3 things to know about the 2023 consumer

The pandemic brought about some significant changes in consumer behavior that many experts thought would become permanent fixtures on the retail landscape.

However, data now confirms that many of these behaviors — like preference for online shopping over in-store, buying goods instead of services, and grocery over restaurant dining — were either “forced” or “funded” by unique circumstances. When these circumstances faded, consumers shifted back to many of their pre-pandemic behaviors. That begs the question: Did the pandemic really change much at all?

Their insights showed the trends that are here to stay were set in motion before the pandemic even began and accelerated throughout. The discussion yielded three key points that will help retailers better connect with consumers in 2023 and beyond.

Consumers are resetting to normal

As outlined during the discussion, many pandemic-related trends were the result of “forced” or “funded” behaviors that both restricted and enhanced consumer spending, causing distortions. But, Silver said, “once those behaviors changed, either because the restrictions were lifted [or] the money that we put away as a result of the stimulus checks started to get depleted somewhat, we started to go back to behavior that we were expecting anyway.”
Annual retail sales

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In this new post-pandemic normal, the trends that will endure are those that retailers have been investing heavily in all along, like seamless shopping experiences between channels, contactless payments and customer convenience functions like buy online, pick up in store.

The pandemic accelerated adoption of many of these innovations by retailers. Consumers have become more adept at using these technologies that make their lives easier; as a result, online’s share of retail spending continues to grow on trend with overall retail sales.

Consumers are embracing the new omnichannel

“The value of the storefront is here to stay,” Hilal said. “Just the sheer amount of real estate, employees, as well as just how much these retailers are placing in that experience, it’s true to say then that this omnichannel digital store is very much a concept that will continue to stay.” The full immersive “channel-less” experience stays top of mind, she said, when considering how omnichannel looks today versus during Covid.

“In terms of buying behavior, though, the mashup of online and offline … I think it’s going to get even more difficult to make that distinction,” Silver said. “I think those retailers that are able to accept the fact that there are lots of customer journeys, a lot of paths to purchase, and the ability to personalize the experiences, accordingly, are going to be the winners.”
Consumers are prioritizing value to manage inflation

As inflation persists and the economy continues to cool, loyalty to both channels and brands has decreased as consumers look for deals and value — wherever they may find them. The enhanced omnichannel experience has further empowered consumers to research products through various touchpoints before making a purchase.

The change in consumer priorities toward value is clear through their search data. “A lot of that can be seen through query trending,” Hilal said. “It’s what we like to say at Google is just the biggest measure of intent. When we look at pricing changes, deals, promotions, these are the type of keywords we look at to see how much more a consumer is essentially looking for some of these price discounts. What ultimately ends up happening is a less loyal customer.”