Consumer behavior trends are top of mind for brands and retailers in the quest to drive sales, boost loyalty and deepen customer engagement.
But as history illustrates, consumer behavior is far from anything that is ever set in stone or even consistent year to year.
That's because of the wide, and expanding, range of factors that impact and change consumer behavior trends over a year, in just a few months or nearly immediately, as seen in 2020 when the COVID-19 pandemic sent the retail sector spinning.
Today's shopper is all about a connected interaction with brands and retailers — a personalized journey when browsing and buying and they don't mind if it takes longer than in the past.
In fact, 80% of consumers prefer a good customer service experience that takes longer over a faster one, according to Kearney research.
Here's a look at top consumer behavior trends taking root.
Consumer behavior gets personal
Consumers want and expect a personalized experience, whether on an app, on a website or in a store. The trend, according to Shopify, is a win for retailers. Personalization programs yield up to 15% higher conversion rates and 20% higher customer satisfaction rates.
And personalization can pay off big for the brand.
Since PetSmart launched its Treats Rewards loyalty program in 2018 the retailer has seen double-digit or sometimes triple-digit membership growth every year. But 2022 was one for the record books with Treats member offer activation up nearly 150% compared to 2021.
This year the 37-year-old pet retailer hit the 60-million-member mark — and there are several reasons why, according to Bradley Breuer, VP of marketing, loyalty, personalization and customer relationship management.
The loyalty program's goal is to deepen the connection with pet parents and the enrollment success is tied to the retailer's efforts to experiment, innovate, test, learn and get personal.
"People want to sign up because we're offering something compelling," Breuer told RetailCustomerExperience in an email interview.
But it's not only the pet sector getting personal. Today's beauty retailers are racing to deliver consumer personalization and, at the same time, infuse technology into the equation as younger consumers are all about tech.
Consider this statistic: Nearly half, 43%, of shoppers would rather shade-match for foundation through AI online than test in-store. And even more, 62%, are more likely to buy a product if they can use beauty tech to find that perfect shade or formula.
Those findings are from a Bolt report, conducted with YouGov, that polled consumers on how AI and tech tools are impacting the shopping experience and how personalizing the shopping experience can drive customer engagement and increase customer loyalty.
And the results have been rewarding for beauty retailers.
Estee Lauder's virtual lipstick try-on achieved a 2.5X higher conversion rate from shoppers who used the AI tool, according to the report. Neutrogena's partnership with Nourish culminated in 3D-printed skin supplements, enabling personalized skincare with a simple photo.
The Bolt data revealed more than half, 58%, of consumers would pay 10% more on beauty products if they're accompanied by personalized online shopping experiences.
Compelling, immersive experiences in great demand
Compelling shopping experiences create loyal customers: Nearly 66% of consumers say they would become a loyal customer if a brand/retailer offered a more compelling shopping experience.
"If your products' stories are not showcased everywhere your shoppers are, you are not delivering on the customer experience promise that you committed to the board and to your customers," said Kristin Naragon, chief strategy and marketing officer at Akeneo, in a release on recent data. "This means that your CX strategy cannot exist without a product experience strategy."
Consumers crave immersive and unique experiences, according to a blog by Robin Waite, a business coach. "Brands that can provide immersive, engaging, and unique experiences will stand out in the market… The market research questions that can guide businesses here are: How can I create unique experiences around my products or services? What kind of experiences are my consumers looking for? How can these experiences strengthen my brand-customer relationship?"
Just under half, 42%, of consumers are prioritizing spending on experiences rather than possessions, according to Paysafe research that revealed the consumer landscape is a mix of optimism, caution and willingness to adapt spending habits.
"Consumers will prioritize discretionary spend on goods and experiences that bring them joy. This is a consistent trend that is clearly supported by our research. For businesses, large or small, to capitalize on this, it means making every experience, and every transaction count. By offering a frictionless checkout experience, businesses increase customer experience and loyalty," stated Rob Gatto, chief revenue officer at Paysafe, in a release on the research.
Consumer behavior merging physical and digital
A few years back the term 'phygital' hit the retain sector, identifying the consumer behavior trend of shoppers not seeing any distinction when shopping at a brand's store and through the brand's digital channels. It also encompasses how consumer behavior was rapidly changing within the checkout scenario.
The phygital experience includes everything from tapping kiosks and mobile apps to embracing digital payments or choosing curbside pickup – all of which are expanding consumer behavior trends.
Consider these statistics from a PlayUSA survey about how American consumers view today's checkout options:
- More than four out of five (84%) Americans said they like using self-service kiosks, and 66% said they would choose to use one over a manned checkout.
- 84% of Gen Z and 76% of Millennials said they prefer using tech-based checkouts, as did 57% of Gen X and 46% of Baby Boomers.
- The reasons for the preference varied. Nearly three quarters (71%) said it's because manual checkouts take longer, but 60% said they go this route because they don't have to talk to people. In fact, nearly one in six (14%) said they would wait for a self-service kiosk even if a manned checkout had no line.
Simply the online and in-store experience is now "intrinsically intertwined," according to Steve Sivitter, CEO, 1WorldSync.
"The boundaries between digital and physical retail channels are dissolving, giving rise to a 'phygital' shopping era where consumers seamlessly merge online and in-store shopping to make informed in-store purchases and vice versa. This interconnected ecosystem reflects the future of retail, demonstrating the complementary and indispensable relationship between online and brick-and-mortar platforms in enhancing customer experience and choice," he stated regarding recent survey findings on consumer behavior.
