Rapidly changing consumer behaviors in major industries
The United States economy is dependent upon the buying power of its consumers, leading companies to take a hard look at changes in behavior. More people are worrying about the future of the economy due to the impacts of inflation, including the rising cost of home ownership. Ultimately, these concerns are affecting consumer behaviors as people continuously reassess their priorities.
In this article, I'll take a look at some of the rapid changes we are seeing and how shifting consumer behaviors are impacting major industries.
Why do consumer behaviors change?
No matter what time of year it is, you will always be able to find relevant data on consumer behavior trends. This is because, realistically, these behaviors are constantly changing. When it comes to shopping and spending, consumers are known to change their interests and make new decisions accordingly—even if only temporarily.
Reasons for these shifts include changes in the economy, debt rates, viral trends and breaking news, public opinion, and industry innovations.
Recent changes in consumer behaviors
Some consumer behavior changes are drastic, and some occur as a direct result of industry trends. Today's changing consumer behaviors are mostly in response to the shifting economic climate. As fears grow about the economy, more consumers are looking for ways to save. This is impacting how they spend in several areas, including the following:
- Food consumption: The way we eat often changes with the seasons, but some changes in consumer behavior are in response to elements of the economy. Already, recent market insights have determined that the number one focus for consumers when shopping for food is shifting from sustainability to value (see https://bit.ly/3mqm8rB).
As more people push toward enhancing value while they shop, less room is left for anything other than the essentials. Adding to this, more people don't just want essentials—they want them in a way that brings more value. Choosing private labels and shopping in bulk are both becoming more common.
- Transportation: The transportation industry has seen its fair share of changes, with consumers taking a closer look at the future of transportation. Behaviors changed drastically in response to rising gas prices, with 75 percent of drivers sharing that they will and do change their driving habits when gas prices get too high (see https://bit.ly/3MA4rR0).
Beyond gas, consumers are also looking at transportation alternatives. When asked, more than 30 percent of drivers in an Ipsos study said that they are strongly considering investing in an electric vehicle for their next purchase (see www.ipsos.com/en-us).
Following unstable gas prices and the growing interest in sustainability, this is not a surprising shift, but it does explain why so many companies are pushing for electric vehicles.
Outside of personal transportation, we are also seeing changes in public transportation behaviors. In 2023, the public transportation industry is expected to reach $46.87 billion (see https://bit.ly/3zMC5vb). However, public transportation is seeing major shifts since the onset of COVID-19. Due to the potential risks, 42 percent of travelers are actively avoiding public transportation (see https://pwc.to/40Z5I8E).
- Shopping methods: Thanks to innovations offered by technology, we are changing the way that we shop completely. As more people explore ecommerce options and choose to shop online, it is easy to observe these changes. People continue to shop in person, but online shopping and hybrid digital models makes it easier than ever to shop from your phone. In 2023, the United States is expected to hit 300 million digital buyers (see https://bit.ly/3ZPNF3m).
As we continue to explore alternatives to traditional shopping, companies are changing how they do business. More brands are working to ensure their products are available online, with many additionally striving to reach a national or even global audience.
Business owners are using digital resources to open storefronts, as well as using platforms—like DoorDash—to ship products directly to consumers—even in other states. As new options proliferate, more consumers will adapt to the convenience that online shopping offers.
- Homes and real estate: Home prices are dropping in quite a few regions, but that doesn't mean the average consumer wants to go out and buy one. For the time being, home ownership is looking like a questionable opportunity, despite sinking prices, due to climbing mortgage rates.
In 2023, it is expected that the average monthly mortgage payment will steadily rise, much to the displeasure of potential homeowners. Today's average mortgage payment is $3,048 per month on a 30-year fixed mortgage; the monthly average is expected to increase by nearly 30 percent in 2023 alone (see https://bit.ly/3nYIWPC).
Even with the average rent rising to $1,900 per month, some may continue to rent just to save money on housing, given the cost of home ownership (https://bit.ly/3KhsAsU).
Consumers prioritize several traits when choosing their favorite brands. Still, with the growing economic unease, one trait, in particular, is standing out for 2023. When asked, consumers overwhelmingly shared that they consider price to be the top factor when staying loyal to brands (see https://bit.ly/3zMopjZ).
For confirmation of this, brands can look at the social media content surrounding changing prices in streaming services, which has led to a recent uproar. As prices rise, more consumers are looking for ways to scale back.
Navigating changes in consumer behavior
Consumer behaviors change. That is the nature of a fluctuating economy and industry advancements. Although some changes are occurring rapidly, it is important to remember that these changes can shift back just as quickly as they began.
For the time being, offer benefits that support your merchant customers during these times of uncertainty, and encourage them to do the same for their customers. A little extra care and consideration for consumers can help to establish brand loyalty that begins today and carries on well after buying habits stabilize.