People are living, shopping, and spending differently as they strike a balance between adapting to a “new normal” and clinging to traditional habits of the past. They seem suspended in a gray area, torn between prioritizing brand loyalty, convenience, and values-driven purchases that bring peace of mind. To help us and our clients understand this new consumer mindset—and anticipate future concerns—we partnered with Resonate, a leading AI-driven consumer data and intelligence company, to gather fresh research. Their data set includes more than 14,000 attributes that describe upward of 230 million U.S. individuals.
The result is a deep insight into today’s consumer sentiment that businesses can use as they compete to win over today’s consumers—to meet them where (and how) they spend. Who are they? What do they want?
The answers to those questions have shifted so much in the past few years. Here’s what we learned with Resonate—and what you might be able to do to win consumer loyalty moving forward.
In a world of uncertainty, offer stability
The finding: Resonate has been tracking consumer concerns regarding the economic impact of COVID-19, the war in Ukraine, and rising inflation.
In the spring of 2020, more than 30% of consumers were concerned about the economy “to an extremely large extent,” while those who were only concerned “to a moderate extent” made up roughly 15%. By the fall of 2022, the number of extremely concerned consumers dropped below 20%. Interestingly enough, those who were moderately concerned increased by more than 10%.
“It’s a really fascinating trend,” says Ericka Podesta McCoy, Resonate’s chief marketing officer. “More people have moved into this moderate state of concern regarding economic and health uncertainty.”
The analysis: After existing in an environment where challenges seem to be a constant, some consumers appear to be conditioned to expect them. The good news is that they may give your business more leeway in the face of supply chain issues or short staffing.
The more challenging aspect of this data is that your customers and clients now exist in a seemingly permanent sense of moderate anxiety: They don’t know what’s coming next, but they’re on edge in anticipation of it. This may make it harder for them to make buying decisions or choose to switch from one brand to another.
What businesses can do: By understanding exactly what stresses specific groups of consumers (and more specifically, those you are trying to serve and attract), you can not only attend to their needs through your goods or services—you may also help them feel better about their situation overall.
Balance personalization and privacy with customer data
The finding: Shoppers are more impressionable now than during other periods in history. In their “Next in Personalization 2021 Report,” McKinsey & Co. found that 75% of consumers adopted new shopping behaviors during the pandemic.Disclosure 1 For many, this meant trying a new brand or engaging in new digital shopping experiences.
The analysis: Data governance is going to be a hot topic in 2023. Brands must strike a balance between getting personal and being privacy compliant—or, to put it another way, create a value exchange in which consumers willingly part with sensitive data for the promise of unique, resonant experiences that positively impact their lives.
The General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) give consumers more control over their personal data—and restrict how companies are allowed to manage and use it. These regulations can be tricky hurdles for brands to navigate, especially when trying to offer the tailored experiences that consumers have come to expect.
What businesses can do: Make a plan to personalize consumer experiences, but along the way, analyze your approach. Does the way you collect consumer data reflect your brand values? Are you crossing a line in using it—or might your customers view it that way? How is their data delivering a solid customer experience? How can you better communicate how the data can help you help them? Can you implement new systems to protect their data and privacy?
Tap into values-based consumer spending
The finding: A growing segment of consumers is putting its money where its morals are. And beginning around the middle of the 2010s, these consumer activists started doing so in ways beyond just boycotts of products and services. More and more, it’s becoming a movement where people actually spend time searching for brands whose values align with their own.
Consumer activism isn’t practiced only by younger generations. In fact, the movement comprises diverse demographics. According to a Washington Post/Kaiser Family Foundation poll, almost half of people who said they recently attended a political rally or protest were 50 or older, 26% of them earned $100,000 or more annually, and more than 60% had at least some college education.Disclosure 2
The analysis: Businesses that fail to align with their consumers’ values—or who don’t prioritize those values in marketing messaging—could be leaving money on the table.
That’s because consumer activism is about wielding buying power to effect social and environmental change, often pressuring companies to act on issues such as diversity and inclusion or sustainability.
“[Consumer activists] are a very important and growing customer segment,” says Podesta McCoy. “It’s crucial to understand how they feel about your brand’s stance on certain issues. Specifically, sustainability, which will be a huge trend for 2023.”
What businesses can do: Look at how effectively and inclusively you are communicating with consumers. Do they know your brand story? Your leaders’ and organization’s core values? Is there more you want to do for your workplace, your community, and the individuals in those places? Or are you doing plenty but could better showcase what you’ve been doing all along? Do the faces and stories on your website reflect or appeal to your target audience?
Take action soon
Companies today, note the experts at Resonate, can’t afford to do nothing. As brands try to keep pace with today’s changing consumer landscape, they need to do more than deliver the same experiences—however amazing they may be.
Like consumers, companies will evolve by creating new experiences that are relevant and respectful and are values-based, valuable, and (for thriftier audiences) a good value for the spend. The best place to begin, perhaps, is by remembering one thing that hasn’t changed: your authentic desire to understand and meet your customers’ needs.
“Consumers understand there’s a transactional relationship regarding their data. What brands do with it is the value exchange they expect. If you’re delivering a great customer experience, then you have consumers who are very happy with the personalization.”
Ericka Podesta McCoy
Chief Marketing Officer, Resonate