed to US GDP growth. However, as savings get used up and consumers become more deliberate with their purchasing, understanding occassions at home will be an imperative:
- A rise in at home experiences: General merchandise such as sports and home & garden have posted positive volume growth for the first time in 2023
- Affordable indulgence: Limited-service restaurants have grown traffic by 13% in the latest month, year over year.
However, some consumers already feel the pinch. Low-income homes have already pulled back volume purchasing the most as legislative impacts on SNAP and student loans have hit driving financial concerns up by six percentage points year over year. Brands must navigate changing financial perspectives of consumers across income ranges, particularly as low-income households face disproportionate challenges.
Empower the physical self.
Leaders should adopt a more physical and proactive approach to health and wellness by utilizing functional foods and mobile apps to meet consumer demands in 2024.
2024 marks the start of over 1 in 3 consumer prioritizing their physical well-being– up 13 percentage points compared to last year. This consumer trend is universal across all incomes, generations and ethnicities. However, a focus on physical health is manifesting in several ways:
- Greater awareness of overall health through more homes getting annual check-ups and physicals– up 5 percentage points compared to last year.
- Leveraging mobile apps to help track the foods they eat and their mental health.
- Consumers are almost twice as likely to prefer getting nutrients from food over supplements.
- Utilizing weight loss innovations such as GLP-1 agonists to curb food consumption.
Be proactive with retail change.
Retailers are fighting for lower prices to appeal to consumer demands as over 79% of brands that grew sales also increased prices in 2023. Private label is emerging as a winning solution, often at the expense of established brands, and over $1 billion worth of unit share has moved to brands such as Great Value, Aldi and Kirkland Signature. Brands must strengthen price pack architectures and refine value propositions to stay competitive.
However, other macro trends, from mergers and acquisitions to shifts in mobility, could pose challenges for specific retail channels such as:
- Gas & Convenience: Traffic to the channel is normalizing, but other long-term trends could change that. Multiple car ownership has dropped as now 3 in 10 households own only one car in the US, setting off existential headwinds for the channel.
- Drug: Rite Aid’s consolidation in key metropolitan markets marks a $3 billion opportunity for grocers and other drug retailers to capture new shoppers and secure lucrative prescription trips.
- eCommerce: As global shipping logistics become more affordable, global retailers such as Temu will become potential online market share threats. In fact, Temu shoppers’ general merchandise share of wallet online is 2x larger compared to total US.
Accelerate tech innovation carefully.
From promotions to consumers, 2024 is continuing to be a year for further technological innovation looking to impact how people shop and consume:
- 3 in 4 promotional ad blocks for essentials were digital in 2023.
- Over half of the US population uses mobile payments (e.g. Apple Pay or Samsung Pay).
- Buy Now, Pay Later adoption grew by 4 percentage points in the past year as credit utilization is at a two-year high.
Business leaders will need to further invest in digital transformation of their marketing and brand planning to adapt to the increasingly tech saavyness of their consumer.
But a look at 2023 wouldn’t be complete without understanding the rise of generative artificial intelligence (GenAI). GenAI took over headlines with promises of accelerated content creation, enhanced data insights and a transformative impact on search. In just one year, GenAI has outpaced adoption rates of both virtual reality and cryptocurrency, with over 1 in 10 consumers experimenting with the technology in 2023. But brands need to be cautious as the ones who are able to better identify GenAI creatives aren’t the ones you might expect.
Download the full report and watch the webinar on-demand to see all the insights.
In the full report and webinar, you will discover more about these top four consumer trends and what it means for your brand. More insights include:
- What could US GDP growth look like in 2024
- What is the impact of GLP-1 to grocery purchasing and other industries
- How do consumers view brands who utilize generative AI in marketing & product development