In 2023, powerful forces are posing a challenge to both consumers and companies alike. In response to inflationary pressures and an uncertain economic climate, shoppers have switched up their habits in pursuit of more cost-effective solutions. Consequently, these impediments threaten commercial operations and customer satisfaction alike.
Global Consumer Insights Pulse Survey by PwC reveals that 50% of consumers are very or extremely concerned about their finances. 96% of people surveyed said they will save money in the next 6 months. People are returning to stores and traveling again, but they are using technology more to get what they want. They want easy online and in-store experiences that fit their lifestyle and budget.
Consumers are looking for ways to improve their experience. This doesn’t mean that they only want to shop online or use technology to do everything. They are still trying out new digital platforms, like the metaverse. As more and more aspects of life move online, people are worried about data security and privacy.
Companies need to keep up with the ever-changing tastes of consumers and technology to best meet these shifting preferences. Read on to know the latest trends among consumers.
42% of consumers will significantly reduce their spending due to inflation
Inflation is a major factor in dampening consumer sentiment amidst rising prices. 50% of consumers are very concerned about their financial situation, with 22% extremely so. 96% of surveyed consumers intend to adopt cost-saving measures over the next 6 months. 42% expect to significantly decrease their spending across all retail categories, while 24% plan to decrease spending on groceries.
However, 70% of consumers are willing to pay more for food produced by local farmers and for products from companies known for ethical practices.
Consumer trends reveal that 43% prefer in-store shopping
When asked how often they shopped in different places over the last 12 months, most people said they shopped in stores the most (43%). People who said they are going to spend more time shopping in stores in the next six months say they want more technology in stores. This includes things like being able to try out new products with a virtual reality headset, having entertainment in-store, and being able to book appointments with a sales adviser or personal shopper.
Consumers increasingly crave a seamless convergence of physical and digital shopping experiences, demonstrating the need for retailers to leverage technology to create an enriched ‘phygital’ experience.
Consumers were asked about how their spending and shopping behavior might change in the next six months. 43% said they plan to increase online shopping, down from 50% in the previous survey. Plans to increase shopping in physical stores dropped significantly as well, from 33% to 23%.
Supply chain disruptions are impacting consumer behavior
Consumers are increasingly shopping at multiple retailers and visiting various websites in search of the products they need, indicating a shift in day-to-day behaviors due to supply chain disruptions. This trend is even more pronounced than previously thought; 39% prefer purchasing from different outlets and 38% visit several websites for availability confirmation.
Shopping in-store continues to present frustrating obstacles for consumers, particularly regarding prices and store congestion. Availability of products is also proving a challenge in some cases.
Respondents are willing to share personal data for a better customer experience
Consumers’ interest in frictionless retail is rising. According to US figures, 82% of people are willing to share personal data for a better customer experience. This presents retailers with an interesting opportunity; not only does it reduce labor costs, but also the chance to provide customers with improved assistance and convenience in their shopping journey.
Consumers and retailers alike can benefit greatly from the advancements in digital technology. However, this does not necessarily mean a reduction of their respective workforces as new hires must be brought on and existing ones need to acquire additional training or skillsets. Given data collection is an integral component here, tech developers and retailers have a responsibility to ensure consumer privacy rights are respected while safeguarding personal information against any potential misuse or breach of security.
Shoppers are leveraging both in-store and digital shopping experiences based on what best suits their needs. Despite persisting economic uncertainties, these trends look set to remain powerful through 2023 as consumers continue capitalizing on advantages such as enhanced online delivery times or modern store tech.
Metaverse can reduce the friction between the physical and digital world
The metaverse has been receiving a considerable amount of attention lately as the potential next major step in digital technology, bridging the gap between our physical and digital worlds. As the metaverse continues to draw curiosity and exploration, consumers are embracing its possibilities. Over a quarter of individuals surveyed have participated in related activities such as using virtual reality headsets for gaming or business purposes (10%), experiencing retail environments virtually (9%), or purchasing non-fungible tokens (NFT) (9%).
As age plays a defining role in technology use, the metaverse is no exception. Survey results reflect that younger generations are embracing this new platform – with Millennials (36%) and Gen Zs (31%) leading adoption. However, only 8% of Baby Boomers and 6% of those from the Greatest Generation have experimented with it so far.
Data privacy is an increasing concern among consumers
Regarding personal data privacy when interacting with various entities, 47% of consumers said they are extremely or very concerned when engaging with social media. They have also expressed high concerns with the media in general (41%), third-party travel websites (36%), and healthcare companies (34%).
As a measure to address their concerns, 49% of the surveyed consumers said they do not share any more personal data than necessary, and 32% opt out of receiving emails, texts, and other communications. This is, however, another sort of friction as companies cannot effectively provide better value to their customers if they do not have enough data. A company’s success is highly reliant on its ability to understand and appropriately utilize customer data. While regulations strive to minimize the use of such information, business leaders must focus on establishing trustworthy systems that protect privacy while still enabling effective usage.
As shoppers navigate the modern retail landscape, it’s important to gain a comprehensive understanding of their concerns and expectations. This insight can provide an invaluable foundation for understanding existing frictions – as well as crafting strategies for eliminating them and offering a better customer experience.
Access the complete survey here.