Sustainability, sustainability, sustainability
One of the latest consumer behavior trends is consumer interest in sustainable shopping, with an overwhelming majority of young U.S. shoppers willing to spend more on environmentally-friendly items, according to a Tata Consultancy Services survey that polled U.S. and U.K. consumers.
The urge to shop from sustainable retailers comes despite 55% of U.S. consumers cutting back on discretionary spending, according to a press release on the study.
The survey found a large majority of consumers in the U.S. (86%) say whether an item is made sustainably or sourced responsibly is of importance to them and an average of 69% of all consumers surveyed have recently paid more for sustainable products. But, in exchange for rewards for sustainable choices, 62% would be more inclined to spend with a given retailer.
Two-thirds of consumers, between 18 and 34 years old, are likely to buy from retailers committed to sustainability and 69% believe retailers have a responsibility to reduce their environmental impact, revealed a Viant Technology study.
"Our latest research demonstrates that consumers are increasingly looking for brands to not only talk about sustainability and about reducing their carbon footprint, but to take real action," Jon Schulz, chief marketing officer, Viant, said in a press release. "As sustainability remains top of mind for both brands and their customers, we are pleased to offer our clients a number of leading-edge solutions, including our Adtricity program, which help brands take real action to achieve their sustainability goals."
As Kristin Naragon, chief strategy and marketing officer, Akeneo, wrote in a blog:
"While some global brands like Patagonia, Levi's, and AGU have had sustainability at the cores of their business models for years, household names like Kate Spade and J. Crew are also joining the conversation by partnering with a popular online consignment store, ThredUp, to implement resale initiatives that allow customers to purchase and trade verified 'pre-loved' products. With the secondhand market expected to reach $26 billion by 2026 in the US alone, this move is not only good for the environment, but good for the brand's bottom line. In the furniture arena, IKEA announced an expansion of their own resale program, stating that, overall, U.S. operations saw both reduced waste and $5.9 billion total sales in 2022."
In fact, more than half, 60%, of Gen Z and Millennial shoppers have stopped buying from brands lacking when it comes to environmental accreditations and more than two-thirds of millennials have spent more on a product because it was sustainable, according to an ESW study.
"Younger consumers are acutely conscious of a brand's efforts towards sustainability," Patrick Bousquet-Chavanne, president and CEO, ESW Americas, said in a press release on the findings. "This shift toward eco-conscious consumerism should serve as a wake-up call for brands to be more transparent with their manufacturing, packaging and shipping practices."
Consumer behavior all about convenience
Today's consumers know it's possible to order and receive almost any goods within 15 minutes in many areas and within an hour or two in most metro locations, and they are taking good advantage of the opportunity, according to a DoorDash report.
"On-demand digital commerce is growing exponentially, and consumer shopping habits and expectations have shifted as a result of having nearly any product available for delivery within minutes," Toby Espinosa, VP of ads at DoorDash, said in a press release regarding recent data research. "But it's not just how consumers shop that's evolving. How they discover, interact and engage with brands has changed dramatically over the last few years, so brands and advertisers need to shift their approach, too."
The data revealed that when shopping online for consumables, the top priorities for respondents are convenience (74%), ease of use (48%) and speed (46%).
Consumer behavior accelerating self-checkout evolution
Ikea Amsterdam recently introduced two vending machines to provide in-store pick-up with the ability to handle 480 orders daily. To integrate this technology, the Amsterdam store adopted vertical storage and transitioned to self-checkouts to optimize store space.
The vending technology is one of the latest advancements in meeting consumers' want for faster checkout and receipt of goods.
"The lockers and click and collect machines installed in Amsterdam reflect Ikea's commitment to seeking out new omnichannel methods of meeting our customers in a way they want to be met," Kevin Gamble, country digital manager at IKEA, said in a press release.
A recent Tata Consultancy Services survey revealed all consumer age groups are interested in using tech-enabled shopping experiences like contactless checkout (60%) and the use of QR codes to receive more information (54%), with millennials the most interested in almost all digital shopping tools.
On demand delivery
Delivery speed directly ties into convenience and is now top of mind for retailers given all the advances since Amazon's initial overnight e-commerce arrival. Consumers are now not only expecting fast delivery — they'll easily move on to another brand if they can get the needed item quicker.
Yet there is one factor that can change the delivery requirement — free shipping — a big consumer want. A Kearney report noted 80% of consumers would prefer free shipping over fast shipping when shopping online.
Consumer behavior driving mobile commerce revolution
A hefty number of consumers, 87%, are using their smartphone to research a product while in-store at least some of the time, and 66% of shoppers migrate from in-store browsing to online purchasing, according to a survey from 1WorldSync Data.
More shoppers are also shopping online, with 66% of shoppers purchasing an item online in the last two months that they only ever bought in-store on previous shopping excursions.
Shoppers will continue embracing digital and mobile retail experiences even once the coronavirus pandemic is only a memory. That's a prime finding of a study, from Sinch, on consumer behavior during COVID-19 and projected post-activity.
More than half of consumers, 58%, will continue to avoid crowds, 52% will avoid unnecessary travel, 46% will spend less time inside stores and 45% will dine out less often, according to a press release.
Yet retailers aren't completely delivering the most useful digital and mobile experience that consumers want, according to the study, which stated brands are playing catch-up and many don't know which channels customers prefer.
"Customers are now overwhelmingly mobile-first, and they want utility at the press of a button: the ability to reserve, confirm, purchase, cancel, inform, entertain, and seek connections in an intuitive, personalized way. Customers are ready for these kinds of AI-powered conversations across channels on their mobile devices, and brands are in a high-speed race to provide all of these digital interactions and more," Jonathan Bean, Sinch CMO, said in the release.