4 Consumer Trends that Will Shape Tomorrow

A deep dive into four global trends driving change across all sectors

BY CHARLOTTE SMITH

Originally published in Global Franchise Magazine

Living in a post-pandemic world has undoubtedly changed the way consumers go about their everyday lives. Over the past two years, many of us have found that our ambitions have changed or evolved in ways we might previously not have imagined. While on a personal level, we may have decided to take positive steps to improve our health and well-being, from a business perspective, goals that had previously been compartmentalized as long-term ambitions had to be realized even faster. Competitive brands have succeeded in speeding up digital transformations to reach customers for whom brand loyalty has dwindled and convenience is king.

Digital transformation and progression and meeting consumers’ changing expectations and needs have undoubtedly played a pivotal role in the growth of franchising in the past two years. In the face of enormous pressure and uncertainty, many franchisors have chosen an investment in new innovations over stagnation: optimizing processes and systems, breaking down silos, growing loyalty, helping communities, and working towards a better future.

In franchising, these opportunities—and our ability to jump to them—have resulted in tremendous growth and expansions. Furthermore, the pandemic unveiled a pool of talent ready to take the plunge in switching from employee to business owner.

According to the 2022 Economic Forecast for Franchising, 2021 was an exceptional year for franchising in the U.S., and this recovery trend has continued in 2022, bolstered by a strengthening labour market and steady consumer spending. But while the franchising sector continues to trend upwards alongside overall economic progression in the U.S., the overall pace of growth has moderated (due to headwinds in the economy), to a steadier and more sustainable rate.

There are certainly challenges looming large on the horizon, not least of which are rising competition and upheaval caused by global events. The tsunami of troubling news surrounding the state of the global economy reflects the struggles of many consumers, who face myriad waves of financial obstacles—not least of which is an uncertain future.

According to a recent global report by Dynata, Staying Ahead of the Downturn, many people are pessimistic about economic conditions—and perception matters, as consumers have the power to influence economies. Almost half of those surveyed “strongly” or “very much” believe we’re entering a recession (regardless of official determinations or economists’ assessments) and 56 per cent said their national leaders aren’t doing enough to fight inflation. Fifty-three per cent of consumers globally are struggling “at least slightly” to afford basic needs and almost one in four consumers globally think their personal finances will worsen. Furthermore, one in five consumers around the globe (around 19 per cent) feel “burdened” by debt, this number being higher in the U.S., Canada, and Australia.

To cope with climbing costs and the threat of a downturn or recession, many consumers are re-evaluating their lifestyles and looking at ways to reduce their overall spending—especially on non-essential purchases— as well as exploring more thrifty means to save dollars, like the secondhand market.

1. Values still matter. But the picture isn’t as simple as those conveyed by general statistics. There are generational as well as national nuances in consumer behaviour when it comes to spending decisions. While seven in every 10 baby boomers are spending less now on dining, entertainment, clothing, and travel than they were at the beginning of the year, many consumers, especially

younger generations, remain willing to spend extra on products and services that reflect their values, or are perceived as healthier and/or environmentally friendly.

According to market research by Adyen (The Retail Report 2022), impact is an important loyalty driver in the U.K., with 63 per cent of consumers believing brands have a responsibility to ensure their stock is ethically sourced and produced, and 43 per cent preferring brands that stand up for causes they believe in. And 26 per cent want to donate to good causes while they’re paying.

Gen Z and millennials, as well as consumers in China and U.S., are among those most likely to say they “almost always” or “often” pay more for something that represents their values. More than half of “values-driven” consumers also report frequently spending more on things that are local, sustainable, and have a brand that they perceive as “authentic.”

2. Choice is making consumers more discerning. The last few years have seen foundational shifts in consumer behaviour, from the changing role of the store in the purchase journey, to shoppers willing to try new brands. A brand-new Think with Google report has unveiled data that proves consumers are window shopping online more, not only searching for specific items by a particular brand but also seeing what’s available more widely, with generic queries like ‘best takeaway’ growing faster than branded queries.

Just as they do in bricks-and-mortar stores, consumers want to inspect what they’re purchasing, and there’s been a more than 40 per cent increase in search interest on YouTube for terms containing ‘review.’ Images, videos, and ads displayed on Google Search all help to build a 360-degree view of products and services.

More choice means more fickle consumers. With people spending more time window shopping online, they’re tempted by new brands more often. The online environment is also facilitating more brand trials than in store.

3. Omnichannel is the expectation. More shopping was done online during the pandemic, and that shift changed how people behave today. Consumers are now more likely to turn to the internet than a few years ago to do their shopping research, with 30 per cent of retail consumers saying they browse online most or every time they purchase in-store and 24 per cent going into a store most or every time they purchase online. Even when visiting the mall, consumers are searching online ahead of visits. As a result, omnichannel shopping is more widespread than ever.

Once they’ve narrowed down their options with online research, consumers are using the internet again to find out where to go—for example, “24-hour pizza restaurant near me.”

Both businesses and consumers now have a taste for what’s possible with tech—and now there’s no going back. Sixty-one per cent of consumers believe that retailers should deliver the same cross-channel flexibility they provided during the pandemic (The Retail Report 2022, Adyen), so it makes sense that linking online, in-app, and in-store payments with a single system—unified commerce—has proved to enhance both brand resilience and customer satisfaction. In fact, Adyen’s research shows that globally, unified commerce increases businesses’ performance by nine per cent.

4. Consumers are embracing YOLO like never before.

According to global market research by Mintel, consumers are seeking sources of joy as the continuing pandemic and other local and global crises—from political unrest to environmental threats—have caused them anxiety and stress. “Consumers need to allow themselves to feel much-needed joy and happiness,” summarizes its Global Consumer Trends 2022 report. “Consumers are looking for fun and playfulness in all areas of life. They have a new sense of appreciation for finding joy in everyday things and being in the moment.”

The pandemic prompted us to hit the reset button in many different parts of our lives. It acted as a catalyst not only for business and digital innovation—somewhere in the background, it spurred a form of personal innovation, too. According to the global GWA survey, Connecting the Dots: “What we’re seeing today are seismic changes in the collective mindset. In the past year, we’ve seen U.S. consumers feeling bolder, more adventurous, and empowered.”

Meanwhile, there’s a diminishing need to be careful and responsible: treating oneself and indulging are in the top three things that have become more important to consumers in the past year (39 per cent say this), behind saving money (53 per cent) and spending time with loved ones (47 per cent), signalling a pent-up desire to give in to temptations. “In practice, this may mean a number of things—from letting go of the safety net and normalizing quitting, to pursuing new experiences, ventures, and passions,” the report concludes. “One fruitful way for brands to stand out next year would be to align their messaging and tone of voice with this new outlook. You only live once (YOLO) campaigns that nurture consumers’ new aspirations are likely to resonate.”

Charlotte Smith is an editor and writer for Global Franchise. Published every month, Global Franchise magazine is the trusted resource for business decisionmakers looking to keep up with international franchise news, insight, analysis, and opportunities. Learn more at global-franchise.com.