Consumers are changing, can brands keep up?

Right now, two forces in the consumer market are rewriting the rules at the same time. On one hand, technology is penetrating at an accelerated pace: AI assistants start to filter brands and generate answers for consumers, while social platforms have become the new generation of decision-making entry points. On the other hand, there is continuous price pressure: careful budgeting is no longer a passive choice for low-income groups, but an active behavior across all income tiers.

The intersection of the two forces is changing the certainties that brands are familiar with. In the past, whoever ranked higher on the search page and occupied a better position on the shelf could win the business. Now, consumers may complete the whole process from awareness to decision in the AI dialog box, and brands have to fight again even for the chance to be seen.

McKinsey's *2026 State of the Consumer* report, based on nearly 4,900 consumer surveys and global client practices, summarizes the consumer landscape under the collision of these two forces into four major trends that determine how consumers discover, make decisions, and spend money.

The entry point of purchase is moving from the search box to the dialog box

In the past two decades, the most familiar set of strategies for brands was built on a clear path: consumers have demands, enter keywords in search engines, click links, compare, and place orders. Search is a "high-intent" link where brands compete for exposure and divert traffic back to their official websites.

McKinsey's survey shows that 60% of Gen Z (the generation born between 1995 and 2009) frequently use the "AI overview" feature at the top of traditional search pages, while only 29% of Baby Boomers (the generation born between 1946 and 1964) do so. 28% of Gen Z are already shopping with generative AI tools, nearly twice the proportion of Baby Boomers (16%). The role of social platforms is also changing: in the brand discovery stage, 23% of Gen Z discover new brands through social media; by the purchase decision stage, this proportion rises to 34%, far exceeding other channels. However, a counter-intuitive figure shows that although social media is the most important discovery and decision-making channel for Gen Z, its trust level is the lowest among all channels.

The more direct impact on brands lies in the traffic side. Since 2023, open web traffic has dropped by 8%. When AI-generated answers directly address users' questions, click-through behaviors disappear.

Brands' own official websites are almost "voiceless" in this migration. McKinsey's analysis of about 2.6 million cited sources from 25 FMCG brands shows that among the sources cited by large language models, official brand websites only account for 1%. In other words, the official websites that brands have spent more than a decade carefully building barely exist in the eyes of AI. Forums, retailer reviews, blogs, and video platforms are all participating in shaping AI's description of brands, making the information ecosystem extremely fragmented.

This brings a new capability requirement. In addition to traditional SEO, brands have begun to focus on Generative Engine Optimization (GEO), whose core is to make AI reference themselves more easily and accurately: build official websites with clear structures that are easy to crawl, actively disclose previously undisclosed product information, and strengthen public relations and third-party endorsements. When information in forums and reviews contradicts each other, causing "signal distortion", it will be more difficult for AI to present a brand stably and accurately.

Looking further ahead, AI is entering the final link of the purchase chain. Agentic commerce will bring a "dual front door": consumers can either purchase through retailers' AI tools or place orders directly on generative AI platforms. Companies including Shopify, Amazon and Walmart have begun to align around AI transaction standards. This will consolidate the position of large digital marketplaces and omni-channel retailers as destinations for "discovery, research and purchase", while brands face deeper tensions: the platforms bring scale and conversion, but cut off the direct connection and data relationship between brands and consumers.

Health has become a checklist, but no one can tick all the boxes

Consumers are paying more attention to health, and the term "health" itself is expanding. It is no longer just "not being sick", but covers a series of dimensions such as heart health, cognitive function, sleep, stress, and gut health.

McKinsey's survey shows that most consumers consider these areas important to them, but less than half feel that they have achieved their health goals, with a particularly obvious gap in Germany and France. This is a typical state of "knowing what to do but being unable to do it".

The key variable driving this expansion is technology. Smart watches, continuous glucose monitors, and fitness trackers enable real-time measurement of sleep quality, blood glucose levels, nutritional intake, and heart health. The utilization rate is very high: 75% of Gen Z and 73% of Millennials (the generation born between 1981 and 1996) are using such tools, the proportion for Gen X is 55%, and only 32% for Baby Boomers. 22% of consumers will consult large models for health issues, and the proportion rises to 26% among Gen Z. When health is divided into measurable figures, consumers' goals become more specific and more demanding. Feedback becomes instant, and behavior changes may also be faster: if you drank alcohol the night before and see a low "sleep score" on your wearable device the next day, you may not drink next time.

Another variable is GLP-1 drugs, which turn "weight management" from a willpower issue into an intervenable health indicator. As of July 2024, about one in six American families has at least one member who has tried GLP-1, and these families have reduced their grocery expenditure by about 6% in the six months after medication. However, it should be noted that 34% of users stop taking the drug within six months, and their expenditure then returns to the pre-medication level. Regional differences are also significant: with patent expiration and low-cost options entering the market in Brazil, demand is likely to accelerate; while the penetration rate in Europe is still around 2%. The combination of technical equipment and drugs has pushed health from a vague wish to a bunch of specific, trackable and intervenable indicators.

For consumer companies, the popularization of real-time health data is both a risk and an opportunity. About half of consumers are actively reducing their intake of artificial additives, highly processed foods, sugar and alcohol, while looking for foods rich in protein and fiber. The impact goes far beyond food: GLP-1 is linked to muscle loss, which has spurred innovations for muscle preservation and bone density protection. When the general concept of "health" gives way to specific needs driven by life stages, long-neglected fields such as gut health and metabolic aging are gaining attention.

