Consumer behavior is constantly evolving, so what can determine business success in 2023 and beyond?
We talk with Dara Busch, co-CEO of 5WPR, about e-commerce trends, instant financing and shopping preferences.
- Why do you think brands should stay up to date with all the emerging trends influencing buying behavior?
The modern trend cycle is unlike one we’ve ever seen before. Short-form video apps like TikTok allow so much content to be created quickly that often these trends appear seemingly out of nowhere and can disappear just as fast. The modern consumer is so in touch with these trends that if a brand is not up to date or slow to implement these trends into their communications plans, they risk missing the opportunity to connect with customers, or worse, coming across as outdated.
- How are consuming habits evolving, and what can we say about the geography of consumption?
Consumer habits are constantly evolving in response to the world around them and the trends they’re attracted to are often influenced by geography and proximity. Major metropolitan areas where employees are overwhelmingly returning to the office are going to be interesting regarding current fashion trends and spending in these areas.
- Which goods and services do consumers purchase the most, and are generation wars in terms of purchasing habits a myth?
In 2022, we asked consumers what areas they had spent most of their disposable income in. Overall, the top category was dining out followed by clothing and fashion, and then electronics and technology. Of course, when you begin to investigate generational breakdowns this ranking changes simply because each generation wants differently. Gen Z may prioritize spending on what they will wear out with more concern than over where they will be wearing these pieces. Whereas Millennials may spend more frequently on electronics because not only can they better afford these expenses compared to their younger counterparts, but they are also probably furnishing houses and apartments, or upgrading their work electronics.
- To Buy Now, Pay Later or not? Is that the question?
2023 is going to be a hallmark year for Buy Now, Pay Later, especially with impending inflation. Consumers are looking to invest more in what they’re purchasing, which can be difficult when you’re trying to spend consciously. While they won’t be making use of this feature for every purchase, smart consumers will know when implementing a buy-now-pay-later option is right for them.
- Is 2023 the end of brick-and-mortar retailers?
Not even close. Since the onset of the pandemic, there has been a resurgence among brick-and-mortar retailers for various reasons. In 2022, we found over half of consumers surveyed preferred finding new products in-store over finding them online. Consumers also desired in-store experiences, sales staff support, and the opportunity to share shopping as an activity with friends. As we move into the new year and consumers continue to regain their comfort shopping in public, we expect in-store shopping to stay strong.
- What about e-commerce?
While brick-and-mortar will always have a place in consumers’ shopping experiences, e-commerce continues to offer consumers an experience that is hard to resist. In 2022, consumers we surveyed felt that when they needed a product was overwhelmingly more important than where they bought it, and many e-commerce retailers provide instant gratification through expedited or same-day shipping. As technology continues to advance, the e-commerce experience will continue to improve.
- We talk about consumer behavior, but what about sustainability – is it a whim or a true concern among consumers?
70% of consumers we surveyed in 2022 took it upon themselves to research if a company ethically and sustainably sourced and produced its products prior to purchasing, with close to 14% stating they did this every time. Numbers like these point to consumers’ ongoing accountability and concern with how they spend their money and who they support.
- Any other trends the commerce sector might experience this year?
2023 is going to be an interesting year for consumer culture. While there may be fewer social restraints as we continue to regain normality from the pandemic, consumers might be feeling more financial restraints due to the impact of inflation. Consumers will still be spending this year, but I believe we’ll see a shift in the industries they’re spending in and the major trend we can expect will be quality over quantity.
Dara Busch is co-CEO of 5WPR.