Identifying What Modern Consumers Value in a Changing Marketplace
Today’s marketplace is steadily being transformed by social change and, increasingly, consumers are choosing the brands or products they use based on how they align with their needs and values. Whether it’s fair trade and ethics, sustainability, or representation, consumers want to patronise businesses with product offerings that reflect a wide range of society and the communities within them.
American consumers are becoming more “inclusive” and, according to a survey by consultant and research firm McKinsey & Company, two out of three American shoppers say that their social values help to shape their purchase choices. Almost half of those surveyed believe that retailers should actively support Black-owned businesses and brands.
These inclusive consumers are more interested in local brands than globally known ones and are making shopping choices based on this, across their groceries and household goods as well as apparel and lifestyle items. Inclusive consumers tend to be younger, female and racially diverse but they also include men and women across varied ethnic backgrounds, income levels and age groups. Given this diverse demographic, it’s no surprise that these consumers want the businesses they frequent to reflect the breadth of customers that they serve. Perceptive independent designers and retailers are well positioned to leverage this knowledge into opportunities by partnering with emerging brands and small businesses that align with what their customers are after.
While many businesses find a lot of success with a signature item that acts as a calling card for their brand, expanding their assortment frequently to include new, innovative items will attract more customers. Young consumers are eschewing popular fashion trends and are instead more likely to go for items that help them express their unique, personal style. This view tends to favor independent and emerging designers, who are able to offer pieces that are not widely known. McKinsey’s research shows that, in Australia for example, more than 30% of shoppers have tried out new brands, and more than 20% have shopped at new retailers, stores and websites since 2020. The customers who are open to change or adapting new shopping habits provide an opportunity for retailers to increase their assortment of new products and designers.
With most people acutely aware of climate change and the impact of conspicuous consumption and fast fashion on the environment, shoppers are growing an attraction to considered, niche products that appeal to their support of sustainability and eco-friendliness. Almost 70% of customers in the US say that their social values are shaping their shopping choices. Sourcing handmade pieces made from skilled artisans, working with brands that use locally sourced fabrics or deadstock materials, non-toxic beauty products or using plastic-free packaging are some of the ways that retailers can express their sustainable credentials. Gen Z customers want to purchase from brands that match with their personal values and are increasingly voting with their wallets.
About 45% of American consumers surveyed in October 2021 are in agreement that companies should do more to support Black-owned brands, suppliers and vendors. The growing support for brands and designers from diverse backgrounds have been echoed in leading fashion publications such as Vogue, Elle and WWD. The younger generation – those born after 1995 – are at the forefront of this initiative and are more likely than other shoppers to buy Black-owned brands out of a desire to support diverse entrepreneurs and businesses. They are also more likely to note that inclusivity is one of the most important factors they consider in their buying choices.
Beyond sourcing from Black-owned brands though, retailers should also offer a range of products that cater to a diverse customer group. For example, in the beauty industry, Black women are responsible for billions of the spend, but there are limited products available to them, despite their substantial buying power that amounts to about $1.3 trillion annually. Retailers can communicate their support for diversity through steps such as including Black or Asian models in their marketing materials or devoting a dedicated percentage of their shelf space to Black-owned brands (see the Fifteen Percent Pledge initiative).