This report surveyed over 2,300 US consumers to look at the impact of Black/African American, Hispanic/Latin, AAPI, and LGBTQIA+ consumers’ brand perceptions and purchase behaviors, with a focus on Gen Z. 81% of Gen Z said that diverse voices have either some or a large amount of influence on them when making decisions. 57% of all consumers say that multicultural people have a big influence on their brand preferences and choices. Brands should prioritize outreach to multicultural and diverse consumers as opposed to adopting a siloed approach.

This report covers 10 insights into the preferences, attitudes, and buying behaviors of Gen Z. With Gen Z being the largest demographic group in the US, even a small segment of this population can significantly impact brands. This group tends to be renters and faces challenges in home ownership, shaping their purchasing behaviors. Social media heavily influences their shopping habits, with loyalty driven more by personal values and influencers' opinions than brand identity. They also prefer mobile-first experiences and expect seamless digital customer experiences from brands.

The Empathy Gap explains why we often underestimate how much a buyer's emotional state can influence their behavior and decisions. People — including your customers — suck at predicting how they'll feel and act in the future. Avoid asking customers to predict what they'll want (or buy) in the future when doing customer research and instead find the answer in their past behavior patterns. Factor in “hot” emotional states, like hunger or frustration, in advertising while also framing your product as the solution. Leverage buyers' rational emotional state to sell subscriptions by framing the purchase as a way to prevent a future “hot” emotional state.

87% of shoppers make at least half of their purchases online, while 39% of consumers return an item purchased online at least once a month. 52% of consumers say they have submitted a fake return at least once in their lifetime, up from 36% last year. The majority of consumers are open to exchanges or store credit instead of full refunds — if the returns process is easy. Research also suggests that consumers choose where to shop based on a retailer's available return options.

The phenomenon of "cheapflation" has emerged as a significant trend in consumer behavior, particularly in the context of rising inflation rates. As prices surged, many consumers began to gravitate towards lower-cost goods, believing that this shift would help them save money. However, recent research by Harvard Business School Professor Alberto Cavallo and his coauthor Oleksiy Kryvtsov reveals that this strategy may not have been as effective as consumers anticipated. Their analysis, which examined millions of products across more than 90 major retailers in ten countries, found that the prices of budget brands increased at a faster rate than those of premium brands during the inflationary period. Specifically, in the United States, the prices of the cheapest food items rose by 30% from January 2020 to May 2024, compared to a 22% increase for the most expensive food products. This trend indicates that the expected savings from switching to cheaper alternatives were largely negated by the rapid price increases of those very products. The researchers identified several factors contributing to this "cheapflation" phenomenon. One key reason is the heightened demand for lower-priced items as consumers sought to manage their grocery expenses amidst rising costs. Additionally, targeted fiscal stimulus measures may have further fueled this demand. The reliance of cheaper products on global supply chains, which faced disruptions during the COVID-19 pandemic, also played a role in driving up prices. Furthermore, the profit margins for budget brands are often tighter, leading manufacturers to increase prices more aggressively in response to rising supply costs. Interestingly, even after inflation rates began to stabilize, the relative prices of cheaper products remained elevated. This persistent price gap has contributed to consumer perceptions that prices are excessively high, not only in comparison to historical levels but also relative to more expensive alternatives. The research highlights a broader trend where the economic landscape has shifted, leaving consumers grappling with the reality that budget options may no longer provide the financial relief they once did. In summary, the concept of cheapflation underscores the complexities of consumer behavior in an inflationary environment, revealing that the anticipated benefits of switching to budget brands may have been overstated. As prices for these products continue to rise, consumers are left to navigate a challenging economic landscape where their purchasing power is increasingly strained.