More consumers are showing a willingness to splurge, and brands need to keep things personal if they want to connect with those potential big spenders, according to 5WPR’s 2024 Consumer Culture Report.
The report found that word of mouth is the most powerful tool to get consumers to open their wallets, with almost half (46 percent) saying that it is the medium that most compels them to purchase from a brand.
But word of mouth means different things to different consumers. While 71 percent of the survey participants opt for what could be seen as the old-school definition of the term as “you’re informed about a product or service by a friend or family member you know in real life,” a considerable number also consider social media to be part of the “word of mouth” definition.
Almost seven in 10 (68 percent) said customer reviews or testimonials qualify as word of mouth, and 55 percent would also include “a video that organically made its way onto your social media feed.” Perhaps not surprisingly, younger consumers were considerably more likely to think of that sort of social media content as word of mouth. Two thirds (67 percent) of those aged 16-24 were willing to do so, a number that steadily declines until it hits 40 percent for those 65 and over.
When it comes to the most likely target of their splurges, electronics & technology are at the top of the heap, as they were in 5W’s studies in 2022 and 2023. Health & wellness stayed the second-most popular sector across all three years. Travel & experiences, however, gained in popularity, rising from fifth place to third.
Overall spending tells a different story. In the coming year, survey participants predict that they will spend the most on travel & experiences, followed by dining out, clothing & fashion and health & wellness, with electronics & technology coming in fifth.
The study also looks at how brick-and-mortar shopping is holding up against its online counterpart. While 51 percent of survey participants said they prefer to browse for items online, 39 percent still prefer to do so in stores. Also, more than a third (37 percent) said that shopping in stores is something they enjoy doing alone, with 28 percent saying they think of it as a social activity they like to do with friends or family.
The survey participants also note several perks brick-and-mortar stores can offer to up their appeal—exclusive in-store deals (46 percent), exclusive in-store products (40 percent) and presenting stores as experiences or destinations (39 percent).