McKinsey divides health-conscious consumers into five categories, among whom the "minimalist optimizers" are the most noteworthy: they actively try products and technologies with scientific evidence, mostly Gen Z and Millennials, accounting for about 25% of health consumers but contributing more than 40% of the market expenditure. The other category, "health strugglers", represents the other side: they attach great importance to health, but often get frustrated because the goals are too difficult to achieve. The rest include "health traditionalists" who rely on existing habits, "confident enthusiasts" who are sure of their own pace, and "health slackers" with low overall participation. To serve these segmented groups well, faster and more iterative concept development and more precise segmentation are required, which is exactly where AI can help.

Consumption is increasingly for "memories" rather than "possessions"

When wallets are tightened, consumers do not simply spend less, but reallocate their money. McKinsey's data shows that from 2023 to 2025, the global experience market grows by 2.6%, while the non-essential goods market only grows by 0.8%.

There are more detailed layers behind this contrast. Travel is growing faster, and from 2023 to 2025, the travel experience market (including sightseeing, air tickets and accommodation) grows by 4.4%. As another major experience category, the growth rate of catering has slowed to 1.2%. Money does not flow equally to all experiences, but concentrates on scenarios that can bring "memorable" feelings. The luxury hotel market grows by nearly 6%, while the overall hotel market grows by about 3.5%, indicating that consumers are willing to pay a premium for a few truly important experiences, while carefully budgeting in other links.

This preference has even changed the use of physical spaces. In 2025, American landlords leased more commercial space to service industry tenants than to traditional retailers, among which health, fitness and experience-based formats grew the fastest.

The report uses one sentence to explain the underlying logic: Consumers are replacing "possession" with "meaning and memory". The satisfaction brought by a physical object will decay over time, while an experience will precipitate into memory and identity recognition.

It is worth noting that the boundary of "experience" goes far beyond travel and performances. The report finds that when asked "what would you do to reward yourself with an extra $200", the most common answer across all generations is "save it for a vacation", especially for Baby Boomers. Digital and home experiences are also becoming supplements or even substitutes for offline experiences. 12% of Gen Z say they will spend extra income on home entertainment, twice the proportion of Baby Boomers. From streaming media to games to social platforms, all are competing for the same share of time.

This means that even if brands sell physical products, they need to think about how to package them as an experience. Pop Mart is a typical case: leveraging the global popularity of LABUBU blind boxes in 2025, the company expanded its theme park in Beijing, and added a new "LABUBU Forest" zone in May 2026, extending the IP popularity from shelves to offline scenarios that can be visited repeatedly, making the park an extension of the IP flywheel.

The common point of these practices is that experience not only deepens participation, but also strengthens brand identity through memorable and repeatable moments. The report also reminds that experience investment needs to clarify exactly what kind of feeling it wants to deliver: time spent with others, relaxation, excitement, or learning. If it is not clear enough, the experience is likely to be superficial and bring poor returns.

Careful budgeting has changed from "having no choice" to "I'm in control"

If the first three trends are about "what consumers want", the fourth trend is about "how they do the math".

More than three quarters of consumers have "downgraded consumption" behaviors: switching to cheaper brands, smaller packages, or using more affordable ways to meet the same needs. However, this is no longer a passive choice for low-income groups. High-income consumers are more likely to take certain money-saving measures than low-income ones, such as DIY maintenance and using budget tools.

Among the four typical behaviors, second-hand transactions have entered the mainstream, with clothing being the largest category, followed by electronic products and furniture. Maintenance is also making a comeback, especially in the fashion, home and consumer electronics sectors. The report shows that 82% of consumers will extend the service life of items before replacing them, 69% choose to repair instead of discard, and 68% are actively reducing waste. DIY is also becoming popular, with home maintenance, personal care and gardening being the most likely areas for people to do it themselves.

Careful budgeting has also changed from "making do with what you have" to an active choice to be proud of. The report mentions that the popular "buy nothing" challenge on social media (where consumers publicly promise not to shop for a period of time) shows that "less consumption" itself has gained cultural recognition. For some people, the driving force behind saving money is not just about saving, but about buying better things under the same budget, or enjoying the process of "finding a hidden gem".

However, "careful budgeting" does not mean "not spending money". Part of the budget saved by consumers flows to places that are considered "worth it": health, experiences, and products that can bring a clear sense of value. The question brands need to answer has also become clearer: can they give sufficient reasons to prove that "the product is worth the price".

Under the background of long-term cost pressure and rational consumption, what brands can do is to make budget-friendliness their own competitiveness: transparent pricing, durable quality, repairable design, and clear value proposition. When even high-income groups are actively calculating their accounts, vague brand premiums will be cut first.

Behind these trends is the same underlying change: Consumers are becoming more aware of their own needs than brands are. Technology makes their discovery and decision-making more autonomous, health tools make them more aware of their own bodies, experience preferences make them clearer about what is worth spending on, and budgeting habits make them more alert to inflated premiums. The information asymmetry that brands used to rely on is being eliminated layer by layer.

At the same time, the acceleration of technology is constantly creating new problem-solving tools. AI allows brands to iterate products faster, segment crowds more accurately, and reach consumers who really care about value more efficiently. This tests what brands do with these tools: whether to be more stubborn in promoting products, or to truly understand consumers who are harder to persuade.

This article is from the WeChat official account "HSG Insights" (ID: Sequoiacap), author: Hong Shan, published with authorization from 36Kr.