2024 has been a challenging year for everyone. As the global economy shifts due to factors such as wars, Central Banks’ interest rates, and rising freight costs, consumers are trying to adapt to these macro trends. On top of this, key consumer trends are shaping the market, and businesses must strategically adapt, particularly in the areas of supply chain management and the adoption of AI to meet strategic goals. So, what are the key consumer trends in 2024, and what can businesses do about them?
Key consumer trends in 2024
Drawing on its ConsumerWise research, McKinsey & Company’s “State of the Consumer 2024: What’s now and what’s next” article identifies several key trends that businesses should be aware of as they continue to adapt:
- Young consumers in emerging markets: By 2030, 75% of consumers in emerging markets will be aged 15-34. This group, particularly in Asia and the Middle East, is willing to spend more on premium products and are more optimistic about their economies. However, Latin American consumers are an exception to this trend.
- Older consumers: Aging populations in advanced economies are spending more, particularly on discretionary items like travel and home improvement. This group also includes wealthy aging consumers in emerging markets, who are more optimistic and willing to spend than their counterparts in advanced economies.
- Middle-income consumers: Counterintuitively, middle-income consumers are still willing to splurge on certain items as much as their high-income counterparts. Dining, travel, and experiences are among the categories this group plans to spend on.
- Value and private labels: More consumers are turning to private-label products, with 36% planning to purchase them more frequently and 60% believing they offer equal or better quality. Brand loyalty is diminishing across all markets and age segments.
- Sustainability is no longer a core value: There is a noticeable decrease in the importance of sustainability in purchasing decisions among Gen Z and millennials, as they are making trade-offs due to economic uncertainty and inflation.
- Wellness wave: Spending on wellness is increasing at a rate of 5% annually in developed markets, and even higher in emerging markets. This includes gyms, vitamins, and supplements, and the trend spans all ages.
- Wellness for women: Emerging markets are spending twice as much as advanced markets on wellness for women, with a focus on Gen Z women rather than older segments.
- New urban spots: Africa is set to host the largest urban population by 2040. Additionally, consumers are moving to smaller, secondary cities in both advanced and emerging markets, seeking better income and well-being without cutting their spending. This means one of retail’s oldest rules continues to be valid: location, location, location.
- Social commerce: While markets such as China, India, UAE, and Brazil are quite mature in the adoption of social commerce (searching and buying products directly through social media and content creation platforms), advanced markets lag behind. However, Gen Z consumers lead this type of spending.
Strategic business adaptations
These trends highlight significant opportunities and challenges. Here’s how businesses, particularly technology services companies, can help their clients adapt:
Supply chain forecasting and planning
The ability to forecast demand and plan supply accurately is crucial. Many solutions now come with embedded AI capabilities that allow for faster adaptation and more efficient data processing. Knowing what, when, and where to act is more relevant today than ever, considering potential disruptions (e.g., COVID-19, pirate attacks on maritime routes, etc.).
Implementing AI-driven supply chain solutions, such as Blue Yonder Demand, LDE, Fulfillment, and Enterprise Supply Planning, can help manage disruptions and enhance operational efficiency. Technology partners can also assist in creating a business case for these projects, leveraging clients’ existing data to optimize supply chain processes.
Use of generative AI in business processes
Generative AI can enhance offerings by creating new application features and micro-segmenting consumers. Features such as “copilots” or client service bots on websites are practical uses of generative AI. These AI-driven chatbots can address over 80% of client issues, allowing organizations to focus on strategic, value-adding tasks.
Generative AI is also extremely useful for accelerating feature development, such as the features and capabilities we just mentioned. Since the inception of the first generative AI models, Softtek has been incorporating innovations as they happen in a consistent and structured way to improve our software delivery process and bring those capabilities to our clients.
Social-digital experience
A robust social-digital experience can be revolutionary for businesses by integrating marketing strategies, sales microservices, and demand and supply planning solutions. An example of this is connecting social platforms with the backend systems to support real-time inventory management, accurate demand forecasting, and efficient supply chain operations. That way, if a product becomes popular on social media, the system can automatically adjust inventory levels and reorder supplies to meet the increased demand. This can prevent stockouts and overstock situations. This type of initiative helps businesses to respond swiftly to market trends, such as the wave of increased wellness spending and the social commerce boom.
Israel Tavizon is Softtek's Offer Director for Blue Yonder services in Hispanic America. With a comprehensive background in supply chain management and a PMP certification, he has worked with McKinsey & Company, Blue Yonder, and Walmart Mexico, where he honed his analytical and business management expertise.
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