Ahead of the Curve: Predicting the Consumer Landscape in 2024
In the ever-evolving landscape of consumer preferences, business leaders must understand the dynamic shifts in trends across industries. As we step into 2024, taking a moment to analyze some of the changes anticipated by experts can unveil opportunities for business expansion and new revenue streams. It can also help companies prepare for potential disruptions and develop more sustainable business practices.
At Innovationedge, we’ve meticulously tracked data and accumulated insights to discern which trends we believe will have the most influence on consumer behavior in the coming year. Read on to explore our findings.
1. Convenience & Speed: Meeting Consumer Demands
The consumer desire for convenience and speed continues to increase and shape purchasing decisions. Today, time is a limited resource and this trend, which is fueled by our fast-paced lifestyles and the digital age, is steering both consumer expectations and industry norms across diverse sectors. McKinsey & Company shares that 60% of global consumers consider convenience a key factor when choosing where to shop.
Furthermore, giants such as Amazon have set remarkable standards with services like Prime, establishing speed as a key differentiator in today’s competitive landscape. With over 200 million members globally, Prime remains one of the most widely embraced subscription services around the world.
Additionally, a study by Consumer Intelligence Research Partners (CIRP) found that Amazon Prime members spend an average of $1,400 per year, compared to $600 for non-members. Delivering an array of perks, members enjoy complimentary two-day shipping, access to streaming videos and music, and exclusive discounts. These statistics demonstrate the influence Amazon Prime has in shaping consumer behavior and loyalty through convenience, speed, and high service standards.
Projections by Statista indicate that the global e-commerce market, slated to hit $4.99 trillion by 2028, will owe a significant part of its growth to the ever-increasing demand for enhanced convenience and faster delivery times. This paradigm shift is unmistakable in the food industry, where the surge in meal delivery services, quick-serve restaurants, and on-the-go options reflects consumers’ fervent quest for convenience.
A study by the National Restaurant Association reveals that 78% of consumers now opt for takeout or delivery monthly, with convenience ranking as the primary driver behind this shift. Over the coming year, businesses that can execute their customers’ needs quickly while making it as easy as possible for the consumer to begin transactions will reign supreme.
2. Digital Integration: Immersive Experiences
As 2024 kicks off, the fusion of the physical and digital realms continues to accelerate, ushering in a transformative era of digital integration. Propelled by significant growth in AR, VR, and AI, this trend is behind a profound shift in how consumers engage with their surroundings.
One of PwC’s recent reports forecasts the potential increase of the AR and VR market, predicting it to reach $1.5 trillion by 2030. This highlights the immense potential and widespread interest in these emerging technologies. Today, streaming services are already leveraging AR and VR to deliver more immersive viewing experiences, exemplified by Netflix’s foray into interactive storytelling with “Black Mirror: Bandersnatch.”
At the same time, the telecommunications sector is promising faster speeds and lower latency with 5G technology. The rapid expansion of VR and AR technologies is transforming the way people work, play, shop, and relax, thanks to the enhanced mobile connectivity provided by 5G coverage.
Within the education sector, Verizon is harnessing the capabilities of 5G technology to elevate virtual education and instructional approaches, with the goal of fostering more effective student engagement. As part of this initiative, Verizon has introduced immersive educational content, featuring AR and VR applications paired with comprehensive lesson plans. This strategy not only enhances student involvement but also encourages an innovative and dynamic approach to the learning process.
Verizon is also actively creating AR and VR experiences designed to enhance student engagement, support teacher readiness, and facilitate accessibility for special-needs individuals across a diverse array of educational applications.
In the retail industry, Verizon is using this technology to craft a personalized shopping journey, enabling customers to partake in immersive shopping experiences right from the comfort of their living rooms. From using applications on your phone to visualize what different pieces of furniture or artwork would look like in your home to using AR-enabled mirrors to try on clothing before placing orders online, these immersive technologies provide unique, personalized, and convenient experiences for customers.
In 2024, businesses that look for opportunities to integrate technology in a way that creates more interactive consumer experiences will be able to build stronger relationships with their core audiences and differentiate their offerings from the competition.
3. Health & Wellness: A Clinical Approach
The health and wellness trend remains a focal point in the new year, with consumers seeking products that contribute to both their physical and mental well-being. According to a recent Nielsen report, sales of products with health attributes rose by 4% around the globe in 2023.
Nowhere is this more evident than in the beauty and personal care sector, where brands are aligning with this movement by offering products free from harmful chemicals and rich in natural ingredients. Today, The New York Times shares that nearly one-third of all beauty products use the word “clean” in their branding, and retail giants like Walmart and Ulta are cashing in by creating their own clean beauty shops featuring products free of harmful ingredients.
