U.S. Consumer Sentiment
Consumer sentiment rebounded sharply from the depths of the pandemic and peak inflation as the CPI cooled and the Fed paused interest rate hikes in Q2 2023. Despite ongoing recession debate, consumer sentiment drastically improved in H1 2023 with higher income terciles exceeding lower income terciles in short-term outlook.
Source: University of Michigan Consumer Sentiment Survey, February 2023
Consumer Behaviors
Consumers are getting back in stride with their pre-pandemic lives and developing new shopping behaviors.
MINDLESS TO MINDFUL
Price sensitive with cost-of-living crisis
ESG and DEI conscious
Brands should not be a distraction
Transparent and authentic digital experiences
But, tech can't always match human connection
HYPER-PERSONALIZATION
A need, not a want
Low loyalty environment
Personalized in real time
Requires data and analytics
The Personalization Paradox
CONNECTED COMMERCE
Omnichannel is table stakes
The Influencer Economy (and debunking TikTok)
Game on! Mass market gamification
Fin tech driving payment flexibility
Battle won in customer experience
Source: NRF, Convenience.org, Euromonitor, Forrester, Madison Marquette Retail Research
The Cycles of Consumer Disruption
COVID-19 ushered in the 3rd & 4th major disruptions in the past 70 years of how consumers shop.
ERA OF EFFICIENCY
Time Period
1950s - 1999
Dominant Spenders
The Greatest, The Silent, Baby Boomers, Gen X rising
Known for
Pragmatism but shopping for more, newer, better
Customer Drivers
Consumption, convenience, more stuff, more stores
Innovation & Disruption
Credit cards, home electronics, growing globalism, first generation of e-commerce
ERA OF EXPERIENCE
Time Period
2000s - 2019
Dominant Spenders
Baby Boomers, Gen X, Millennials, Gen Z rising, birth of Alpha
Known for
Experiences/services replace products & things
Customer Drivers
FOMO, co-creation, instant gratification, sustainability, social
Innovation & Disruption
Digital economy, e-commerce growth and penetration, DNB, everything on-demand
ERA OF ESSENTIAL
Time Period
2020 - 2021
Dominant Spenders
Baby Boomers, Gen X, Millennials, Gen Z, birth of Alpha
Known for
Scarcity mentality, safety, convenience, stockpiling
Customer Drivers
Availability, health & safety, at-home lifestyle, DIY
Innovation & Disruption
Omnichannel, digital acceleration, supply chain, DTC, curbside, livestreaming, health & wellness
ERA OF DISCOVERY
Time Period
2021 - 2023
Dominant Spenders
Baby Boomers, Gen X, Millennials, Gen Z, Alpha influence
Known for
Reemerging, new rituals, wanderlust, gathering
Customer Drivers
Discovery, adventure connection, purpose, personalization
Innovation & Disruption
Omniretail integration, Social Commerce, the Influencer Economy, new tech stack
Source: Gensler, Madison Marquette Retail Research
Consumers by the Top 5 Spending Generational Cohorts
Generational characteristics and influences on consumer profiles and shopping behaviors.
BABY BOOMER
BORN
1946 - 1964
POPULATION
68 million
buying power
$2.6 trillion
PREFERRED CHANNEL
In-store, adapted to digital
PREFERRED PAYMENTS
Cash, checks, debit & credit cards
PURCHASING FACTORS
Forced adoption of digital; desktop over mobile; high expectations of customer service; social media doesn't influence shopping habits/purchase; more financial stability and less impacted by COVID-19.
GEN X
BORN
1965 - 1980
POPULATION
65 million
buying power
$2.4 trillion
preferred channel
Research online, buy in-store
PREFERRED PAYMENTS
Credit & debit cards, PayPal
PURCHASING FACTORS
The Forgotten Gen by marketing & brands; customer service builds loyalty; conservative spending; high levels of COVID-19 related stress and financial strain due to caretaking rolls for multiple generations.
MILLENNIALS (GEN Y)
BORN
1981 - 1996
population
82 million
buying power
$1.4 trillion
preferred channel
Omnichannel, varies by age
PREFERRED PAYMENTS
Credit, debit & prepaid cards, PayPal, apps
PURCHASING FACTORS
Shopping is a social event in-person & digitally; social media & crowd sourcing influences purchases; life stage shifting; personalization; financially most insecure; spending impacted most by pandemic.
GEN Z
BORN
1997 - 2012
population
86 million
buying power
$150 billion
preferred channel
Omnichannel, digital bricks
PREFERRED PAYMENTS
Prepaid cards, apps, digital wallets, crypto
PURCHASING FACTORS
Digital natives with innate digital habits; enjoys high-tech socialization in-store; sustainability; social activists; value-oriented; influenced by consumer-generated content; world view shaped by pandemic.
ALPHA
BORN
2013 - 2025
population
2 billion in 2025
buying power
Influences $500B
preferred channel
Social media, video, livestream
PREFERRED PAYMENTS
Prepaid cards, shadow debit cards, crypto
PURCHASING FACTORS
Social, global, and mobile; smart phone natives; voice interaction; VR - AR natives; active consumers; influence household purchases; spend 2X the time watching YouTube videos than older gens.
Source: Gensler, Madison Marquette Retail Research, Smart Asset 2021, Pew Research, Shopify