These 5 trends will shape how consumers spend their money in 2024, according to the maker of Guinness and Smirnoff

Consumers are embracing neo-hedonism and seeking “meaningful experiences rather than ostentatious displays of wealth,” Diageo says. “This trend invites us to reimagine pleasure, transforming it from a fleeting pursuit of extravagance to a sustained appreciation of the present moment.”

In a poll by Experian, Gen Zers and millennials said they’d rather spend money on experiences such as concerts and traveling rather than saving for retirement, and tours such as Taylor Swift’s Eras tour are driving spending and shaping the experience economy. Other examples Diageo gave in its report include pop-up bars and immersive art exhibitions.

The neo-hedonism trend “really thrived” post-pandemic, when people were able to splurge on experiences again after waves of lockdown, Mark Sandys, Diageo’s chief innovation officer, told Business Insider. Cocktail consumption is up again as people make the most of social occasions, leading to the roll out of more cocktails on draught, he said.

Consumers are becoming increasingly aware of the impact their purchases have on the environment, and want to support businesses that “embrace sustainability and responsibility as core values, offering guilt-free consumption,” Diageo says.

This includes looking at the entire product lifecycle, from how products are sourced, produced, and delivered to how they can be recycled, reused, repaired, or repurposed.

But Sandys said that sustainability “can’t come at the expense of the other reasons why you’d buy a brand: quality design, brand preference.”

Sandys said that consumers are also focusing on the social responsibilities of companies more than ever. This includes looking for local brands that can bring jobs and support suppliers and charities in their local areas, and brands that show a commitment to tackling key social inequality, in particular supporting LGBTQ+ rights and fighting racism.

“From economic pressures to environmental challenges, our fast-paced and interconnected world is causing consumers to face an unprecedented array of stressors,” Diageo says in its report. “Moments of calm and relaxation have become rare treasures.”

Diageo says that the pandemic led to a shift in how people view health and wellbeing, with people now placing greater importance on their psychological, emotional, sexual, social, and financial wellbeing. In a survey of more than 24,000 people across 31 countries, Ipsos found that 78% of respondents said their mental health is equally as important as their physical health. As a result, more people are incorporating spa-like treatments, yoga, and meditation into their daily life at home, trying out digital detoxes, and connecting with their neighbors, Diageo wrote.

This is feeding into how consumers pick products too, Diageo said, choosing them for mood-enhancing and mental wellbeing properties as well as nutritional benefits. For example, people are opting for non-alcoholic drinks like herbal mocktails. They’re also buying more nutraceuticals and functional foods, known for their wider health benefits beyond just their nutritional values, such as chia seeds, blueberries, and salmon.

The impact of technology is only growing each year, as Diageo analyzes in its report.

Virtual and augmented reality are altering how people communicate with others, creating a “phygital” space “where online connections are as authentic and meaningful as in-person interactions,” Diageo says. AI is increasingly seeping into people’s lives, too.

“Our daily interactions span the digital and physical worlds seamlessly,” Diageo wrote.

This is all shaping how people engage with brands. People are splashing out on digital goods and experiences, like concerts and merchandise. They’re using VR and AR to try on clothes before they buy them or to picture what new items of furniture would look like in their homes and are getting A-generated personalized shopping recommendations. AI chatbots mean that brands can engage with customers and offer support more quickly.

“Consumers will be on the lookout for personalised, immersive product showcases that mimic in-store shopping,” Diageo says. “E-commerce will need to undergo a virtual transformation to match consumer wishes for enhanced online shopping satisfaction.”

People are increasingly yearning for collective belonging “in response to provocative headlines and polemic debates,” Diageo wrote in the report.

Consumers are increasingly seeking spaces to connect with like-minded individuals, leading to the proliferation of niche communities both online and offline where they can connect over shared interests regardless of backgrounds and geographies.

For brands, this provides opportunities for them to engage with their fandoms, such as through limited-time offerings and appointing celebrity ambassadors, Diageo says.