Understanding and adapting to consumer behavior is a key skill in business. While you don’t want to be constantly changing your strategy, it’s important to adjust to longer-term trends.
Consumer behavior trends may be tricky to follow in 2023. We’re facing economic turbulence, with inflation and a possible recession on the horizon. Meanwhile, there’s also a sense of excitement as the pandemic becomes an event of the past. These two factors are changing the way customers spend.
Understanding each consumer behavior trend can give you a clear view of the market. With this knowledge, you can adjust your product, service, marketing, and design strategy for a financially successful year. Here’s what the latest data is telling us.
10 Consumer Behavior Trends to Keep an Eye On
1. Spending Is On the Rise Despite Concerns
We’re facing global economic uncertainty. According to Forrester’s Consumer Energy Index and Retail Pulse Survey, 64% of US adults are anxious that a recession is coming. As inflation lowers spending power, 81% of people report that they’re managing expenses by changing the way they shop.
Even still, consumers have spent years saving because of the pandemic and the data shows that cash flow will begin to grow by the third quarter. Experts expect spending to continue to increase despite economic conditions.
With that said, spending will look different than before. People may cut down on products that they see as luxuries to ensure they have funds for necessities. As we head into 2023, Americans are most concerned about rising food and gas prices, so they’ll budget for more funds in these areas.
2. Quality over Quantity
As consumers shift their spending to accommodate economic changes, they’ll also adjust their expectations. While they’re willing to spend more, they also expect an increase in quality. According to Forrester, people are looking to get as much value as possible out of each dollar.
In other words, consumers are becoming pickier than ever. They’re looking for curated experiences, even if that means having fewer experiences overall. Consumers will be selective about what brands they choose to shop with depending on the value they can provide.
That also means consumers will cut out unnecessary expenses to pay for those more curated products. Even consumers who don’t feel the effects of inflation are being cautious. One study found that 42% of consumers don’t feel financially impacted by inflation, but are still careful with their spending. People are driving less, buying store brands, and stocking up on sales to save.
3. Advanced Technology Creates Blended Experiences
The pandemic forced businesses and consumers to use more advanced technology. Over time, consumers have become accustomed to interacting with more technology anytime they patronize a business, like QR codes and embedded payment systems. As technology continues to advance in 2023, customers expect to see more businesses using AI (artificial intelligence) and VR (virtual reality).
At the same time, customers still report enjoying an in-person experience at physical stores. A Raydiant study found that 44.4% of customers prefer shopping in person, while 55.6% prefer shopping online. People also prioritize in-store shopping for certain categories, like groceries or healthcare, and prefer online shopping for other products, like toys.
Ultimately, this means that people want to have a blended shopping experience. They’ve come to expect advanced technology as part of their shopping experience, whether online or in-person.
4. Customers Want a Variety of Payment Methods
Debit and credit cards are still the top payment methods. 59% of shoppers use debit cards and 51% use credit cards. However, demand for other, more technologically-advanced payment methods is growing.
For example, 33% of customers use digital wallets when shopping online. 25% of people say they use digital wallets more often now than they did a year ago. And, of the survey participants who note changing their payment habits due to cost-of-living changes, 41% say they now use digital wallets more in order to better manage their money.
5. Sustainability Is Still In
Shoppers continue to value environmental responsibility and sustainability. According to IBM research, 77% of people say that this core value is either moderately or very important to them. On the same note, consumers also say that they care about whether brands support recycling and use organic materials.
Customers are also placing the responsibility for advancing sustainability on companies. Per a NielsenIQ survey, 48% of consumers expect brands to take the lead in creating sustainable change.
People are ready to support these expectations with their money. In one study, 55% of consumers surveyed reported recently buying a sustainable product or service. Plus, 44% of shoppers say that sustainability is more important than brand name, and two-thirds are willing to spend more on sustainable products.
6. Consumers Want Convenience from Home
People are spending more time than ever at home. The pandemic forced people to stay home, and in turn, forced businesses to adapt and bring their products or services to peoples’ homes.
Consumers now expect that convenience in a variety of areas.
Consider the following data:
- 17.9% of people work remotely.
- 56.1% of people prefer working out at home.
- 37% of people utilize telehealth to receive health care.