But we’re seeing this trend appear in other areas too. For example, the global functional food market is projected to grow by 7.7% between 2020 and 2025 as a result of this health-conscious trend. One change in the health and wellness space to point out as we head into 2024, however, is that consumers are becoming more skeptical. Research shows people are seeking clinically proven beauty and consumer goods across most categories, making it crucial to validate claims using medical boards, doctor reviews, and independent third-party testing.
Expect to see brands founded or led by dermatologists, doctors, and medical professionals outweigh brands led by celebrities, influencers, and traditional founders as consumers search for brands they trust. By anchoring science-backed health and wellness at the core of their product strategy, leaders not only tap into a burgeoning market but also cultivate enduring customer loyalty.
4. Product & Service Customization: Increasing Conversions Through Differentiation
Today’s consumers seek products intricately tailored to their unique needs and desires. Salesforce recently shared that 66% of customers expect companies to understand their unique needs and desires and numerous studies indicate that customized marketing messages lead to elevated conversion rates, heightened customer loyalty, and enhanced customer satisfaction.
This is particularly evident in the fashion and beauty industry where brands are championing personalized experiences, but according to McKinsey & Company, 80% of B2B buyers now expect the same buying experience as B2C customers.
And B2B companies who rise to the challenge are reaping the rewards. For example, Dynamic Yield, a software company that helps other brands customize products, content, and offers to their customers using an advanced algorithm, recently experimented by applying these same principles to their B2B customer base.
By A/B testing content and segmenting its audience, Dynamic Yield personalized its website experience to meet individual needs instead of providing cookie-cutter information. In doing so, Dynamic Yield saw an 800% increase in demo requests and a 275% increase in newsletter signups.
To integrate this trend, leaders should be focused on not only collecting but also properly segmenting consumer data to create unique online experiences. As we head into 2024, we expect carefully curated zero-party data to remain a top priority. This is the type of data customers and consumers share freely, often by opting into a rewards program, updating their account preferences, or adding items to wishlists. However, we also expect to see a rise in the accuracy of and demand for first-party data, which is often scraped from site customers when they interact with your website or digital marketing campaigns.
Companies like Pearl Diver promise to “identify your anonymous website traffic and turn them into leads by revealing their name, email, title, phone number, and much more” giving businesses, marketers, and sales leaders insights into previous blind spots in their lead gen funnels.
Of course, this level of personalization can be taken offline too. To create something truly special, business leaders can explore customizable products such as bespoke jewelry, personalized skincare routines, tailored food subscriptions, branded paper products, or custom-scented household cleaners. By placing personalization at the heart of the products we produce, we not only meet individual tastes but also foster lasting customer loyalty.
5. Regenerative Sustainability: Building Loyalty Through Values
Sustainability is no longer merely a choice but a strategic necessity in the consumer goods landscape. A study from Kadence International highlights that 73% of global consumers are willing to change their consumption habits to reduce the impact they have on the environment.
The surge in consumer consciousness about the environmental repercussions of purchases is propelling the demand for eco-friendly and sustainable products to new heights. Brands that integrate sustainable materials like bamboo and recycled plastic, coupled with eco-friendly production methods, are set to not only meet but surpass customer expectations.
For example, Patagonia, a renowned outdoor apparel and equipment brand, champions regenerative sustainability across all areas of their business. From incorporating organic and recycled materials in their product lines to actively supporting environmental causes through initiatives like 1% for the Planet, Patagonia truly walks the walk. Through its unwavering values, Patagonia has established a robust identity as a sustainable and environmentally conscious brand, drawing in and retaining customers who prioritize these principles.
Following in Patagonia’s footsteps, we see radical brands like Mountain Rose Herbs, a company that focuses on providing organic and sustainably sourced herbs, spices, and teas. Known for partnering with regenerative farmers, implementing sustainable operations, and supporting social and environmental causes, Mountain Rose Herbs has also taken a stand against overconsumption throughout the years by promoting Buy Nothing Day in place of Black Friday. To encourage customers to be more thoughtful about the purchases they make, Mountain Rose Herbs blacks out their website on this date and highlights an educational video about the harrowing effects our throw-away culture has on the environment.
The interesting plot twist is that by opting out of Black Friday, Mountain Rose Herbs has actually increased brand loyalty with its customers year after year. While the exact worth of the business is not publicly available, a study conducted by Report Prime—a company that provides market insights to Fortune 500 companies—shares that Mountain Rose Herbs’ revenue in 2020 was approximately $140 million. By 2030, Report Prime estimates this will double to over $280 million in annual revenue.
This shows that the shift towards regenerative sustainability is a powerful strategy, attracting environmentally conscious consumers, amplifying demand, and positioning brands as trailblazers in the industry, but it also highlights the importance of staying true to your values as a business.
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