PREPARING FOR THE FUTURE TODAY Companies big and small plan to invest in generative AI
over the next five years. —EUROMONITOR INTERNATIONAL
As consumers’ expectations from brands continue to evolve given new technology, rising costs, and even global social challenges, companies will have to find ways to stay on top of their game.
They need to find “delightful distractions” for their customers, take more responsibility for their carbon footprint, define their stand on polarizing issues, provide practical health and wellness solutions, and continue leveraging artificial intelligence (AI) to improve their products and services—all while offering value for money amid economic uncertainty.
These are the consumer behavior highlights listed by market research firm Euromonitor International in its 2024 Consumer Trends report. The report’s data, derived from interviews, surveys and analysis, is designed to help brands “stay ahead of disruption, anticipate shopping motivations, and fulfill unmet consumer needs.”
Specifically, the report indicates six trends: Ask AI, Delightful Distractions, Greenwashed Out, Progressively Polarized, Value Hackers, and Wellness Pragmatists.
Ask AI
When generative AI skyrocketed to fame this year, both individuals and brands quickly began to explore the possibilities of such technology, especially in the realm of content creation. Now AI is influencing consumers’ decisions and reshaping their expectations of brand engagement.
These platforms will become increasingly integrated into consumers’ daily lives. According to the report, 42 percent of consumers would be comfortable with voice assistants providing personalized product information and suggested products, which means businesses should utilize generative AI to enhance and improve the overall customer experience.
In fact, the report further states that 53 percent of professionals said their company plans to invest in generative AI over the next five years. These companies expect the technology to 1) analyze customer data to create more intelligent shopping suggestions (49 percent); 2) create more targeted marketing campaigns based on consumer data (44 percent); and 3) build customer service chatbots that can mimic human interactions (44 percent).
RADICAL CHANGES 2024 promises to be another year of profound changes. Next year, brands are expected to focus on affordability and accountability as they roll out sustainability measures.
Consumers, meanwhile, are expected to keep a close watch on their spending patterns.
At the forefront of these changes are the likes of Google, which rolled out a virtual try-on feature for apparel using generative AI technology, allowing US shoppers to view how a piece of clothing looks on models with various body types and skin tones; Coca-Cola, with the help of AI, created Coca-Cola Y3000 Zero Sugar, a limited-edition beverage inspired by human and machine intelligence that has a unique flavor profile that depicts a utopian future; and French retailer Carrefour, which integrated OpenAI technologies to launch a new online shopping assistant called Hopla, where consumers can ask for product suggestions within their budget or based on dietary restrictions.
The human touch still shouldn’t be discounted, however. Less than one-fifth of consumers don’t feel comfortable using bots to answer complex customer service questions.
Delightful Distractions
The world is becoming a more stressful place to live in, and consumers are seeking an escape from daily stress and anxieties to break away from the mundane.
According to the report, some 29 percent of consumers would be comfortable with brands tracking their emotions and personalizing experiences to their moods, and 55 percent said they shop in stores with engaging experiences.
So what should these delightful distractions look like? Euromonitor says these should be done “at varying scale to deliver instant gratification and form deeper connections with customers,” whether that’s through creative messaging, emotional marketing, limited-edition merchandise, or interactive brand experiences.
One example is Fiat’s move to stop production of gray cars, and, with the goal of bringing more positivity on the road, introduce new bright colors inspired by Italy. a representation of the brand’s “Dolce Vita” values.
Greenwashed Out
Environmental concerns remain top of mind for consumers. According to the report, more than 60 percent tried to have a positive impact on the environment in 2023.
However, while consumers are attempting to live more sustainably, the report also states that they question whether companies and governments are fully utilizing available resources to create a meaningful impact. Their expectation: Organizations should step up and show proof of their eco pledges.
Thankfully, companies are taking up the task to combat the climate crisis. According to the report, 45 percent of professionals said their company plans to invest in certifications to avoid greenwashing in the next five years.
SAVING MOTHER EARTH Environmental concerns remain top of mind for consumers —EUROMONITOR INTERNATIONAL
A couple of examples cited by Euromonitor include French fashion house Chloé, which introduced the Vertical project in its spring/summer 2023 collection. Products from this line carry a digital ID on the tag in the form of a QR code that customers scan for traceability and authentication details; and UK-based site Provenance, where consumers can search for beauty and health brands with verified credentials.
