As we move into 2024, consumer shopping habits are evolving, shaped by a combination of economic pressures and shifting preferences. According to recent research from impact.com, shoppers are spending more strategically, prioritizing value but also willing to splurge when the incentive is right. For brands looking to stand out in this landscape, understanding these trends can help drive customer engagement and increase revenue. Here are five key consumer shopping insights to navigate in 2024.
1. As Prices Rise, Shopping Behaviors Shift
The effects of inflation are clear as consumers continue to adjust their shopping behaviors. In 2023, purchases dropped by 7%, reflecting the economic uncertainty many faced. While spending on essentials like groceries and gas increased, discretionary spending took a hit, with people holding off on non-essential items until significant sale events such as Black Friday or Cyber Week.
The fourth quarter of the year remained a peak period for transactions, with 33% of all purchases occurring during this time. Consumers are now waiting for major sales to splurge, a behavior reinforced by the popularity of “Buy Now, Pay Later” (BNPL) services. BNPL usage surged by 42%, giving consumers more flexibility to buy higher-priced items during holiday sales.
2. Window Shopping is Out, Intentional Buying is In
In 2023, consumer behavior showed a shift toward more intentional purchasing. The number of clicks on product pages decreased by 29%, but the conversion rate increased by 32%. This means shoppers are being more deliberate with their purchases, focusing on what they need and researching before they buy, rather than browsing casually or making impulse purchases.
Interestingly, while overall clicks dropped, conversion rates during April and May of 2023 were similar to the holiday shopping period in November and December. These statistics indicate that consumers may already have their wish lists curated, waiting for the right deal before making their purchase.
Brands that establish partnerships and collaborations to offer early discount codes or promotions can help position themselves on those curated wish lists before the big shopping days, ensuring they’re top of mind when consumers are ready to buy.
3. Inflation Drives Up Cart Values
Even though consumers were more cautious in their spending, the average order value (AOV) still increased in 2023. This is largely due to price inflation rather than consumers purchasing more items. For example, spending in categories such as health and beauty dropped by 13%, but the AOV in the same category increased by 19%.
Consumers were making strategic choices, such as buying in bulk or switching to more affordable brands to save money. Many opted for smaller pack sizes to reduce costs. However, categories like arts and entertainment saw a significant AOV boost, with an 89% year-over-year increase in October 2023, showing that consumers are still willing to splurge in select areas.
4. Strategic Splurging Gives Consumers Access to Luxuries
In 2023, shoppers demonstrated a tendency toward strategic splurging. While overall spending decreased by 5%, some categories saw unexpected growth. Arts and entertainment, for example, experienced a 36% increase in consumer spending, while home and garden and sports categories both saw 6% growth.
This pattern highlights how consumers are balancing their budgets—they are cutting back on essentials but still finding room to indulge in luxury items when they find the right deal. Brands that provide significant discounts outside the typical holiday seasons can capture a larger share of this splurge-driven spending, especially in categories like apparel, electronics, and home goods.
5. Advertiser Spending Yields Bigger Returns
While advertising spend remained stable throughout 2023, brands saw big returns by slightly increasing partner commission rates. For example, home and garden brands that upped their advertising investment by 6% saw a proportional 6% increase in consumer spending.
This highlights the effectiveness of performance-based partnerships, where brands can maximize their return on investment by paying for results. Advertisers who strategically align with partners to increase brand awareness and offer timely discounts can better capture the attention of selective shoppers and drive more sales.
What Does This Mean for Brands in 2024?
2024 presents an opportunity for brands to leverage these shopping trends and capture the attention of budget-conscious consumers. Partnerships will play a pivotal role in helping less recognizable brands compete with household names by increasing awareness, offering discount codes, and reducing purchase risks.
Performance-based partnerships, where brands pay only for results, provide a cost-effective solution for boosting both brand visibility and conversion rates. By working with trusted partners, brands can ensure they are on consumers’ wish lists, especially during big sales events and throughout the year.
To succeed in 2024, brands need to:
- Focus on strategic partnerships that drive brand awareness and sales.
- Offer flexible payment options, like BNPL, to attract more budget-conscious shoppers.
- Provide year-round discounts and promotions to encourage splurging outside traditional holiday periods.
- Invest in advertising that aligns with consumer behavior, focusing on high-conversion periods and strategic product categories.
Final Thoughts
As consumer shopping habits evolve in response to economic factors, brands must be agile in their approach. By understanding the shift toward intentional buying, strategic splurging, and the increased use of performance-based partnerships, businesses can better navigate the 2024 landscape and secure their place in consumers' minds.
If you’re looking to build financial stability while shopping more strategically in 2024, consider using Ava Finance, a credit-building app that helps improve your credit score through everyday purchases. With Ava Finance, you can take control of your financial future while enjoying the flexibility of credit-building benefits tailored to your spending habits.
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