Consumer Lifestyle Trends 2023

 

 

 

Consumer Lifestyle Trends Businesses of all sizes must monitor changing consumer preferences, from buying patterns to new technology.

Read on for worldwide consumer trends to monitor in the next 2-3 years.

Consumer Lifestyle Trends 2023

1. Consumers want data control

Consumers want data control back.

A KPMG poll of 1,000 consumers indicated that 56% wanted more data control.

Increased privacy awareness is affecting customer behavior.

McKinsey found that 87% of North Americans rejected a company due to worries about its data handling.

Over half of consumers trust a firm better if it does not request useless information about its product.

Payment security business Paysafe found that 82% of respondents perceived an imbalance between security, convenience, and fraud protection.

48% of American consumers would embrace tighter security if it eliminated fraud.

Legislation has expanded after the EU passed the GDPR in 2018. Consumer data legislation was proposed in 25 US states and Puerto Rico in 2019.

The California Consumer Privacy Act (CCPA) was passed on January 1, 2020, whereas most bills failed.

This Act allows California residents to request personal data from businesses. It also allows Californians to be warned before a corporation gathers their personal data.

The biggest firms are acting. Apple introduced a solution for people to sign into apps without sharing data with third parties.

Marketers may resist these changes, but consumers will undoubtedly put pressure on firms and governments to safeguard their data.

According to 90%, governments and corporations have a duty to secure personal data.

However, 70% of consumers do not trust those businesses to do so.

2. Augmented Reality Improves Consumer Lifestyle Trends Experience

 

Consumer Lifestyle Trends 2023

 

Consumers are seeking ways to improve their purchasing experience as digital-first buying grows.

Augmented reality and virtual “try-before-you-buy” are answering this requirement.

Industry executives predict that 35% of consumers would shop online more if they could virtually try a product before purchasing.

In a survey of over 30,000 consumers, 51% identified the inability to touch, feel, and try products as the worst negative of internet buying.

This has inspired many major merchants to replicate in-store shopping online.

Ulta’s GLAMlab virtual try-on tool has received a 7x spike in engagements since the outbreak began.

L’Oreal’s 2019 virtual cosmetics experience resulted in quadrupled website engagement and treble conversion rates.

A partnership with Snapchat allows Kohl’s to offer a Virtual Closet experience on the popular app.

This innovation is predicted to grow Snapchat’s market to over 75% of 13-to-34-year-olds.

Snapchat boasts that their daily active users engage with AR content approximately 30 times a day, making them an excellent partner for retailers wishing to add these offers.

Additionally, these tools function. Research from Shopify indicates that products with interactive AR content have a 94% greater conversion rate than those without AR.

The platform includes built-in support for AR and 3D models in March 2021.

3. Voice Consumer Lifestyle Trends Starts Purchases

Many consumers prioritize convenience.

According to a National Retail Federation research, 83% of shoppers prioritize convenience when buying compared to five years ago.

Voice commerce has demonstrated this feeling most clearly.

Modern retail transactions commonly begin with Amazon Echo and Google Assistant.

The voice commerce market was worth $40 billion in 2022. Amazon and Google are always thinking of ways to simplify purchases.

A 2019 study discovered that 62% of voice-activated speaker users planned to make a purchase within a month.

In 2020, 38.5% of the US population used a voice assistant monthly, and this number is predicted to increase.

In 2020, 43% of smart speaker owners shopped.

Digital assistants generate leads.

With a few billion users and a growing installed base, the major tech giants dominate the market.

Large merchants like Walmart have teamed with Apple to provide Siri-enabled voice shopping on Apple devices.

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4. Rising Use of Digital Wallets and Biometric Payments

Digital wallets and biometric payments are becoming more popular as online privacy worries escalate.

Exactly what is a digital wallet?

A digitized representation of financial accounts.

Apple Pay, Paypal, Google Pay, and Venmo let customers pay for online purchases without entering debit cards or bank information.

Importantly, digital wallets encrypt financial data. And only authorized third parties can access it.

Wallets can reduce consumer privacy and fraud problems.

