Understanding consumer behavior is elemental to brand and business strategy, and 2023 is a whopper of a year for those challenged with fathoming the consumer mind. Covid, war in europe, economic recession, extreme weather - consumers have changed a lot since the beginning of the year.
In a nutshell, don’t expect consumers to be shy about spending in 2023. But expect them to be far pickier — seeking out fewer, richer experiences that blend the digital fluidity of the pandemic with the familiarity and intimacy of the times that came before.
Let's dive in top 5 changed customer outlook and see how they are reshaping the brands across the globe to accpet new trends and focus on some new strategies.
1. Shopping has become more digital - Ecommerce is rising
Since the onset of covid, online shopping is rising slowly, but shows no sign of stopping in the future soon. A 2023 survey shows that 58% of all consumers spending is now online. This has led the consumers identified physical stores as the number two channel for inspiration and search for shopping. The behavioral shift is now remarkably visible, not only in generationa Z or millenials but in other digital friendly generations too.
2. Consumers expect multiple payment options
As people increasingly shop online, they also expect a wide selection of different payment options from online retailers. This includes offering different ways to pay (like accepting credit, debit and PayPal payments). But also the ability to defer payments over time. In fact, the "Buy Now, Pay Later" (BNPL) industry is growing alongside the general growth in eCommerce as a whole.
3. Shoppers Want Everything Delivered
Over the last few years we've seen a surge in products delivered to the home.
Including products that were traditionally only bought in-store, including:
Eyeglasses (Warby Parker)
Workout equipment (Peloton)
Shoes (Allbirds) and many more
Brands like Nectar Mattress have seen rapid growth largely by delivering a product that was previously seen as too large and bulky to deliver to people's homes.
But this is growing another issue - High Product Return - due to mismatch of expectations while buying things online.
4. The Home becomes The Hub
The average North American adult spends 90% of their time indoors.
And with more people working from home than ever before, this number may be on the rise.
And all of this time spent living and working at home is already starting to shift consumer behavior in unexpected ways. As people spend more time at home, they tend to spend on the following:
Interior decoration (Home office, Kitchen, designer furniture)
Home Security like smart doorbells
Spend more on Pets
Eco friendly groceries
Than cutting budgets from the following:
Travelling to exotic locations
Expensive dinners and luxury items buying
5. Influencers Increasingly Influence Buying Decisions
Millennials and Gen Z consumers continue to rely on influencers for product discovery and for choosing which brands to trust.
In fact, according to Influencer Marketing Hub, the influencer marketing market has increased year-over-year, reaching an estimated $13.8 billion in 2021.
This is why influencer marketing is still a growing marketing channel and one that many marketers rely on. However, the way consumers interact with and buy from influencers is changing. Specifically, consumers now seek out recommendations from social media influencers that may only have a small, niche audience. An industry study by HypeAuditor found that social accounts between 1k-5k followers get 2x more relative engagement on each post than influencers with a larger following.
6. Bonus - Rise of Second Hand Shopping & Monthly Subcription Model
One way to spend less money but still afford nice things is to buy secondhand. Buying secondhand is nothing new, but it seems that consumers will turn to secondhand products more often in 2023.
Online conversations increased by 21% last year compared to 2021. And more brands are entering the resale market. The luxury market alone is expected to sell 43 billion dollar worth of goods in 2022, double the amount sold five years earlier, in 2017. Along with this, conumers prefer to pay online with a preferred monthly subscription services. This is something ecommerce brands are focusing to bring into account too.
Online businesses are ramping up their investments in digital technologies to meet customers’ expectations. 3D product visualization will be crucial for business growth during the next decade. This means that the success of furniture retailers will inevitably be tied to their approach toward visual commerce. Ready to reinvent your furniture e-commerce merchandising with 3D virtual try-on?