This feature is part of a series called Turning Points, in which writers explore what critical moments from this year might mean for the year ahead. You can read more by visiting the Turning Points series page.
Consumer spending is foundational to the global economy. As supply chains struggled to adapt during the Covid-19 pandemic, rapid changes in consumer demand led to shortages, then gluts, of popular items. Now, as the world settles into post-pandemic economic patterns, how and why consumers spend is changing again. Online shopping continues to grow, boosted by the rapid expansion of mobile banking and upgraded delivery infrastructure. At the same time, however, there is increasing recognition that providing products at the cheapest prices and fastest speeds possible is bad for the environment.
Earlier this year we asked a group of experts what trends they see in consumer behavior.
Their answers have been edited and condensed. — Lara McCoy
Marcos Galperin: A Few Trends That Will Define Post-Pandemic Consumption
I see five clear shifts in global consumer trends that are reshaping the post-pandemic global economy and have particular relevance for Latin America.
First, e-commerce, fintech platforms and delivery applications will continue to grow. Projections indicate that by 2025, global e-commerce revenue is expected to top $7 trillion. Recognizing this tremendous opportunity, retailers, including Mercado Libre, are investing heavily to foster growth, particularly in logistics and transportation, which remain crucial areas for development in Latin America.
The rise of virtual wallets and instant payments has ushered in a new era of financial inclusion in Latin America, where much of the population traditionally has been unbanked and an informal economy has prevailed. This transformation not only empowers individuals by enhancing their access to financial services, but revolutionizes saving, investing and financing habits across the region.
Consumption patterns in this new era will also be influenced by rising inflation. Latin Americans have a longstanding familiarity with inflationary cycles. This experience has made them increasingly conscious of their spending habits and financial decisions, allowing them to adapt and adjust as necessary. At Mercado Libre, this has been part of our daily reality for 24 years. We have learned to develop strategies that have helped us grow even in inflationary conditions.
There is a discernible shift in Latin American consumption choices: Material goods are gradually giving way to lifestyle services, such as travel and leisure. This shift aligns Latin America with the broader global trend in which individuals seek fulfillment through experiences and personal enrichment.
Another trend is the growing awareness and concern about the impact of consumption on the environment. In response to consumer demand, e-commerce companies around the world have been investing in a variety of solutions and alternatives for long- and short-distance deliveries, decarbonizing their transportation and making their logistics more efficient. For instance, packages are now delivered using low- or zero-emission electric vehicles and bicycles, as well as last-mile delivery stations.
In this new era, it is not solely the products we consume that will define us. It is the tenacity with which we embrace change. Will companies dare to reimagine their strategies and pivot toward the desires of a rapidly evolving consumer base? And will governments recognize the urgent need to foster an ecosystem that nurtures innovation and supports those who challenge the status quo?
Christine McDaniel: In America, Less Stuff and More Fun
American consumer patterns are changing again. We are seeing purchases less geared toward “stuff” and more toward adventure and recreation. Spending on retail and food services was up just slightly in July compared to the same time in 2022, and spending on soft goods like apparel, footwear and accessories has decreased across all income levels, according to a recent report from the financial services company UBS. But travel and recreation spending has increased. The U.S. Travel Association reported a 12 percent increase in air travel in July compared to the same time in 2022.
I see these trends in my own life. During the pandemic, I was perfectly happy staying at home. But then I got cabin fever. I bought a horse. Now, all I want to do is get out there.
My willingness to pay for new clothes also is not what it once was. My favorite top used to cost $28. On sale it was $19. Now, I can’t even find it, and the closest substitute is $72. Chalk it up to supply chain issues or tariffs. Or maybe, unbeknown to me, that favorite piece of clothing was being made with forced labor in China and now is no longer available because of the ban on such goods.
Regardless of the reason for the price hike, I’m not spending $72 on that top. There are two great consignment stores in my neighborhood and online bargains to be found. Apparently, I’m not the only one shopping resale. A census news release for National Thrift Store Day in August stated that the secondhand market in the United States is expected to double by 2026, reaching $82 billion. Demographic preferences are underscoring these trends: More than 60 percent of Gen Z and millennial consumers say they first look at resale items before buying new.
Americans’ thirst for experiences suggests that the dollar will reach into new pockets around the global economy. This could take a hit out of U.S. trade in everyday clothing and footwear. But keep an eye out for a prolonged uptick in activities centered on travel and recreation, with more consumers searching for resale deals.
Kyla Scanlon: Consumption Levels Are Unsustainable, But There’s Potential for Change
There are three major considerations that govern how and why we decide what to consume: immediate gratification, the cost of replacement over repair and ads. All three are driving consumers toward excessive, unsustainable consumption.
In terms of gratification, the “Amazonification” of online shopping has raised consumers’ expectations to receive the products they desire as fast as they desire. This is an absurd business model, but we have trained ourselves to expect it and ignore the environmental consequences. Because things show up neatly in a little cardboard box, it’s easy to forget about the supply chain that makes it possible.
