Consumer Buying Trends

The global wellness market has exploded to $1.8 trillion, with the U.S. alone contributing $480 billion to this growing sector, and growing 5-10% annually.

What makes this growth particularly striking is its cross-generational appeal-- consumers from Gen Z to Baby Boomers are increasingly prioritizing health and wellness products. In fact, 82% of American consumers now rank wellness as a top priority in their daily lives, while 73% of UK shoppers share the same focus. Much of this momentum is being led by Gen Z and Millennials, especially in areas like weight management and functional foods that promise to "boost energy" or "support health."

This trend is equally strong in Europe, where wellness spending has remained resilient, even in the face of inflation. Unlike other premium sectors, wellness continues to attract consumer spending, especially towards women’s wellness—a sector projected to reach $1 trillion by 2040. For CPG brands, this opens up significant opportunities to tap into a growing market.

Brand loyalty is losing its grip as consumers increasingly prioritize value, quality, and trust. The pandemic accelerated this shift, with supply chain issues prompting consumers to switch brands -- and the trend hasn’t slowed down. According to EY, 60% of US consumers and 53% of Europeans buy branded products only when on sale or with promotions  Globally, 38% have no intention of returning to branded products after trying private labels, believing these alternatives offer equal or better quality. Gen Z and Millennials are particularly embracing "dupe culture," where finding affordable alternatives to high-end products has become both a necessity and a trend.

Retailers are capitalizing on this shift by promoting private labels with prime shelf space and competitive pricing. No longer just imitating branded products, retailers are using real-time data to innovate their offerings and meet consumer demands faster than traditional CPG companies.

Sustainability has been a strong motivator, with 85% of global consumers feeling the effects of climate change and 46% actively buying more sustainable products. But as inflation has bitten hard, many consumers—particularly Gen Z and Millennials—prioritized affordability over eco-consciousness in 2024, as compared to 2023. Although consumers in Europe and the US say they’re willing to pay nearly 10% more for sustainable products, this willingness has declined by up to four percentage points across categories.

This poses a challenge for brands that have leaned heavily on sustainability as a differentiator. Consumers still care about environmental impact, but cost has become a major factor. Brands that can balance sustainability with affordability, and focus on tangible benefits like waste reduction or eco-friendly packaging, will have greater impact on today’s value-conscious consumer.

AI is easily 2024’s most game-changing trend, with one in three consumers already using platforms like ChatGPT. But there’s a twist: despite its potential to transform the consumer experience—from personalized recommendations to optimized pricing— consumers don’t fully trust AI-generated content. And while 99.6% of CPG and retail executives are experimenting with generative AI in some capacity, only 31% are prioritizing it in their budgets. This suggests that many retailers are still in the experimentation phase, which may explain why consumers haven't yet experienced its full benefits. There’s a clear gap between AI’s potential and consumer trust.

For CPG brands, AI offers powerful tools for smarter decision-making, from identifying the next best ingredient or product, to optimizing SKUs and promotions. According to Bain, CPG companies are already experimenting with AI-led design modeling and innovation. But to fully capitalize on AI, businesses must build trust with consumers by maintaining transparency and showing them the benefits of AI-driven solutions.

Social commerce is booming, with US sales projected to hit $145 billion by 2027. Gen Z and Millennials are driving this growth, being four times more likely than older generations to make purchases directly on social platforms. TikTok Shop is leading the charge, responsible for 68% of social shopping gross merchandise value (GMV) in early 2024, with 81% of sales coming from repeat customers. Since its launch in September 2023, over 11% of US households have purchased items via TikTok Shop; additionally, 17% of users have reached out to brands through direct messages (DMs) for customer service, with DMs becoming the preferred channel among younger generations.

As consumers grow more familiar with social shopping, confidence in buying through platforms like TikTok and Instagram is increasing, though trust in these platforms may remain a hurdle for some.

CPG companies are increasingly adopting direct-to-consumer (D2C) models to connect more closely with their customers. No longer relying only on traditional retail channels, brands are launching websites, subscription models, pop-up stores, and social selling marketplaces to engage consumers directly. This allows them to manage pricing, control brand messaging, and gather first-party data to better understand and connect with their customers.

