Benzinga - by Aaron Bry, Benzinga Editor.
Many of the rapid changes brought about by the COVID-19 pandemic have reversed and started to normalize. More and more people are going to work back in the office. Travel numbers are almost back to pre-pandemic levels.
But some consumer trends appear to be here to stay. According to McKinsey’s quarterly insights report, more than half of American consumers said they plan to continue to use a product or service they first used during the pandemic, such as grocery delivery.
McKinsey tracked which trends consumers said they enjoyed, and then how they spent their money, which showed some divergence.
Here are some of the consumer trends that McKinsey highlighted:
Trading Down and Splurging Selectively:
McKinsey pointed out that many consumers around the world are opting for cheaper, private-label brands vs branded products. Think ‘off-brand’ goods at retailers like Walmart Inc (NYSE: WMT) or Target Corp (NYSE: TGT). Saving money by buying off-brand staples like toilet paper or paper towels allows consumers to splurge and spend that money in other areas like travel and eating out.
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Sticking With New Channels Tried During COVID-19
Another trend that McKinsey highlighted shows that American consumers are likely to continue to use new shopping channels that they first tried during the pandemic. This includes services like grocery delivery and social commerce, such as purchasing goods on Meta Platforms Inc’s (NASDAQ: META) Facebook Marketplace.
Sticking With The Classics, But Also Trying New Brands
McKinsey found that big brands grew 50% during the COVID-19 pandemic, but that doesn’t mean that consumers weren’t also giving newer companies a try. McKinsey’s report states that younger consumers are more likely to believe that newer is better, “Gen Zers and millennials… are five times more likely than older generations to believe that newer brands are better or more innovative than established brands.”
Demanding Sustainability And Affordability
Anyone who goes out of their way to purchase environmentally friendly products knows that you usually pay a premium compared to standard products that are less sustainable. McKinsey found that while more and more younger consumers are seeking out brands that prioritize sustainability, they are unsure if they are willing to pay more for those products compared to standard ones.
Still, McKinsey’s insights show that sustainable brands are growing at a faster rate than their counterparts.
Another consumer trend that grew during the pandemic worth mentioning is “buy now, pay later” services offered by companies like Affirm Holding (NASDAQ: AFRM). Some consumers have already begun to struggle with repayments for holiday purchases, according to CNBC.
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