Immediate gratification also factors into our decision to replace something rather than repair it. In general, the psychology of American consumers is that it’s better to buy a new thing instead of fixing the broken one. Now, rising labor costs make it even more likely that consumers will choose to replace rather than repair. There is also a tendency to use consumption as a way to replace negative emotions. The “little treat” economy encourages people to buy things to make themselves feel better.
That thought process is reinforced by ads. Americans are exposed to thousands of ads daily. We are essentially walking around “buy this now” signs all day, every day. To make sustainable choices, consumers have to be aware of their susceptibility to the tsunami of information about unsustainable choices that are being broadcast to us.
Consumption patterns are very trend-based, and on-demand consumption is the broad trend of the moment. But there is potential for change. There is a clear growing market for secondhand goods, but this market has become gentrified in a lot of aspects. Secondhand retail is a great concept, but if “vintage” becomes a status symbol, it can negate its original purpose. Brick-and-mortar stores are also seeing a comeback in some areas, but their success depends on the economics of local communities. Many would benefit from having a bunch of little stores, but the rents can outpace sales and make it hard for the businesses to survive.
The real solution to more sustainable consumption is for corporations to step up and truly be more sustainable — no more greenwashing or environmental, social and governance policies that don’t really change anything. Consumers likely would choose more environmentally friendly options if they were available. At the moment, however, sustainable products are hard to find and generally more expensive.
Looking ahead, it’s worth watching how people spend on experiences. The 2023 tours of Taylor Swift and Beyoncé are good examples. Millions of people have attended the shows, each spending more than $1,000 on average. More and more, people seem to want something to go to and live for, versus something to just spend money on. That’s the consumption pattern that will tell us most about consumer happiness as well as the direction of the global economy.
Daniel Yu: E-Commerce and Regional Integration Will Be Key to Meeting Consumer Demand in Africa
The total consumption of fast-moving consumer goods in Africa accounts for billions of spending annually. It’s a huge market, and it’s set to grow.
As an e-commerce entrepreneur who works in Africa, the biggest misconception I confront is the idea that the typical African consumer is looking for an e-commerce experience that mirrors that of your typical Western consumer. A stereotypical American shopper, for example, might go online looking to get organic, vegan ice cream in 10 minutes. This is not a problem that African consumers are facing. Having said that, in Africa, like in most places around the world, the most important factor in deciding whether to make a purchase is price and value.
The bulk of consumer spending in Africa, roughly 70 percent or so, is on essential household goods: basic foodstuffs like rice, sugar and flour, as well as items like soap and paper goods. And most of those purchases are made at local mom-and-pop stores that carry several different products. (For comparison, the average American supermarket has tens of thousands of different products, and an online store could have well over a million on its platform.)
E-commerce in Africa is focused on making these few dozen categories of core products more accessible and more affordable. That means finding new ways to use the existing infrastructure to get goods to consumers rather than trying to copy-paste a model from the United States or Europe that doesn’t fit the African context. Instead of attempting to create home-based delivery systems in places where there are no street names or addresses, our company, Wasoko, is selling to these small businesses, aggregating the purchasing power of a community to increase turnover to thousands of dollars a month.
To me, one of the most critical things we need to do to expand the consumer market in Central Africa is to improve regional economic integration. The majority of the highest-selling products on our platform — the core goods like rice, flour, sugar and cooking oil — are at least fully processed locally. There might be some inputs coming in from outside, but they’re being made by factories in Kenya, Tanzania or Uganda and being moved around regionally. Looking ahead, governments need to do more to enable specialization so each country can focus on what it can do best.
The framework for this integration is in place thanks to the African Continental Free Trade Area agreement which was signed by 54 countries years ago, but movement on the ground is still lacking. If we get to actual implementation, that will really open up the full economic potential of the continent.
Monica Long: Current Financial Structures Are Too Slow to Support Global Commercial Growth
The only constant about the global economy is change. This change often is seen first in developing economies, where consumers take novel approaches to adapting to it. In 2023, we saw reports from the International Monetary Fund and the Financial Stability Board specifically citing the “cryptoization” of developing economies where, because of macroeconomic instability and weak inflation controls, people have begun to prefer cryptocurrencies to their local currencies. In Argentina, Zimbabwe, and more recently, Nigeria, people increasingly are turning to crypto or U.S. dollar-backed “stablecoins” rather than their volatile home currencies for saving and making purchases.
This trend underlies the simple truth that our current financial infrastructure is too fractured, slow and expensive to serve growing global commerce. Today, many new businesses are online and global from Day 1. With the rise of cryptocurrency and blockchain technologies, it’s clear that our financial rails can and will be internet-native, in turn bringing greater accessibility and affordability to financial services for everyone. People cannot maintain their faith in a financial system that relies on systems built decades ago to move money — and that limits competition to only a few of the world’s largest institutions. This ongoing move from analog to digital-first in the world of financial infrastructure will change how commerce is conducted forever.