Recent surveys show that two-thirds of consumers prefer digital wallets for online payments over traditional methods.

Worldpay reports that 44.5% of US eCommerce transactions are made via digital wallets.

Interest in smartphone payments is growing, with 27% of US customers expressing a desire to use them regularly.

Juniper Research estimates that over half of the global population will use digital wallets by next year.

The same report predicts US digital wallet spending would rise to $6,400 in 2024 from $3,350 in 2019.

The U.S.’s growing usage of proximity mobile payment (PMP) may also help growth.

PMP occurs when a customer pays using their phone at a physical store.

In 2019, 81% of Chinese mobile phone users conducted proximity payments, compared to 29% in the US.

Similar PMP adoption in the U.S. could boost digital wallet usage.

Although US PMP adoption has been sluggish, 2020 has had a significant impact.

From September 2019 to September 2020, Apple Pay gained 66 million new users worldwide, bringing its total to over 500 million. As of late 2020, 51% of iPhone users had activated Apple Pay, up from 48% in 2019.

Digital wallets are becoming more convenient for consumers to pool resources.

The user base of Venmo increased from 10 million in 2017 to 52 million in 2020, a 73% CAGR. In 2022, there are 83 million.

Square’s Cash App has grown significantly in the past 24 months.

The payment company’s peer-to-peer money transfer app lets users pay vendors, send money to friends, trade equities, and buy Bitcoin.

Seven million Cash App users own the Cash Card, a debit card, released in 2017.

After surpassing Venmo in downloads in 2019, Cash App has continued to expand.

The cashless payment app had 90 million downloads and 30 million monthly active users in 2020.

Zelle, a mobile payment service from major US banks, has joined the party.

Zelle is a standalone app like Venmo and Cash App that facilitates peer-to-peer transfers.

In a world of contactless payment, consumers want easier verification.

A biometric authentication allows this. Consumers can now pay using a thumbprint instead of a PIN.

Despite privacy concerns, many users choose biometric authentication.

The study indicated that 56% of consumers would rather put a biometric sensor on their credit card than a PIN.

Since 65% of mobile phone users use biometric authentication, this is doubly true for mobile payments.

And this number will rise.

Over 75% of new mobile devices use biometrics.

5. Shoppers Want Local Options. Consumer Lifestyle Trends

Local buying is growing. Doing it online.

This combo meets community, efficiency, sustainability, and convenience needs.

Hyperlocal delivery delivers nearby products.

A physical retailer that delivers or offers omnichannel services to local consumers is typical.

Retailers can meet convenience needs as more consumers purchase online.

41% of buyers are willing to pay more for same-day shipping.

Annual on-demand consumer expenditure reached $57.6 billion in 2020 and is projected to increase.

The meal delivery sector is projected to reach $161.74 billion this year.

Grubhub and Uber Eats are capitalizing on this customer trend.

But other firms have emerged in untouched niches.

One of the most successful is goPuff.

The Philadelphia firm delivers over-the-counter medicine, wellness goods, baby food, and booze online as a convenience shop.

GoPuff picks up things from local drug stores or convenience stores and delivers them in 30 minutes or less.

The company has funded $3.4 billion and offers the service in 500 US cities.

6. Buys Are Mostly Based On Reviews

Online reviews influence customer purchase patterns more than ever.

A 2020 Trustpilot research indicated that 89% of buyers worldwide check reviews before buying a product.

Over half of shoppers read 6 reviews before buying.

This trend has developed since the outbreak and reviews help online shoppers.

Power Reviews discovered that by November 2020, online review interactions led to 25% greater conversion rates than in 2019.

This trend goes beyond e-commerce.

In the 2020 Brightlocal Consumer Review Survey, 87% of consumers read online reviews for local companies.

It rose from 81% in 2019.

Reviews also help find local businesses.

Podium’s 2020 State of Reviews report found that 21% of consumers rely heavily on reviews to find local companies.

Google dominates where people locate and leave reviews.

2% of Podium respondents said they check Google for reviews first.

Podium discovered that 38% of users need a 4-star rating to engage with a business.