While people want to resume some normal shopping at brick-and-mortar stores, they also want to have the option to do almost anything from home. The more brands can cater to this desire for convenience, the more they can tap into this market.
7. Customer Loyalty Is More Evasive than Ever
As we discussed above, customers are seeking out convenience and quality over quantity. They’re also seeking ways to cut costs. All of these factors ultimately affect brand loyalty.
Last year, 48% of shoppers said that they replaced products they once purchased in-store with alternatives they could buy online. Close to 25% of consumers say that they’re switching brands more now than they have in the past.
That doesn’t mean loyalty is entirely lost. According to a recent Accenture Song report on human behavior trends, more people are seeking out online spaces to find a sense of belonging. If you can lead your marketing with an accessible community, you could capture people’s brand loyalty.
8. Subscription Services Continue to Grow
Subscription services are convenient for both businesses and consumers. Today, there are 225 million active subscriptions in the U.S. Women account for the majority of the subscriber base at 60%.
As subscription services become more mainstream than ever, consumers are also more open to the idea, increasing their popularity. Businesses that do offer subscription services have seen subscribers increase by 90%, year-over-year. One report found that up to 75% of DTC (direct-to-consumer) brands will provide a subscription-based offering in 2023.
You can see evidence of this trend with big-name services like Amazon Prime, which maintains over 200 million members worldwide. Meanwhile, Netflix has over 223 million subscribers, and Thrive Market has added hundreds of thousands of subscribers in the last couple of years while also increasing its average order value.
9. Self-Care Products Will Gain Popularity
Consumers are showing a continued interest in self-care products that can help them deal with a world that is increasingly busy and complex. According to a report from Data Bridge Market Research, we can expect to see the global market for meditation products grow from $4.08 billion in 2019 to $9 billion in 2027.
That makes sense, considering the popularity and success of mainstream meditation apps in recent years. Calm, Headspace, and Insight Timer are just a few popular examples with paid membership business models.
Likewise, wellness brands are also seeing increased interest. Per Statista, fitness, yoga, training, and health tracking apps were among the top online services consumers spent money on in the US in 2022. People are also investing in their self-care by purchasing smart fitness equipment. In one study, 32% of adults reported owning a Peloton bike.
10. Video Content is Taking Over
While YouTube made video content accessible to all, TikTok revolutionized the way we think about content in recent years. People now turn to videos rather than articles to get fast, detailed information.
In 2022, experts estimated that the average person watched 100 minutes of online video per day. That translates to sales for savvy marketers. In one survey, 93% of brands report getting new customers thanks to videos on their social media accounts.
Sales come from video content across all social media platforms. For example, a third of Instagram’s most-watched Stories came from business profiles. Meanwhile, 7 out of 10 Instagram users said they accessed links shared on brands’ Instagram Stories.
The Benefits of Using Pay.com as Your Payment Service Provider
As consumers are pushing for more and more payment methods, make sure that your payment system supports a wide variety of options. With Pay.com, you can accept credit and debit cards, digital wallets, ACH transfers, and more. You’ll never miss out on a sale because you couldn’t accept your customer’s preferred method of payment.
Pay.com lets you either set up a customized checkout page with our no-code solutions, or use our developer-friendly APIs to embed our payment components into your website. Your customers will have a seamless, frictionless checkout experience every time.
As customers order more goods online, they’re also becoming increasingly concerned about security. Pay.com has Level 1 PCI DSS compliance and supports 3D Secure 2.0 (3DS2). That means you get secure transactions, always. Plus, you can display security logos on your checkout page to help your customers feel confident when shopping with you.
The Bottom Line
Consumer behavior is complex. It changes constantly, especially as world events occur and technology develops. With that said, there are always trends that we can identify by looking at the data. By considering these trends as you plan your product, marketing, and design strategy, you can ensure that you stay relevant to your target market.
The coming year is sure to have its ups and downs, but we can expect consumers to continue spending money. They’ll be most interested in getting as much value as possible out of each dollar, choosing quality over quantity, and seeking out sustainable, mindful products. You can capture customer loyalty by working these elements into your own offering.
Make sure you keep your customers happy with a convenient payment system. Pay.com makes online payments easy, with a wide variety of payment methods and a fast, secure checkout experience. Click here to get started now!