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| | Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms
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| | | | Do you know what your customers want? This is a central question for leaders in all industries—and a particularly challenging one for consumer companies to answer, as people’s buying motivations and habits have become more unpredictable. McKinsey research shows that in the United States, consumers’ sentiment and their spending have been out of sync for the past couple of years after decades of moving in lockstep. This week, we look at how the leaders of consumer-facing businesses can better compete by recognizing and reacting to shifts in people’s purchasing decisions. | | | | | | | |
| | | The COVID-19 pandemic altered customer behaviors in ways that, five years later, continue to shape the market for consumer products. Understanding the evolution of consumers’ habits and buying decisions can help companies turn uncertainty into opportunity, according to McKinsey’s Becca Coggins, Christina Adams, Kari Alldredge, and their coauthors. They identify five pandemic-era behavioral changes that persist today—among them: Consumers spend more time alone and online, they trust brand and product recommendations from friends and family more than from social media channels, and they prefer to buy from local businesses. “It’s not that today’s consumers are irrational; it’s that the old frameworks used to decipher their behavior no longer apply,” the authors say. They suggest four strategies for consumer companies to succeed in this dynamic environment, including getting closer to their customers, tailoring their business portfolio for growth, and improving their technological capabilities. | | |
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| How many people watch a newly released movie or TV show? How long do people spend on certain websites or social media channels? Media businesses have long viewed the size of their audience and the amount of time spent engaging with their content as critical measures of success. But new McKinsey research, based on a survey of more than 7,000 global consumers, suggests that they have overlooked a critical piece of the story: the quality of time that consumers spend with their products. Senior Partners Kabir Ahuja and Marc Brodherson and their coauthors have developed a new “attention equation” that determines the amount of valuable time consumers spend on media products, based on their focus and intent. Analyzing 20 primary media arenas, they find that live experiences such as sports, amusement parks, and concerts generate the most valuable consumer attention, while digital music, radio, and podcasts rank on the low end. The attention equation can help leaders “more effectively match content to context, better understand their consumers, and invest in and monetize the most valuable attention for them,” the authors say. | | | Lead by learning what consumers want. | | | | | — Edited by Eric Quiñones, senior editor, New Jersey
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