Consumer Trends 2023: A Post-Pandemic Business Survival Guide

A 2020 survey shows that people from emerging and developed economies have changed their shopping habits forever due to the COVID-19 pandemic. Navigating the impact of these changes has been vexing for small businesses, as ongoing struggles with inflation and supply chain disruptions have affected sales severely.

Although inflation rates may decelerate in 2023, small businesses will continue grappling with shifts in consumer demands. As a business owner, you need to identify your customers’ buying behaviors, comprehend the shopping trends that will impact your brand, and develop a proactive marketing strategy.

Top Consumer Behavior Trends in 2023

By analyzing the following data and the insights of industry leaders, business owners can shape an effective marketing approach that meets evolving consumer demands.

1. Inflation-Stricken Consumers Want More Discounts

According to Insider, 2023 is a good year for luxury resale and the high-end market. As Chanel, Hermès, and Louis Vuitton remain on top of the retail industry, mid-tier and “aspirational luxury” brands may struggle to keep up. Meanwhile, up to 19 percent of small businesses may be at risk of bankruptcy.

The rich and famous aside, the pandemic has impacted the mass population’s spending habits, leading to a shift in brand loyalty. Average consumers are more frugal, constantly on the lookout for discounts and comparing prices before making a purchase.

What You Can Do

It’s time to step up your game and get creative with your digital marketing strategies to meet the market’s ever-changing challenges and win your customers’ loyalty.

Luring in price-conscious consumers with good deals or financial incentives is a smart strategy. However, this approach may only be feasible for some brands, excluding companies already struggling with razor-thin profit margins due to rising costs. Moreover, mid-tier businesses might hesitate to offer huge discounts, as it could impact their brand’s reputation. An example is Ralph Lauren; the popular fashion label experienced revenue dips of 16 percent in 2017, as selling discounted items devalued the brand.

Another marketing tactic that attracts customers and increases conversion is bundling products or services. This strategy encourages customers to buy more items or avail more services in bulk, which 75 percent of consumers already do.

Lastly, providing gift cards with a minimum purchase can also be an effective way to drive sales, win customer loyalty, and boost gross income. In fact, 59 percent of shoppers surveyed spend more than the voucher’s value.

2. TikTok Continues to Drive Social Commerce Growth

When it comes to the hottest trend in social commerce, TikTok reigns supreme. The platform is revolutionizing the way people discover and shop for products. According to a report by TikTok for Business in 2022, the platform is 1.7 times more likely to be the primary source for product discovery than Facebook, Instagram, and other competitors.

Recently, the platform monetized the popular #TikTokMadeMeBuyIt trend, turning it into a viable marketing tool for businesses to reach potential customers.

What You Can Do

With TikTok’s growing popularity, businesses steering clear of the platform are missing out on a massive opportunity to reach the most notorious online shoppers – younger Millennials, Gen Zers, and Gen Alpha teens. About 88 percent of Gen Z consumers alone have purchased an item after watching its advertising video on TikTok.

In this day and age, investing in vertical video content optimized for mobile devices is essential. Creating engaging content for TikTok, as well as Instagram Reels and YouTube Shorts, can help you grab your target audience’s attention and boost your brand’s visibility.

3. Younger Consumers Prefer BNPL Options

Businesses tussling with inflationary pressures should consider the Buy Now, Pay Later (BNPL) option to mitigate the impact on their sales. This convenient payment method has gained significant traction recently, particularly among younger consumers.

What You Can Do

In 2021, the BNPL market was valued at $141.8 billion, and experts predict it will grow by 33.3 percent between 2021 and 2026.

By offering a BNPL option on your e-commerce website, your customers can spread out their payments, making their purchases more manageable and affordable. This, in turn, can increase sales and customer loyalty while cushioning the impact of rising costs on your business. Integrating this feature into your e-commerce store also provides a competitive advantage over other businesses not offering BNPL options.

4. Decline in Brand Loyalty Persists

You know how sometimes, you come across an item you want to buy from your favorite online shop, but another store is selling the same product for less, so you buy it from the cheaper seller instead? Millions of people are doing the same thing. Consumers are more cautious with their spending habits because most do not have as much money as before, and it doesn’t help that everything – from groceries to gas prices – is on the rise.

However, it’s not always about money. People also want to buy from stores that do good things for the environment and treat their employees well. Furthermore, even the most loyal customers will buy from a direct competitor and never look back if their go-to brand’s products are always out of stock.

What You Can Do

Maintaining loyal customers is more cost-effective than acquiring new ones, so it’s important to focus on building customer loyalty. You can do so by offering exclusive discounts and perks to your highest-paying, most valued customers.

You should also manage your inventory efficiently to avoid losing customers due to out-of-stock products, as 40 percent of online shoppers who have a negative experience (including failure to find or purchase their desired product) will go to your competitor.

As mentioned in our previous blog, many young consumers are passionate about environmental issues. Implementing a sustainability strategy and communicating your efforts to minimize your impact on the environment can help you connect with this audience on a social and emotional level.

5. Partnering With Trusted Personalities or Companies Cuts Costs

As algorithms change, boosting your social reach can prove difficult, especially due to additional factors like high Return on Ad Spend (ROAS) and strict privacy laws on third-party data. Several brands, in response, are leveraging the power of influencer marketing to reach their target demographic and tap into niche audiences. Collaborating with an online personality or reputable business that reflects your company values can increase customer interest and promote your brand to a broader audience. Plus, 30 percent of consumers say influencer recommendations are crucial to their purchasing decisions.

What You Can Do

Partnering with influencers, brands, and creators can help your business reach more customers. Aside from advertising your product or service, you can also collaborate on new products, host events, run contests, or develop marketing campaigns that appeal to your shared audience. This modern marketing approach promotes your business to their followers in exchange for payment or other incentives.

Adapt to Consumer Trends and Demands

Small business owners have faced substantial challenges in recent years. Those who survived have done so by being flexible and doubling their efforts to understand online shopping trends and demands. But as these wants and desires continue to evolve over time, businesses must remain open to feedback, diversify their supply chains, and traverse new sales channels to meet ever-changing consumer demands while maintaining financial stability. If you need help with all of the above, let’s talk about how we can improve your marketing strategy over coffee. Contact Primeview today.