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Consumers Enter 2024 with Cautious Optimism and Shifting Shopping Habits

Consumers Enter 2024 with Economic Anxieties Thawing but New Shopping Habits Taking Hold

Latest surveys detect glimmers of stabilizing sentiment as inflationary pressures modestly relieve. But ongoing inflation/rate/job uncertainty persists, translated by still prudent spending plans. Within that consumer caution, research also reveals more permanent shifts in marketplace versus search engine preferences reshaping initial product discovery.

Key Points

  • Low double-digit rises in economic positivity and free spending intentions
  • Inflation easing sustains consumer resilience though budgets remain squeezed
  • Online purchasing intent continues gradual acceleration
  • Marketplaces cede dominance to search engines for initiating hunts
  • Platform policy friction and macroeconomic drivers underpin changing habits

As 2024 begins, new survey data reveals a slight rise in economic optimism among consumers compared to last year. Research firm Attest found 71% of Americans feel positive about the upcoming year, a nearly 7 percentage point increase versus 2022 sentiment. The number feeling “very positive” specifically jumped 7% to 33%.

Spending outlooks align with this cautious optimism. Over half of respondents noted their 2024 spending would remain measured, though this figure dropped almost 6%. Nearly a quarter expect to spend freely, up from 2022.

E-commerce preferences gained traction for non-food purchases too. 39% of shoppers now say they will transact mostly or exclusively online, a 5.5% year-over-year increase. Still over a third plan to balance digital and in-store shopping.

However, initial product discovery habits shift away from marketplaces in 2024. Only 40% of consumers will start hunts on the likes of Amazon now versus 51% last year, an over 11 percentage point slide. Instead, 29% plan to first search directly on Google or other engines, almost a 5% uptick.

What’s Driving Consumers Towards Search?

Monitoring marketplace policy impacts, optimizing specialization outside Amazon’s long tail, and matching or exceeding search engines on price transparency could collectively win back product discovery interest long term.

Marketplace policy changes

Platforms like Amazon and eBay have faced growing public scrutiny over seller conduct and counterfeit products. Recent policy overhauls around vetting merchants, social responsibility pledges, and improved reporting aim to address these but may have inadvertently eroded some consumer trust.

Marketplace saturation and homogenization

The ubiquity of major marketplaces could ironically now frustrate customers with impersonal, homogeneous experiences lacking product uniqueness or personalization. Many shoppers feel marketplaces increasingly prioritize their own private label brands too. This fuels desire for alternative channels.

Economic incentives and discounts

As inflation squeezed household budgets over 2023, consumers aggressively sought deals, coupons and price guarantee programs which search engines efficiently surface. Marketplaces conceive of themselves as value destinations yet lower visibility on discounted item indexes may be backfiring currently.

Specific product preferences

Search engines may serve categories like high-consideration purchases, gifts, niche hobby items etc. better given ability to deeply explore, compare and verify specialized offerings available globally. Generic marketplaces now cater more to convenience purchase commodities.

The research highlights evolving omnichannel behaviors to engage customers. While e-commerce gains wallet share, store visibility and experience stays relevant to many. Marketplaces also appear to lose discovery dominance as search and other channels prove effective.

Interestingly, over half of 2023 consumers want more humorous and fun advertising, believing it builds stronger connections. But only 35% seek “reassuring” messaging, representing a 4 percentage point decrease – perhaps given economic anxiety easing slightly.

Brands must track complex consumer psyche shifts in 2024 across channels and preferences. Agile adjustments to tone, offerings and engagement strategies can turn optimism into tangible business growth.

Consumer Optimism

The uptick in 2023 consumer optimism and spending intent as the year closes out likely correlates with incremental improvement across key economic measures entering the new year.

Inflation eased to 6.5% in December from 7.1% in November, indicating some price stability which encourages household outlooks. Additionally, healthy labor market gains continued with 223,000 jobs added in December and unemployment holding at 3.5% – preserving incomes.

Gas prices, which severely damaged sentiment in 2022, have also lowered over 40% from $5/gallon peaks last summer to averages around $3 now. This puts hundreds of dollars per month back in consumers’ pockets.

Further, household debt levels and delinquency rates remain stable, suggesting many consumers managed to brace through economic turbulence reasonably well so far. Market volatility has also cooled, with 401ks and investments recovering, rebuilding sentiment.

With this marginally improved inflation/jobs/energy cost backdrop entering 2024 compared to sharper pain points in mid-late 2023, consumers feel secure enough to cautiously restart some discretionary spend delays. But sentiment remains guarded given interest and food costs still squeeze budgets.

Ongoing tracking of inflation trajectories, hiring demand, consumer default rates and gas prices will determine whether current stable-to-improving economic indicators either bolster or undermine consumer optimism and purchase appetite quarter-by-quarter in the year ahead.

While the 2024 outlook reflects mildly improving consumer optimism, brands must track sentiment fluctuations quarterly tied to inflation/energy/jobs. They also need to realign engagement strategies to capitalized on ecommerce tailwinds but mitigate erosion on marketplaces through differentiation and incentives.

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