As we navigate through 2024, the consumer landscape is rapidly evolving, influenced by economic pressures, demographic shifts, and changing priorities.

McKinsey’s latest insights reveal that the most influential consumers of tomorrow are already emerging.

Here are nine key trends defining the future consumer and what they will want in the coming years.

1. Young People in Emerging Markets

By 2030, 75% of consumers in emerging markets will be between the ages of 15 and 34, making them a powerful force in the global economy.

McKinsey’s research indicates that young consumers in regions like Asia and the Middle East are particularly optimistic about their economic futures and are willing to spend. This group, especially those aged 18 to 24 in countries like India and Saudi Arabia, shows a strong preference for premium products and are up to two times more likely to trade up to higher-priced brands compared to their peers in advanced economies. Additionally, they are three times more optimistic about their economies, which could drive significant growth in consumer spending in these regions.

In contrast, young consumers in Latin America are less inclined to trade up, indicating regional variations in consumer confidence and spending habits.

2. Retired and Ready to Spend

As life expectancies increase and birth rates decline, particularly in advanced economies, the global population of consumers over 65 is growing faster than younger demographics.

Despite this, marketers often overlook older consumers.

McKinsey’s findings reveal that aging consumers, especially those with higher incomes, are willing to spend on discretionary items like travel, home improvement, and gardening. In fact, high-income baby boomers and the Silent Generation in the U.S. make up 30% of the market and are more likely to splurge on these categories than their lower-income counterparts. Moreover, wealthy aging consumers in emerging markets, such as those in Asia, are even more optimistic and plan to increase their spending on entertainment and other discretionary items.

Ignoring this demographic could mean missing out on a lucrative market segment.

3. The Squeezed-but-Splurging Middle Class

Despite the financial pressures from rising costs of living, middle-income consumers in advanced economies are not cutting back as much as expected.

Instead, McKinsey’s data shows that these consumers are splurging on discretionary items such as travel, dining out, and groceries at rates comparable to higher-income consumers. Interestingly, middle-income consumers are only slightly more likely to delay purchases than wealthier consumers, and they are not significantly more inclined to trade down to cheaper alternatives.

This resilience suggests that middle-income consumers remain a critical market segment, even in economically challenging times, with their spending habits defying traditional expectations.

4. Lower Brand Loyalty

Brand loyalty is weakening across all demographic groups, a trend that began during the pandemic and has persisted in the face of economic uncertainty.

McKinsey reports that over a third of consumers in advanced markets have tried different brands, and approximately 40% have switched retailers in search of better prices and discounts. This trend is not limited to younger consumers; older consumers, who were once consistently loyal, are now just as likely to explore new brands and retailers.

The rise of private labels is a significant outcome of this shift, with 36% of consumers planning to purchase private-label products more frequently and 60% believing that private brands offer equal or better quality than traditional brands.

5. Sustainability Less Important

While sustainability has been a growing concern for consumers, especially younger ones, economic pressures are causing a shift in priorities.

McKinsey’s 2024 data shows that fewer Gen Zers and Millennials in Europe and the U.S. rank sustainability claims as an important purchasing factor compared to the previous year. The percentage of young consumers willing to pay a premium for sustainable products has declined by up to four percentage points across various categories, including personal care and apparel.

This trend suggests that while sustainability remains important, affordability is taking precedence as consumers navigate economic challenges.

6. The Worldwide Wellness Wave

The global wellness market, valued at over $1.8 trillion, is growing rapidly, with an annual growth rate of 5-10%.

McKinsey’s research highlights that while wellness products and services are in high demand in advanced economies, emerging markets like China, India, and the Middle East are seeing even faster growth. Consumers in these regions are two to three times more likely to increase their spending on wellness products than their counterparts in developed markets. This trend spans generations, with Gen Z, Millennials, and even older cohorts like Gen X and Baby Boomers contributing to the growth in wellness spending.

As the global population continues to prioritize health and well-being, the wellness market is set to be a significant driver of consumer spending.

7. Health and Beauty for Women

Investments in women’s wellness are on the rise, with McKinsey estimating that closing the women’s health gap could be worth $1 trillion annually by 2040.

In emerging markets, 48% of women indicate a strong intent to splurge on beauty and personal-care products, compared to 27% in advanced markets. Young women, particularly Gen Z, are leading this trend, with increased spending expected on personal-care goods and services.

As innovation in women’s health continues, the market for women’s wellness products is likely to expand significantly, offering businesses substantial opportunities to cater to this growing segment.

8. The New Urban Hot Spots

Urbanization is reshaping where and how consumers spend, with significant migration patterns affecting global consumption.

In the U.S., consumers are moving from large cities in the Pacific Northwest and Northeast to “secondary cities” in the South and West, where the cost of living is lower, and remote work opportunities are abundant. These secondary cities are seeing higher levels of consumer spending, with residents just as likely to splurge as those in larger cities.

Emerging markets, such as India and China, are also experiencing rapid urban population growth, with an increasing number of middle-class households in both tier-one and tier-two cities.

By 2040, Africa is projected to have the largest urban population globally, further highlighting the importance of urban centers as key markets for consumer goods and services.

9. Social Commerce Takes Flight

Social commerce, where consumers shop directly through social media platforms, is gaining traction, especially in emerging markets like China and India.

McKinsey reports that social commerce markets in these countries are maturing rapidly, with consumers spending significantly more through social media than in traditional e-commerce channels. In contrast, adoption in Western markets has been slower, but growth is expected, with the U.S. social commerce market projected to reach $145 billion by 2027, up from $67 billion today. Gen Z and Millennials are driving this trend, making purchases on social media four times more often than older generations.

For businesses, integrating social commerce into their strategies could unlock significant new revenue streams as this trend continues to expand globally.

Understanding these nine key trends will be crucial for businesses aiming to capture and retain market share in a rapidly changing global market.

To read the full McKinsey consumer report, click here.