What’s important, the report states further, is that brands focus on affordability and accountability as they roll out sustainability measures.
Progressively Polarized
A lot of things are going on all at once all over the world and consumers will always have a say on political and social issues. These belief systems influence perspectives, values and attitudes. Social responsibility, political affiliation and sustainability initiatives will thus motivate spending.
But while evident, Progressively Polarized behavior is also nuanced, states Euromonitor: “Certain shoppers support brands that align with their values. At the same time, consumers can also feel indifferent about corporate stances or simply don’t take these factors into consideration when shopping for particular items. They’ll search for products based on price, quality or benefits—not [corporate social responsibility] and [environmental, social and governance] efforts. Some may even steer clear of brands that promote a partisan agenda.”
Regardless, consumers know when a brand is being inauthentic, and that trust is something companies cannot afford to lose, as 52 percent of consumers stated that they only bought from companies or brands that they completely trusted in 2023.
“Consumer preferences are closely linked to the sustainability agenda, technological progress and the impact of sociopolitical issues. Companies should handle sensitive subjects with caution while staying true to their brand’s core values,” says Alison Angus, head of Innovation at Euromonitor International.
Whether brands take a stand or not, what’s highly important is their commitment to the cause and that they are ready for any backlash that comes with the territory.
Value Hackers
Inflation in almost all parts of the world has made consumers reassess their spending and saving habits. The report states that 44 percent of consumers planned to save more money in 2023, and to do so, they are employing increasingly clever strategies to get the very best deals. They know what they want, and will find a way to get those without breaking the bank.
BEAUTY STANDARDS Consumers are seeking quick and effective solutions to improve their physical and mental wellbeing.
The great thing about Value Hackers is that while they are price-conscious, they are still big on quality. For brands, this means communicating their value proposition is highly important. Extra perks or incentives also go a long way for companies, as well as loyalty programs.
Wellness Pragmatists
Finally, with consumers seeking quick and effective solutions to improve both their physical and mental wellbeing, brands that demonstrate such effectiveness will play a significant role in their purchasing decisions.
Just for beauty brands, for example, the report states that 85 percent of consumers would be willing to pay more for products with proven efficacy or benefits.
As pragmatists, these consumers also want products and solutions that fit well with their lifestyle and aren’t too much of an inconvenience. That means invasive and time-consuming solutions won’t fly with this bunch.
The report further states that data is important to these consumers, so it’s imperative that they be able to monitor their performance in real time as well as track their progress.
In terms of health and wellness challenges, 50 percent of consumers identified sleep and weight management as their two top problems, followed by stress and anxiety (48 percent).
Euromonitor asks companies to keep in mind that while these customers want fast, effective solutions, they are also realistic and aren’t expecting changes to happen overnight. They have long-term wellness goals, and as long as they see small improvements start to happen in the short term, they will remain happy customers.
Tactics
As brands navigate these trends, Euromonitor shares a few tactics that they can employ in the coming year:
Ask AI
1. Evaluate internal processes to identify opportunities for generative AI technology to improve output.
2. Adopt these tools to automate and optimize the customer experience like personalized chatbots or ads.
3. Analyze and leverage user data from generative AI integrations for targeted marketing and new product development.
Delightful Distractions
1. Incorporate playful, fun, positive messaging into customer interactions—both high- and low-touch.
2. Add pops of color, visual effects or audio in branding and product design that appeal to the senses.
3. Create memorable, feel-good moments to build stronger bonds with your audience.
Greenwashed Out
1. Develop strategic partnerships across your supply chain to reduce carbon footprint and embrace the circular economy.
2. Be forthright and factual—back-up claims with tangible proof and help your customers understand their impact.
3. Reinvest revenue or re-benchmark profit margins to manufacture products that are both affordable and sustainable.
Progressively Polarized
1. Use tools like social listening platforms or consumer surveys to track sentiment around controversial issues that impact your business.
2. Conduct thorough audience research to understand the degree to which social causes or political affiliations influence their purchase decisions.
3. Evaluate brand identity and perception before taking a stance that could alienate your core customers.
Value Hackers
1. Offer affordable options like lower-priced models or product bundles at a discount.
2. Implement loyalty or rewards programs with exclusive perks.
3. Demonstrate your value proposition and clearly communicate the benefits of your offer.—CONTRIBUTED INQ