The average consumer has lower criteria yet still needs a 3.6 out of 5 rating to spend money.

It’s hard to discuss reviews without mentioning fakes.

Brightlocal found that 81% of consumers have encountered bogus reviews in the past year.

Google Chrome addons like Fakespot can help mitigate this issue, as most reviews are published and seen on Google.

Even though phony reviews are common, they nonetheless influence customer purchases.

Online reviews will become increasingly important as more people buy online.

7. Sustainability Tops Consumer Priorities. Consumer Lifestyle Trends

Environmentally friendly and sustainable products are gaining popularity worldwide.

Google searches for sustainable items have risen by almost 70% since 2016.

Over the past five years, 85% of worldwide customers have adjusted their purchasing behavior towards sustainability. According to Simon-Kucher & Partners’ poll.

Over 80% of consumers plan to buy eco-friendly products in the next five years.

Consumers also pay more for eco-friendly products.

Two-thirds of consumers are willing to pay more for eco-friendly products.

Younger generations, such as 25% of Gen Z and 22% of Millennials, are willing to spend up to 20% more.

The UK market for ethical and environmental goods has grown 4x in 20 years, reaching $43 billion.

Packaging matters as much as products.

McKinsey found that 55% of US customers are highly concerned about the environmental impact of packaging.

In a poll, 77% of consumers rated plastic packaging as the worst.

Consumers prefer paper and cardboard packaging.

Surveys suggest that 66% of respondents think paper and cardboard are best for the environment.

This trend is noticed by retailers.

Allbirds, a fashion manufacturer, declares their dedication to sustainability.

The firm employs natural materials such as wool, sugarcane, and eucalyptus trees to manufacture shoes.

They went carbon neutral in 2019 and started marking their products with carbon footprints in 2020.

8. Consumers Want Used Items

According to Newsweek, over 40% of retail executives expect resale (also known as “re-commerce”) to become a significant component of their business within five years.

This transition is already here for many consumers.

Half of consumers bought or sold secondhand things in 2021.

This tendency persisted during the holiday season, with 77% of adults planning to buy a secondhand item.

Secondhand purchases are made for many reasons by consumers. Saving money is the main reason, but customers also care about sustainability and supply chain issues.

The secondhand product trend is important in fashion.

The used clothes market is projected to reach $141 billion by 2023. Experts predict it will quadruple to $218 billion by 2026.

ThredUp, a popular marketplace for used clothing, reveals that 74% of consumers have or are interested in shopping for it.

Their research also showed that 41% of shoppers start with secondhand clothing. That number rises to 62% for Gen Z and Millennial shoppers.

Urban Outfitters, Free People, Anthropologie, and other companies under the URBN retail conglomerate launched Nuuly Thrift, an e-commerce portal, in late 2021 to address the customer trend.

The resale market includes 18k+ listings. Consumer Lifestyle Trends

Other industries like e-commerce.

According to eBay’s 2021 Recommerce Report, 42% of sellers list pre-owned tech products, 28% secondhand books, and 28% pre-owned toys.

Another vintage furniture site, Chairish, was founded by the co-founder of Hotwire.

New furniture manufacturers’ supply chain challenges have contributed to the company’s “exponential growth” in the previous two years.

The brand’s 2021 Home Furnishings Resale Report predicts a 54% increase in the resale market over the next five years. The segment is growing 3.5x faster than retail.

Chairish benefits as a corporation. The brand saw a 39% revenue increase in 2020 and 54% in 2021.

9. Young Consumers Like Buy Now, Pay Later

Many experts expect that buy now, pay later (BNPL) payment systems will become common in 2022.

BNPL lets customers buy and pay in interest-free installments. This payment method was previously utilized for furniture, but it’s now available for most purchases.

By 2026, BNPL is expected to account for 25% of e-commerce transactions, up from 9% in 2021.

Globally, this trend is emerging.

In three years, BNPL could account for $58 billion in e-commerce sales in China, according to experts.

BNPL options in Australia have generated A$900 million, a 55% increase from 2019 to 2020.