D2C strategies and loyalty are closely linked, providing a direct connection that helps build out first-party data and deepen customer relationships. But according to Forrester research, while most US customers are signed up for grocery store loyalty programs, only about 7% of US online shoppers are members of a CPG brand’s loyalty program. That’s about to change, as brands make efforts to bridge this gap. General Mills’ Good Rewards app allows customers to upload receipts and earn points, while Pepsico’s Tasty Rewards program offers sweepstakes and exclusive coupons to its most loyal users.

Despite their digital-savvy reputation, Gen Z values in-person shopping experiences just as much, if not more, than online ones. According to Archrival, 74% of Gen Z prefer in-store experiences for fashion and beauty purchases (compared to 66% of millennials), and 68% prefer to try products before they buy. Although they use social media for product discovery, brick-and-mortar stores are growing central to how they shop. This has led to a resurgence of the mall experience for Gen Z, with upgraded shopping centers becoming popular destinations for both socializing and shopping. Gen Z wants more than just convenience—they’re looking for immersive, community-based shopping experiences that bridge their online and offline worlds.

Moving beyond broad demographic marketing to focus on micro-segmentation is becoming an essential marketing strategy. By leveraging AI and data analytics, brands can create highly personalized experiences based on consumer behavior, preferences, and purchase history—unlocking deeper engagement. But CPG brands face a significant challenge: access to crucial first-party data needed for tailored marketing. To succeed, brands must invest in ways to collect and use first-party data effectively:

As the demand for health and wellness products skyrockets, CPG brands have an opportunity to align their product lines and marketing strategies with this growing consumer focus. Wellness now goes beyond just products; it encompasses experiences, lifestyle benefits, and rewards that enhance overall well-being. For brands looking to stay ahead, the key is to introduce wellness-oriented offerings that truly resonate with consumers' evolving needs and preferences.

Social media has become a dominant platform for product discovery, shopping, and engagement, especially for younger Gen Z and Millennial consumers. To succeed in this space, CPG brands must develop social media strategies that align with the unique culture of each platform, making posts not only engaging but shoppable. By collaborating with influencers and tapping into the creator economy, brands can expand their reach and build stronger relationships with consumers.

Tapping into cultural moments and running interactive contests is a powerful way for brands to create buzz, boost consumer engagement—and re-engagement. As shopping becomes more about the experience, consumers increasingly look for entertainment and excitement in their interactions with brands. By aligning with pop culture trends or launching gamified and instant-win promotions, CPG brands can create excitement, incentivize participation, and, along with it, gain valuable first-party data.

With consumers seeking value in some categories and premium experiences in others, CPG brands must adjust their loyalty programs to reward where it matters most. By offering a range of products and implementing tiered loyalty programs, brands can address the varying preferences of their customers, keeping them engaged and encouraging repeat purchases. A thoughtful approach that balances affordability with exclusive rewards can drive both retention and deeper brand loyalty. This can be in the form of:

Today’s consumers increasingly seek brands that reflect their personal values in areas of sustainability, social responsibility, and charitable initiatives. But with recent trends showing that many are less willing to pay a premium for products with sustainability claims unless the value is clear and tangible, CPG brands must go beyond surface-level claims and genuinely demonstrate their commitment to these causes. By integrating these values into their offerings and proving that they "walk the talk," brands can foster deeper connections, build long-term loyalty, and create a sense of community and purpose.

With 76% of consumers concerned about how their data is used, trust-building is essential for brands to maintain loyalty and engagement. CPG brands must embrace transparency and demonstrate responsible data practices. Offering personalization based on consumer data can enhance customer experience, but it must be done with clear communication and respect for privacy. By being open about how data is collected, used, and protected, brands can build consumer trust in a data-wary world.

Today’s consumers expect a seamless blend of online and offline shopping, making flexibility key for CPG brands looking to meet their needs. Despite their digital-first habits, many Gen Z and Millennial consumers still value immersive in-store experiences, even as they shop online or on social media. By creating hybrid shopping environments that blend the convenience of digital with engaging in-person elements, CPG brands can build stronger connections and loyalty.