2023 consumer spend and how experiential can help brands to ride the wave

Examining online activity and conversations, Brandwatch identified several trends around how consumer shopping habits have adapted to the rising cost of living. Here’s an overview:

Rather than avoiding buying a particular product to save money, an increasing number of consumers are switching to cheaper alternatives of the same products, with online discussions regarding off-brand products increasing by 11% in the last 12 months. Yet, this hasn’t led to the acceptance of these products being lower in quality as negative conversations outweigh the positive with individuals unimpressed by their purchases.

Brands recognise the value of experience to retain loyal customers and avoid off-brand switches, with product sampling a continually growing and successful form of activation, allowing the unique taste and new flavours to get straight into the hands and mouths of consumers. A recent survey to measure the impact of sampling revealed 63% of consumers to purchase the product they sampled- read more about the effectiveness of sampling campaigns in our blog here.

The adoption of a more sustainable lifestyle has become increasingly important for many consumers in recent years, with the number of online conversations on the topic rising by 12% last year. However, the majority of the discussions were centred around the difficulty of affording living an eco-friendly lifestyle, and the result: many can’t make it a priority. Yet this doesn’t mean that they care any less, with consumers still very much continuing to track brands' sustainable efforts and customer loyalty heavily impacted.

One of the most impactful ways to demonstrate commitment to sustainability is through live experience, with an increasing amount of brands incorporating it into key messaging in their marketing. Adidas is a prime example of a brand dedicating live experience to immerse consumers in their sustainable ethos with numerous sustainable pop-ups. But the value of implementing these efforts into the materials of the activation itself is also on the rise as brands recognise the ability to create builds more sustainably, as well as re-using them for tours across the country or repurposing for various campaigns.

However, something that does allow consumers to prioritise sustainability on a limited budget is buying second-hand goods. Purchasing recycled or repurposed items has significantly risen in recent years, with online conversations increasing 21% last year in comparison to 2021. More and more brands are entering the resale market in an attempt to keep up with the trend and improve their sustainability status.

But this trend isn’t just limited to brands with products that are simply able to re-sell pre-loved goods- live events provide the ideal platform for brands to collaborate and align values to deliver a memorable experience. The Absolut Swap Shop is a perfect example of this, where alcohol brand Absolut partnered up with fashion campaigner Harry Lambert, to celebrate the launch of the new limited edition bottle through a sustainable fashion swap shop.

Forbes article on how consumer behaviour will change in 2023 predicted that many consumers will have banked significant savings from the pandemic that will spur them on to spend more in 2023, whilst still spending with caution. The acceleration of buy now, pay later offerings could also contribute to an increase in spend, allowing consumers to purchase without the immediate cash and spread the repayments over a period of time. But what are the facts?

The Office for National Statistics data confirms several trends:

Comparing spend in June 2021 to June 2023, retail sales value (how much people are spending) and sales volume diverge- essentially meaning as people spend more, the amount of products they are purchasing has decreased. Although on the face of it spending has increased, in reality: as inflation has increased, people have been forced to spend more, but the amount they are buying has actually decreased.

Looking specifically at this year’s trends:

• Inflation has begun to ease in recent months
• Wages have seen a recent boost, yet still fail to keep pace with inflation
• Comparing spend from Q1 2023 to Q2 2023, the amount spent continues to rise, yet the rate of growth has begun to slow
• Comparing volume from Q1 2023 to Q2 2023, the quantity bought has actually risen approx. 0.4%- likely due to the recent pay boost and the easing of inflation

Despite the clear trend that consumers are purchasing less due to rising costs, when considering spend over the last 10 years- the proportion of total income spent on experiences has increased by 15%, compared to a drop of 20% of income spent on possessions. This change is the equivalent to a boost in the UK experience economy of around £750 million, reflecting the significance of live experience regardless of the economy. So when considering the shift in consumer purchasing behaviour as a result of rising costs, it's evident that providing memorable brand experiences holds greater value than ever before. The emerging and growing trends of: off-brand purchases, sustainability, and second-hand purchases, provide further opportunity for brands to reach consumers, retain loyalty, and show their worth through live experience.