Despite the face off between consumers and the rise of inflation, The Star refers to current consumer spending as “resilient.” Consumers are bargaining their spending habits to remain conservative while still indulging in things and activities that bring them joy. As the end of holiday season and inflation mirrored one another, consumers are saving by eating at home, buying off-brand, shifting their focus to essential purchases, and more as discussed in the post. Despite consumer’s desire to save where they can, some industries are noticing that individuals are still willing to spend more on are on sustainability, unique travel, and gift-giving. This PitchBox Media blog post will explore upcoming consumer trends and where marketers will see the most pay-off.
Home Cooking
As a result of cold winter storms and inflation, individuals are spending less on restaurant dining, take-out, and foodie experiences. According to CS News there has been a decrease in spending on food delivery services as it is being seen as an unnecessary cost or luxury service and now, one of the first places consumers look to reduce costs. Consumers are cooking at home for the majority of their meals and according to NielsonIQ, “34% of consumers have cut back on take away, dining out, and socializing due to higher prices.” Marketers in the food and beverage industry will gain more traction with consumers by stressing the value of gathering family over a delicious meal, or redirecting the narrative of food delivery services to be seen as a convenience for betterment rather than a luxury.
Private-Label Spending
With a spike in inflation, consumers are opting for private-label products in comparison to brand-name products. Reliable stores like Walmart are noticing consumers buying fewer items during each shopping trip. The NPD’s consumer behavior report found that “more than 8 in 10 consumers are planning to rethink or even reduce their product spending in the next three to six months” to combat inflation. Most drugstores and retailers carry private-label products that check off the majority of shopping lists, from food and beauty, to lifestyle products that have become increasingly popular due to their affordable prices.
Recreational Spending
In the last three years, many have been spending more time outdoors to share time with friends or just get out of the house. This has resulted in an increase in spending on outdoor recreation, overall. Even in cold climates, consumers are spending more on skiing, snowboarding, snowshoeing, and other winter activities. According to the Freedonia Focus Reports, ” US personal consumption spending on recreation services is forecast to grow 9.9% annually in nominal terms through 2026” demonstrating consumers desire to experience new activities and experiences, rather than things. Statistics also point to the possibility that the CDC’s outdoor guidelines influenced many consumers to get out and try new outdoor sports and activities that they stuck with, evidenced with the recent pickleball craze.
Traveling
Statistics show that 2023 winter travel prices are “57% higher than the average trip cost during Fall 2022 and 28% higher than the Summer 2022 average.” Senior Economist at Wells Fargo, Tim Quinlin shared with CBS that consumers are desperate for travel at this time, many of them saving less to spend more on big ticket experiences like luxury travel including airfare, hotels, and long-term international travel. Despite inflation, especially in relation to gasoline and travel, a USC professor in consumer psychology referred to the current consumer climate as “YOLO behavior,” allowing for professionals and marketers in these industries to grovel less to empty shopping carts.
Gift-Giving
While gift-giving is always expected to be profitable time of year, holiday sales were only up an annual percentage of 7.6% compared to 2021’s 8.5%. While the difference is not all that dramatic, it does create a sense of urgency and competition for brands who rely on the gift giving season and the marketers behind their success. Products advertised as “the perfect gift,” to fit within a holiday budget, or those which secured placement within a digital holiday gift guide proved to have higher sales and brand awareness during the holiday season, supporting the value of PR and cohesive marketing during this competitive shopping season.
Increase in Spending on Sustainability
In 2022, consumers spent more money on sustainable products than ever before. With the help of social media and the press, consumers are more aware of the effects that waste has on our planet and the changes required to reduce personal waste and carbon footprint. A Capterra report recently showed that “consumer willingness to pay more for sustainable goods has increased by an average of 8% from 2021 to 2022.” They also found that Gen Z is willing to spend more than Baby Boomers on environmentally friendly products. Companies selling sustainable products can use these statistics to connect with generations that are more likely to see the value and invest in their products.
Essentials Focused
As the cost of living rises, consumers’ priorities are changing to mirror the current financial climate. According to CS News, consumers are focused more on buying products that are essential to their everyday lives. When it comes to luxury or experiential purchases, marketers will be more successful in their strategy when they illustrate to consumers they are getting more bang for their buck. In contrast, the pandemic has created an internal shift in consumer focus, leading more individuals to spend more on health and wellness products that benefit their quality of life, as they are now considered by many as essentials for daily self-care and wellness and are generally accepted as contributing to longevity.
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