Acosta Group Makes Five Consumer Predictions for 2025

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Dec 12, 2024, 13:30 ET

Key themes for brands, retailers, and foodservice operators include personalization, authenticity, innovation, convenience, and entertainment

JACKSONVILLE, Fla., Dec. 12, 2024 /PRNewswire/ -- Acosta Group has announced its 2025 consumer predictions, and primary takeaways include a redefined focus on value, offerings, and shopper connections and experiences. The organization's annual insights provide a clear view of evolving consumer behaviors for brands, retailers, and foodservice operators amidst ongoing economic uncertainty.

"Savvy consumers are defining what they most value, how they want to shop, and their desire for authenticity, personalized connections, innovation, convenience, and a bit of fun," said Colin Stewart, EVP, Business Intelligence, Acosta Group. Compiled by Acosta Group retail experts and industry thought leaders, the 2025 predictions are based on comprehensive research as well as studies conducted throughout the year with the company's proprietary shopper community and its brand and retail partners.

Acosta Group's Five Predictions:

A new definition of "value" drives shopper decisions
Consumers crave affordable indulgence away from home
Shoppers' in-store experience is a new canvas for retail media
Shoppers embrace effortless shopping in their social feeds
Empowered shoppers drive a wave of change in health and wellness

A NEW DEFINITION OF "VALUE" DRIVES SHOPPER DECISIONS

"Consumers have become very astute value seekers, reshaping the overall retail experience by demanding more than discounts," said Kathy Risch, SVP, Thought Leadership and Shopper Insights, Acosta Group.

While price remains key and numerous retailers are touting their price cuts on thousands of items, consumers are looking for authentic connections with brands and retailers. Those who align with shoppers' values, definitions of quality, and experiences are gaining loyalty.

Generational definitions of value:

"Low price with high quality, no extra effort to get the discount (no searching through apps), no 'must buy X number' to get a deal" – Gen Z
"Value to me means the highest quality possible at a lower price" – Millennial
"…If it is a product that amazes you, it holds great value" – Boomer

To compete, national brands should maximize impact for retailers with more-for-the-money offers and breakthrough innovation that warrants the premium. Retailers are asking for innovation to drive traffic, and 84% of consumer packaged goods brands expect to launch some form of innovation in 2025.

CONSUMERS CRAVE AFFORDABLE INDULGENCE AWAY FROM HOME

The premiumization trend is expected to grow in 2025, with consumers willing to pay for gourmet ingredients and unique flavors that reflect broad cultural influences. "Foodservice operators are being driven to elevate the consumer dining experience with distinctive, indulgent offerings, while simultaneously resetting value equations to meet consumer demand," said Risch.

"The concept of affordable indulgence is gaining traction," added Risch, further explaining that consumers are looking for value-driven menus that feature innovative flavors, gourmet presentations, and convenience.

2024 was a challenging year for foodservice operators. Fast casual has been the exception, carving out single-digit increases by focusing on food quality, consumer convenience, and narrowing the price gap with quick service restaurants. These operators also successfully and creatively responded to the demand for affordable indulgence.

The foodservice outlook remains complicated in 2025. A few important takeaways for operators:

Affordability will continue to be important to diners, as will an elevated overall experience, requiring operators across the channel to reset their pricing strategies and emphasize everyday value in their marketing plans
Amidst ongoing economic uncertainty, the "little treats" trend of permissible indulgence continues to grow, providing fun quality at agreeable price points
Successful operators are creating unusual, trendy, Instagram-worthy dishes to drive visibility and traffic

SHOPPERS' IN-STORE EXPERIENCE IS NEW CANVAS FOR RETAIL MEDIA

Most retail sales continue to occur in stores, with the seamless integration of digital retail apps, pre-trip online research, and online purchasing. Brands and retailers have recognized that stores are powerful platforms for dynamic retail media, providing opportunities to enhance shopper engagement by building personalized connections and delivering measurable value to customers. Advanced AI-driven technologies are empowering personalization tailored to individual shopper behaviors.

