State of the Consumer 2024 by McKinsey & Company

At McKinsey & Company, we recognize the rapidly evolving consumer landscape. Our latest report, "State of the Consumer 2024," highlights nine critical trends that are reshaping global consumer behavior. Based on insights from over 15,000 consumers in 18 key markets, this report reveals 9 crucial trends shaping the global consumer sector.

To help businesses navigate these changes, the report outlines 4 strategic imperatives: leveraging microtargeting, investing in wellness, enhancing digital engagement, and prioritizing premium products. Understanding and acting on these insights is crucial for achieving sustained growth and maintaining a competitive edge in today’s market.

Link to the full report is in comment.

Though you might not have time to go through the 9-page report, the synthesized takeaways are an absolute must-read.

State of the Consumer 2024: Key Insights

1. Young consumers in emerging markets: By 2030, 75% of consumers in emerging markets will be aged 15-34, and they are twice as likely to choose premium brands compared to those in advanced economies.

2. Retired and ready to spend: Older consumers, especially high-income ones, are spending more on discretionary items like travel. 42% of wealthy aging consumers in emerging markets plan to spend more on entertainment, compared to 7% in Europe and 11% in the US.

3. The squeezed-but-splurging middle: Despite economic pressures, middle-income consumers in Europe and the US plan to splurge on travel, dining, and groceries, similar to high-income consumers.

4. Brand exploration: Around 50% of consumers tried new brands during pandemic supply chain disruptions. 36% plan to buy private-label products more frequently.

5. Sustainability takes a backseat: Economic uncertainty is leading fewer young consumers to prioritize sustainability, with a decline of up to 4 percentage points in willingness to pay a premium for sustainable products.

6. The worldwide wellness wave: The wellness market is worth over $1.8 trillion, growing 5-10% annually. In emerging markets, intent to spend on wellness is 2-3 times higher than in advanced markets.

7. Wellness for women: Investments in women's wellness are growing, with a higher percentage of women in emerging markets indicating an intent to splurge on beauty and personal-care products.

8. New urban hot spots: People are moving to secondary cities for better quality of life and economic opportunities. Emerging markets will continue to see urban population growth.

9. Social commerce takes flight: Social commerce is expanding rapidly in emerging markets like China and India, with Gen Z and millennials driving growth in Western markets.

Strategic Imperatives for Businesses:

1. Build microtargeting capabilities: Use consumer data to target specific microsegments and employ generative AI for personalized marketing.

2. Invest in wellness: Innovate and expand wellness product lines to meet growing demand.

3. Propel the social–digital experience: Engage consumers on social media and digital platforms, creating localized and viral digital campaigns.

4. Offer premium products where they matter: Identify categories suitable for premium offerings and implement loyalty and pricing strategies tailored to local markets.

The "State of the Consumer 2024" report by McKinsey & Company unveils profound shifts in consumer behavior worldwide. These insights not only highlight current trends but also underscore the need for businesses to be agile and forward-thinking. By embracing microtargeting, investing in wellness, enhancing digital engagement, and strategically offering premium products, companies can position themselves to meet the evolving demands of consumers. Looking ahead, those who adapt swiftly and strategically to these trends will be best positioned to drive sustained growth and secure a competitive advantage in an increasingly dynamic marketplace.

Smart AI Marketing Newsletter Article No.15

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About the author

Eva Dong is a Senior Expert Manager at McKinsey & Company, bringing a decade of AI and digital marketing experience. Her technical expertise in data science and AI empowers me to unravel the complexities of digital marketing and create significant impact. As an entrepreneur and CEO of a direct-to-consumer marketing start-up, she is dedicated to empowering marketers to seize the future of AI-driven marketing. Connect with Eva.