In Europe, the BNPL industry is increasing at 54.7% annually. Especially popular in the UK.

Consumers prefer BNPL for reasons such as avoiding credit card interest, making exclusive purchases, and avoiding credit checks.

These perks appeal to young consumers who haven’t had time or money to save for significant purchases or build credit.

According to Insider Intelligence, over 40% of BNPL consumers in 2020 were Millennials, and this generation is likely to remain the greatest percentage until 2025.

Insider Intelligence predicts 44% of Gen Z buyers will utilize BNPL by 2022.

The 2022 Global Payments Commerce and Payments Trend Report indicates that 65% of retailers expect to expand BNPL options in response to consumer demand.

Meanwhile, financial experts are warning about BNPL. Consumer Lifestyle Trends

This payment form leads to imprudent spending, they warn.

A poll indicated that 45% of BNPL users prefer the choice during financial constraints.

Furthermore, over one-third of consumers have missed payments, leading to a drop in their credit score.

Payment delays are especially common among younger generations.

43% of Gen Zers missed a payment in the past year.

Therefore, the government is trying to control the BNPL industry.

New restrictions for lenders were adopted in the UK in mid-2022.

California has been the most aggressive US state in regulating BNPL firms. The state classed BNPL as a loan, requiring new requirements.

The federal Consumer Financial Protection Bureau initiated an inquiry to assess the risks and benefits of BNPL. Affirm, Afterpay, Klarna, PayPal, and Zip must supply data.

10. Retail sales to consumers are up.

Direct-to-consumer (DTC) sales have grown rapidly alongside e-commerce sales in recent years.

Direct-to-consumer (DTC) sales eliminate wholesalers and retailers, saving brands money and offering convenience to customers.

Total DTC sales increase.

In 2019, customers spent $76.68 billion on DTC items. That number should reach $174.98 billion this year.

E-commerce sales grew from 2% of CPG sales in 2017 to 6.6% now. DTC sales drove 40% of growth.

In 2021, 6/10 consumers made a DTC purchase, with 65% planning to do so again in 2022.

Insider Intelligence estimates similar levels and shows increased DTC purchase desire.

In 2019, statistics indicate that only 59% of consumers routinely buy directly from brands. In 2022, it reached 64%.

Bombas, a sock and undergarment company, is a popular DTC brand that conducts 97% of its business online.

After appearing on Shark Tank, the company increased daily transactions from 500 to 4,000. The brand lost $15k in minutes due to DTC web platform issues due to too many orders.

The brand grew 300% year-over-year after improving its tech.

Solo Brands is a company that is optimistic about the future of DTC commerce. Solo Stove, Chubbies, Isle, and Oru Kayak are their brands.

In late 2021, the company went public on the New York Stock Exchange under the ticker symbol “DTC” with a $400 million annual revenue.

11. Companies Try to Regain Consumer Loyalty

Data demonstrates that the epidemic crushed brand loyalty.

Around 75% of customers experimented with new shopping habits during the epidemic, and nearly 40% switched companies they trusted.

In a June 2020 research, 45% of customers reported changes in their brand choices.

Many have changed their minds and tastes recently.

Half of global consumers have reassessed their life purpose and priorities, according to Accenture. Their altered thinking encompasses branding and shopping.

Over 70% expect brands to adapt to their changing requirements and goals.

Nearly 60% will switch merchants if they don’t obtain speedy and flexible delivery.

These consumers will switch brands for a more sustainable product in equal numbers.

Brand loyalty is also affected by company values and other ESG issues.

Consumers will transfer brands if they contradict their values. A 2019 survey indicates that over 80% of individuals would do so.

Retailers may retain customers by updating loyalty programs. Consumer Lifestyle Trends

These programs are popular with consumers across sectors. By 2021, the average US consumer had roughly 17 loyalty programs and actively used seven.

Antavo, a loyalty management provider, found that 80% of North American loyalty program directors want to overhaul their programs within three years.

Brands in the travel industry updated their reward programs in reaction to the outbreak.

Consumers may easily earn “elite” status on many carriers. They also made points easier to earn and extended expiration dates.

 

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