If the last few years have taught us anything, it’s that consumer behaviors can change fast. Brands that want to stay relevant and thrive must meet consumers where they are and deliver value.
With commerce moving increasingly online, today’s customers have come to expect convenience and speed—but with a healthy dose of personalization. Mounting economic pressures from inflation further challenge marketers to demonstrate value to keep customers loyal.
As you plan the year, keep these five consumer behavior trends in mind.
Trend #1: Omnichannel journeys are here to stay
Foot traffic is returning to brick-and-mortar stores, but consumers aren’t ready to give up the digital shopping behaviors they adopted during the pandemic. Instead, they’re using multiple channels throughout the buying journey and breaking down the walls between them. Increasingly, consumers will use the channel that best suits their needs in the moment.
But it’s not enough to have separate in-person, e-commerce, and marketplace channels. They must work together. Consumers expect these channels to interact with one another so that actions taken in one reflect in the others to deliver one seamless experience.
An omnichannel journey might look like this:
- Website: Consumers start their search by exploring product descriptions and reading user reviews online. They add a few items to their cart to compare them more easily.
- In-person: They go into a brick-and-mortar location to get more information from a knowledgeable staff member who knows they’ve already done their research. The consumer tests items and progresses one step further on the buying journey.
- App: The customer narrows down the list of items in their cart based on information gleaned in-store. After thinking about it, the customer makes the final purchase on the app.
At Starbucks, it looks like this: Customers with the Starbucks Rewards app can use it to find a nearby store, order ahead, and jump the line to pick up their drinks. The app makes targeted recommendations based on seasonal specials, order history, and even the weather. Customers can check and reload their rewards by phone, online, or in the app, and the rewards will carry over to all the channels in real-time.
Brands that provide a seamless, personalized experience across channels can delight customers and drive loyalty.
Trend #2: TikTok and Instagram are the new platforms for search
Google’s search dominance no longer stands unchallenged. As consumers leverage social and chat platforms to find and research products, marketers will need to rethink how much effort to put into catering to Google’s mighty algorithms.
While consumers may still use Google for web browsing, they also turn to Amazon to research products, to Instagram for trends, to TikTok for fun videos, and to ChatGPT, the natural language chatbot from OpenAI, for unbranded search queries.
Even Google admits that social media is encroaching on its turf. In July, a Google executive reported that about 40% of young people use TikTok and Instagram instead of Google to look up local lunch spots.
In an increasingly fragmented search space, marketers must understand each platform’s different audiences and demands. The NBA, for example, uses its TikTok channel for short, funny videos and memes, while Instagram gets news and game highlights. In another example, IKEA uses Instagram to showcase in-home images from customers who’ve bought and styled the company’s furniture and home goods.
To optimize their social media presence, brands should expand search engine optimization (SEO) strategies beyond Google to include other algorithms. In addition, they should consider tilting their spending toward video since moving images perform better than text on social channels.
Trend #3: The customer is the hero of your story
Consumers don’t want to take your word for how great your brand is. They need to hear it from other users, as well as from influencers. User-generated content (UGC) in the form of reviews or social media posts feels more authentic. And though there may be a significant outlay to generate enough user energy around the content, word of mouth is the best form of advertising.
Follow these three steps for effective UGC:
- Engage your audience. Be explicit about the types of content you’re looking for. Outdoor outfitter REI, for example, has long recognized that their customers and their outdoor lifestyles are excellent advertising. Its #reichallenge invites users to share content that shows the customer performing a challenge, such as bringing their pets to work or staying connected to the outdoors. REI reposts some of the content on its accounts.
- Build your community. Comment and share on UGC to make it a conversation. Build your brand persona to fit in with your key segment. Financial services firm Fidelity, for instance, has tapped a number of social media influencers known for topics like wellness, child-rearing, careers, and fashion and leveraging them to speak on the topic of women and money.
- Measure your impact. Use measurement tools to understand which type of content drives engagement and increases conversions. Then encourage more of it.
Trend #4: Technology continues to expand marketing’s reach
2022 was the year that artificial intelligence (AI) and machine learning (ML) went mainstream. OpenAI’s ChatGPT made a splash with its ability to generate human-sounding content in seconds. The organization’s generative AI platform for images, DALL-E, can create visual assets from natural language descriptions.
Marketers can use these platforms to quickly create first drafts of blogs and social media posts, which they then edit and refine for accuracy and brand voice.
In addition, more brands are eyeing the metaverse, the immersive digital world enabled through either augmented or virtual reality. With 400 million monthly users accessing metaverse platforms, marketers see growth potential.
Take Wendy’s. In early 2022, the fast food chain opened the Wendyverse, a hangout space within Horizon Worlds, a virtual reality community. Visitors can order from a virtual menu and play Wendy’s-themed games. They can also earn store discounts for IRL (in real life) visits.
It will be some time before brands can monetize their activities in the metaverse. By planting its flag early, Wendy’s won’t have to play catch-up when the metaverse becomes commercially relevant.
Marketers should consider how immersive experiences in the metaverse can become extensions of their brand.
Trend #5: Consumers demand attention to ESG
Consumers are prioritizing environmental and social practices in their buying decisions. According to research from Simon + Kucher & Partners, 63% of consumers have changed their buying behaviors to emphasize sustainability over the last five years. What’s more, 39% of Gen Z and 42% of Millennials are willing to pay more for sustainable products and services.
As companies align their business models to consumer concerns, marketers can create connections between consumer priorities and environmental and social impacts. Beauty brand The Body Shop does this with its #bringbackourbottles campaign to get customers to recycle their empties. With recycling bins in its stores, The Body Shop demonstrates its commitment to the circular economy while also demonstrating its willingness to listen to and act on customer concerns.
An ESG message may not work for every company, although nearly every brand can improve on environmental and social factors. Marketing to customer concerns must authentically support a brand’s core mission. The last thing you want to do is stretch the truth or outright lie about your efforts.
Ready, Set, Market
No matter the challenges in the year ahead, successful marketing comes down to one thing: knowing your customers. That’s never been more true than it is in 2023. Understanding who your customers are, where they spend their time, and their pain points will drive customer loyalty and profitability. Keeping up with the major trends driving consumer behavior is the tool you need to get 2023 off on the right foot.
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