"In-store retail media options are vast and when executed strategically, seamlessly enrich shoppers' experiences while increasing trial, loyalty, and unit sales," explains Cody Tusberg, SVP, Retail Media, Acosta Group. "But a clear understanding of the brand's objectives and implementation costs is necessary to measure attribution and avoid creating a confusing and overstimulating shopper experience."

Smart carts are gaining positive feedback from shoppers, an alternative to storewide digital screens for retailers. Smart carts enable retailers to offer meaningful benefits, such as personalized ads based on past and current shopping behaviors, in-store app features like coupons and navigation, gamification for rewards, and convenience, according to The Food Institute and Grocery Dive.

The retailer app is the most powerful in-store media tool, combining first party data with in-store traffic insights. The challenge for retailers: helping shoppers balance the benefits of these increased levels of personalization with a perceived loss of privacy.

SHOPPERS EMBRACE EFFORTLESS SHOPPING IN THEIR SOCIAL FEEDS

Social commerce blends personalized content and commerce into a growing retail channel where brands can engage directly with shoppers. It's also a way for brands and retailers to establish digital storefronts directly on leading platforms.

"As consumers are spending more time on their social feeds, they are also spending more time using these platforms to do product research, read influencer posts, discover new products they 'didn't know they needed,' and with the convenience of a click, make a purchase they believe meets their needs or preferences," said Risch. "It's a perfect blend of entertainment, personalization, connectivity and convenience that is important for brands to build into their commerce plan," she added.

All major social media platforms are capitalizing on shopping. According to YouTube, consumers watched over 30B hours of shopping-related content on its platform over the past year. In the case of TikTok, Acosta Group found that younger generations, 52% of Gen Z and 22% of Millennials, had made a purchase in the past three months, compared to just 11% of Gen X and 3% of Baby Boomers.

87% of Americans use social media daily, according to Chain Store Age. Specific to shopping behaviors, 51% of shoppers who have used social media have clicked on a social media ad in the past three months and of those, just 24% have purchased an item using shoppable features, per Acosta Group. "Brands and retailers must continue to build a trusted relationship with consumers via their social media platforms to drive additional purchases through this channel," said Risch.

EMPOWERED SHOPPERS DRIVE A WAVE OF CHANGE IN HEALTH & WELLNESS

Health-conscious consumers are prioritizing transparency due to declining trust in traditional marketing for health messaging that they perceive to be "healthwashed," turning instead to digital tools and online communities for information.

Individualized health management is on the rise, driven by integrative medicine, telehealth, health coaches, and wearable technology that empowers consumers to make informed wellness choices. Simultaneously, health-focused influencers and online groups are increasing, carrying a potential risk of misinformation due to minimal oversight.

The "food as medicine" movement is anticipated to gain traction in 2025. In response, food and beverage innovation will continue, supporting the reaffirmation of the important role that food and nutrition play in sustaining health, preventing disease, and providing therapies for diet-related conditions.

GLP-1 weight loss medications are further shifting the definition of food as medicine, per Mintel. Brands plan to feature clear claims about key macronutrients to ensure optimal nutrition for all consumers.

Brands and retailers should:

Recognize that consumers are paying more attention to food labels and ingredients than they have in the past
Understand which health, wellness, and diet information is most important to consumers
Focus on transparency, health education, and tailored products that position them as trusted partners in consumers' health journeys

"We are excited to collaborate with brands and retailers to enhance the value we offer to their shoppers in 2025," said Stewart. "Our understanding of consumers' evolving expectations and our extensive industry expertise allow us to create targeted programs that effectively and efficiently build personalized connections, elevate shopping experiences both in-store and online, and drive loyalty and unit sales," said Stewart.

ABOUT ACOSTA GROUP

Acosta Group is a collective of the most trusted retail, marketing and foodservice agencies empowering brands and retailers to win in the modern marketplace. By delivering transformative, commerce-focused solutions and more than 97 years of expertise, Acosta Group connects the company's partners with people at every point in the consumer journey.

Comprised of Acosta, ActionLink, CORE Foodservice, Crossmark, Mosaic, Premium Retail Services, and Product Connections, Acosta Group understands and anticipates evolving consumer needs, fueling accelerated performance to connect tomorrow's commerce today. For more information, please visit acosta.group.

SOURCE Acosta Group