The COVID-19 pandemic, geopolitical crisis, and subsequent tensions have undeniably transformed purchasing behaviors, with an added layer of complexity further compounded by the inflationary crisis. As individuals and societies navigated through these unprecedented challenges, their approach to acquiring goods and services shifted significantly. Heightened health concerns prompted a surge in online shopping as consumers sought contactless alternatives to traditional brick-and-mortar stores. The rise of remote work arrangements resulted in increased demand for home office equipment and digital services fostering productivity amidst uncertainty. Moreover, limited availability of certain products due to disrupted supply chains led consumers to become more mindful of their purchases while favoring local businesses over international brands. Additionally, the inflationary crisis has forced people to reevaluate their spending habits carefully—prioritizing essential commodities while cutting back on non-essential items previously taken for granted. Consequently, purchasing behaviors have evolved into a cautious dance between meeting practical needs while adapting to fluctuating market conditions—a delicate balance that continues to reshape consumer patterns worldwide.
The research done by Capgemini “What matters to today's consumers 2023: consumer behavior tracker for the consumer products and retail industries “ yields some interesting results regarding what interests today's consumer. Let's take a look at the main insights.
1) Due to the rising cost of living, consumers have changed their purchasing patterns and expect companies to assist them.
According to the Capgemini survey, 61% of consumers say they are extremely concerned about their personal financial situations. Among the consumers who are extremely worried about their personal financial situations: many believe the government is not doing enough to address the rise in their cost of living (79%); they are worried about energy use in their home due to rising energy prices (64%); they are worried about their ability to afford food or other basic household necessities (62%); their mental health has been negatively impacted by the rise in their cost of living (60% globally, and even higher for Gen Z and Millennials, at 69%); they fear that their personal financial situations will worsen within the next 6–9 months (80%).
73% of consumers are now exhibiting a discernible change in their purchasing patterns by actively reducing impulse buying. This shift can be attributed to several factors, such as the increasing prevalence of budget-consciousness and mindfulness towards sustainable consumption, but mainly the cost-of-living crisis. In response to that, consumers are experimenting with different options for more affordable goods.
64% of consumers say they are buying products from hypermarkets and discount stores, rather than using, for instance, convenience stores or specialty grocery stores and over half (57%) of consumers also say they are spending more time in different physical stores to find deals and discounts.
This could be a huge opportunity for eRetail Media. With consumers increasingly seeking deals and discounts, there arises a compelling opportunity for eRetail Media to leverage this behavior. This presents an exciting prospect for eRetail Media to capitalize on by bridging the gap between these two realms of online and offline shopping experiences. eRetail Media can capture the attention of deal-seeking consumers who are spending more time browsing through different aisles and sections by highlighting exclusive offers or limited-time promotions available exclusively through online platforms.
2) Store visits and online shopping have declined due to the cost-of-living crisis.
Over time, consumer interaction with online channels has decreased, but has stabilized. According to Capgemini survey, among the generation segments, Millennial shoppers (aged 25–40) show the strongest preference for online interactions (40% today and 47% post-cost-of-living crisis). Of shoppers with children, 41% prefer online shopping interactions compared to 29% of shoppers without children, increasing to 47% and 34%, respectively, in the longer term.
3) Stockouts of essential products are a concern for many consumers.
Today, many consumers are concerned about the medium-term availability of essential products such as food and prescription and over-the-counter medications due to the unreliability of supply chains. With an increasingly diverse range of options available today, individuals possess a heightened ability to adapt and explore substitute products or services from different brands. This adaptable purchasing behavior not only demonstrates consumer resilience but also emphasizes brand loyalty as a fluid concept influenced by timely availability and customer-centric strategies adopted by companies striving to capture market share. In fact, 58% of consumers prefer to buy a similar product from a competing brand in the event of a preferred product becoming unavailable.
4) In-store experiences still pale in comparison to delivery and fulfillment.
Consumer preference for delivery and fulfillment over in-store experience remains stable, as evidenced by the consistent purchase behavior observed across various industries. This trend can be attributed to several factors that have shaped modern consumers' preferences. Firstly, the convenience offered by online ordering and home delivery has become increasingly appealing in today's fast-paced society. Secondly, technological advancements have greatly enhanced the efficiency and reliability of delivery services over recent years, further solidifying consumer trust in this mode of shopping. As a result of these factors influencing purchase behavior patterns, businesses must adapt their strategies accordingly to cater to evolving consumer demands successfully
5) Consumer decision-making is increasingly influenced by social media influencers.
Globally, social commerce is estimated to have generated $724 billion in revenue in 2022 to date. The size of the global influencer marketing industry is expected to reach $16.4 billion in 2022, and increase by about 30.3% annually through 2028, reaching nearly $85 billion.22 (source: Woosuite, “Global influencer market size,” 2022.)
The rise of social media influencers has significantly transformed the way individuals discover and engage with products or services, nearly one-quarter (22%) of all consumers globally have learned of a new product or brand in the past six months from an influencer (Capgemini, 2023). With their substantial online presence, these influencers possess the power to shape consumers' perception through authentic and relatable content. As a result, product discovery through social media influencers often leads to changes in purchase behavior.
Strategies for brands and retailers to successfully ride ongoing shifts in consumer behavior.
What Capgemini suggests, at the end of its study, are the following three key actions:
- Adapt to compete: Driving cost reductions and margin improvement by rethinking the way brands and retailers operate, how the supply chain is organized, and how to engage shoppers throughout their online and offline journeys.
- Lead with purpose: Managing the growing tension between the simultaneous need for affordability and sustainability.
- Unlock channel growth: Identifying new revenue streams and growth opportunities through new initiatives and operating models.
At Shalion we can help you capitalize on your efforts. Improve your margins by understanding where to invest and how much. By identifying the opportunities offered by e-Retail Media you could gain awareness, promote your products correctly and appear in the first search lines.