The State of Consumers in 2023: The Great Disconnection

Alright friends, it’s a new year and we’re kicking off my 2023 newsletter articles with a BANG. So buckle up, and maybe put on some chill music in the background or light a candle because this topic is going to get a bit intense at times.

A week ago I presented to the HubSpot Marketing organization about the state of consumers in 2023 and I wanted to share some of the highlights (and lowlights) because –in my opinion–these shifts in attitude, behavior and habits are some of the most significant ones we’ve seen in a long time.

Before I jump in though I just want to give a shout out to Kipp Bodnar and Chloe Tambe at Hubspot for investing in things like this. They partner with Reforge for Teams (shout out to Kevin Weiss ) to bring global operators into their teams to lead discussions and trainings around Growth, Marketing, Product and Engineering. Not only are these discussions great for inspiring new ways of thinking for their teams, but joyful for us as operators because we get to see these insights applied to real business problems that drive meaningful revenue for category leading companies. Anyway, I just love to see it. I’ve always believed we’re stronger together, and this is the sort of thing that separates great companies from the rest.

Okay, so on to the topic at hand: The State of Consumers in 2023, and what I genuinely believe can only be described as “The Great Disconnection.” Let’s talk about some of the bigger changes and why they matter. And let’s do it with some data, some very wild data.

Truth #1: Consumers are digitally drained.

Wild Stat: About a third of US consumers say that since the pandemic began, they have felt overwhelmed by technology. That’s higher for WFH employees with no kids (40%) and even higher for WFH parents (43%). In fact, 45% of consumers have 41+ digital devices (WHAT?!) and 46% of consumers have 11+ digital subscriptions.

You might be thinking “oh Joanna, that’s not novel information - this 'make everything digital' has been a trend for a while now."

But, here is the thing - we used to like it.

Pre-pandemic we were all craving new ways to track our lives, our progress, our health, and connect with every possible device. We bragged about it actually. But the real shift is…we aren’t happy about it anymore. The pandemic made us crave a “great disconnection” and a chance to be free from it all. And that is a wild change when you think about consumer behavior.

I personally was shocked to evaluate my own behavior and think about the fact that in *just* the last year I canceled my Whoop (because I had just had enough), started running outside more instead of riding my peloton, stopped tracking my daily meals (after like 13 years of doing it!), and canceled MasterClass and started picking up books again. Want to hear something really wild? The other day I wanted to learn something so I asked someone who knew about it to…meet me for coffee and then we DISCUSSED IT. Yeah, crazy talk, I realize.

These are just a few examples, but I am craving disconnection from the digital world, and craving connection to the *real* world. And consumers are doing the same.

Truth #2: Consumers are lonelier than ever.

Wild Stat: More than 60% of US adults are self-classifying as lonely, that’s a 7+ point increase since pre-pandemic. That’s even higher for underrepresented racial groups (75%+), higher for low income people (63%) and higher for younger adults between 18-24 (79%).?

This one breaks my heart. But I get it. We are spiking higher across all spectrums of loneliness: (1) emotional loneliness (less relationships), (2) social loneliness (lacking a sense of belonging) and (3) existential loneliness (lacking a sense of purpose and identity).?

Consumers are turning to us as brands and companies to find new ways for them to connect with each other and find purpose more generally.?

Truth #3: Consumers are bored, like really, really bored.

This is partly an outcome from the rise in loneliness. Come to find out the lonelier we feel, the more depression we see, the lower self-esteem we have, the higher our stress AND the more bored we are. Ugh, yeah, sooooo.

Wild Stat: Because we are more bored, our shopping patterns are changing in big ways. In fact almost 30% of consumers report making more purchases out of boredom (vs. intentionally).

This trend is only growing, so as marketers we need to be aware that the traditional funnel (awareness, consideration, conversion and loyalty) is getting reworked in BIG ways.

We’ll need to be thinking more deeply about cross-channel messaging, personalization, timing, and effective trigger based campaigns. We’ll basically need to be thinking about how we create “serendipity” in the consumer shopping journey.?

Truth #4: Consumers are worried.

Wild Stat: With the looming economic concerns and general global unease, over 60% of consumers are cutting back spending. And 87% say that, given their concerns over the economy, a discount offer would more strongly influence their purchase decision right now.?

I mean I hearrrr this. The price of eggs, am I right?

But seriously, this one really sits with me because I am hearing it and seeing it across my clients and companies I advise. Retention rates are softening, conversion rates are lessening, and there seems to be an increase in discount seeking and a more frugal mindset.?

This will require us to deeply understand our customers - their fears, concerns, upcoming challenges and find news and authentic ways to speak to them. This will also likely require us to revisit our pricing, promotional and merchandising strategy over the next couple of years.

Truth #5: Consumers are mixing it up.

So perk up for this one, because this is super interesting to me.

Wild Stat: Over 75% of consumers report trying new shopping behaviors, with over 39% of them deserting trusted brands for new ones. This is more prevalent in Gen Z and millennials, so you know, basically your current or future target audience.

Personally I get it. I mean I’ve spent an insane amount of money with lululemon over the years (yes, I am pretty BASIC, and I love it, so let’s move on). But this past year someone mentioned Vuori and given its a great product at a more affordable price, I switched. Poof! I switched off a brand that was a huge part of my identity when I was CMO of ClassPass, a brand I used to just wander stores for the fun of it, and a brand I just love. And I can’t really explain how that happened. But it did.

So this is why this one is interesting - as marketing leaders we’re going to be pulling our CEOs aside and saying things like “well something has just changed, and the data can’t really explain it” and they are not going to love us for it.

But something is changing. Premium loyalty is less powerful, and novelty and discovery of new brands is taking hold of our share of wallet. So this is going to require the category leaders to step up, and the category challengers to run fast. They say “winners are made in down markets” and this is what they mean.

Okay, so there are some of the bigger changes we’re seeing. Individually they might not feel too crazy, but if you sum it up:

Consumers today are disconnecting from us at unprecedented rates. They are lonelier, more bored, and more worried than ever before. And they are mixing it up, like really mixing it up.

And we as marketers and brands, and leaders are going to need to make sense of his noise.?

No small task. I’ve got a lot of ideas on how this will change the brand and growth landscape, but given this has gotten so long, I’ll save that for another day.

But I’d love to hear if you’re seeing these changes in your consumers and communities? Let’s hear it in the comments!