As we approach the end of another hectic year and wonder, ‘where did 2023 go?’, we’re taking a moment to reflect on the challenges and opportunities that have started to emerge – and how they will impact consumer behaviour in 2024.
In this article, we’ll look at just some of the global consumer trends we expect to come to the fore: advances in AI – concerns vs opportunities; the impact of the cost of living crisis on consumer perception of ESG (Environmental, Social and Governance); how different generations use digital; and the rise in ‘phygital’ as customers return to store while increasingly seeking digital experiences within those bricks-and-mortar environment.
As AI opportunities grow, so will consumer concerns
Earlier this year, ChatGPT set the record for the app with the fastest-growing user base in history, having an estimated 100 million monthly active users just two months after launch.
A large proportion of the user base are developers using OpenAI’s API to create their own AI apps, which is beginning to turn AI into an everyday part of our lives. In fact, a recent GWI report reveals that consumer interest in AI has grown by 36% YoY.
But at the same time, concerns about the technology have doubled. Issues with AI include the impact it may have on artists and creatives (80%); a belief that development should be paused to ensure its safety (53%); and concerns that individuals can use it easily for unethical purposes (66%).
As use cases for the technology grow, businesses must be not only aware of, but also empathetic towards, these growing concerns. If they use AI to drive their products or services, they should explain how and why – highlighting the benefits to the customer. Equally, if they don’t use AI, they should explain why this is a benefit.
For companies and investors, sustainability and social initiatives have been a high priority in recent years. Three-quarters of PwC respondents say how companies manage sustainability is important in their investment decision-making.
And the same is true for consumers. A Deloitte study of UK consumers suggests some sustainability elements are becoming even more important to them since 2022 – such as item durability (4pp increase), repairability (1pp increase), if it’s locally produced (1pp increase), and if it’s labelled as responsibly sourced or manufactured (7pp increase).
ESG priorities will shift amid the economic downturn
This data suggests that other than clear labelling, the closer to the end consumer that sustainability solutions occur, and the more they impact their wallets, the more likely they are to find them important.
Moreover, data from HAVAS suggests that 71% of consumers now also believe brands should be improving their personal health and well-being.
So why is this shift in focus becoming more personal? One likely cause is the impact of inflation, which is still prompting recessionary consumer behaviours. In mid-2023, Deloitte found that 47% of UK consumers cited having less money left at the end of the month, resulting in more prudent spending. Meanwhile, in the HAVAS report, the economic crisis was ranked as the top concern on a personal level.
So how should businesses respond? Crucially, ESG is still important to many consumers, especially where they can see a personal impact. So it’s important to frame their short-term sustainability initiatives around customer cost savings where possible to help them weather the economic turbulence.
Boomers will continue to spend more online
While some generations are concerned about not being able to afford day-to-day living – 31% of Gen X (40-55 year-olds) feel “the most concerned ever” in their life – this is only true for 13% of Boomers (55+), who are continuing to spend more online. The GWI report suggests a 57% rise in using TikTok since 2021, primarily using such social platforms to follow influencers. In addition, 39% of Boomers said they bought products online in the last week (compared to 35% of Gen Z).
As more and more studies are showing, it’s time to stop obsessing about the younger generations being “the” digital consumers. For marketers with an older audience, they shouldn’t be afraid to look for them online.
As consumers head back to store, they’ll rely on ‘phygital’ shopping experiences
Perhaps one of the most prevalent consumer trends for 2024 will be the concept of ‘phygital’ customer experiences. Whether consumers shop online or in-store, they crave a consistent, omnichannel experience.
In another PwC survey, in-store digital experiences featured heavily among the most appealing attributes of physical shopping, including the ability to use: self-service kiosks (42%), the retailer’s website/app to browse for a product (41%), click-and-collect services (38%), scan-and-go technology (34%), and immersive digital experiences (24%).
While helpful sales assistants remain a top priority (for 50% of shoppers), these digital aspects are all things brands should be looking to implement in 2024 to meet their customers’ needs – and optimise an often-fragmented omnichannel experience.
Meeting customers where they are in 2024
New consumer trends and advances in technology mean businesses must be adaptable. In 2024, they’ll need to keep pace with evolving AI, shifting channel behaviour, perceptions of ESG, shifting channel behaviour, and the blending of physical and digital behaviours, where omnichannel optimisation and messaging will be critical.
In our next post, we’ll discuss how to deliver a consistent brand message across all channels. In the meantime, if you’re looking for support in training your teams on digital transformation, check out our Key Areas of Expertise here at Cognitive Union. Chat with us today to learn more.