McKinsey Says Your Customers Changed Years Ago

An Analysis of the Data

McKinsey just dropped their State of the Consumer 2025 report, and if you're in marketing, you need to pay attention. Not because it's telling us anything shocking—but because it's confirming what many of us have been watching unfold in real-time with actual data that C-suite executives might actually believe.

The headline? The pandemic didn't just temporarily disrupt consumer behavior. It permanently rewired it. And if you're still waiting for things to "go back to normal," you're already losing market share to competitors who figured this out two years ago.

The Data That Should Make You Uncomfortable

McKinsey surveyed over 25,000 consumers across 18 markets representing about 75% of global GDP. That's not a focus group. That's a dataset you can actually use to make decisions.

Here's what they found, and here's what it actually means for your business:

1. Your Customers Are Alone, Online, and Increasingly Unreachable Through Traditional Channels

The research shows American consumers now have three additional hours of free time per week compared to 2019. Sounds great, right? Here's the problem: they're spending 90% of that time alone. On hobbies. Shopping online. Scrolling social media. Working out by themselves.

Time spent with friends, family, and at in-person cultural events hasn't increased—it's actually decreased as a percentage of total free time.

What does this mean for you? Your local event sponsorship strategy isn't reaching people the way it used to. Your "build community" marketing platitudes aren't connecting because people are actively choosing to spend their free time differently.

Over 90% of Chinese and US consumers shopped at an online-only retailer in the previous month. More than 80% in Germany and the UK did the same. Nearly 40% of consumers in these markets used grocery delivery in the previous week.

The convenience economy isn't coming—it's been here for five years. And McKinsey's data shows food delivery's share of global food service spending jumped from 9% in 2019 to 21% in 2024. That's not a temporary shift. That's a fundamental reallocation of consumer spending.

If your business model depends on foot traffic, in-person browsing, or "the experience of shopping," you're fighting consumer preferences, not leading them.

2. Social Media Influences Everything While Consumers Trust It For Nothing

Here's the paradox that should be keeping digital marketers up at night: consumers rank social media as their least trusted source for buying decisions, yet it's where they spend hours interacting with family and friends—their most trusted sources.

Across markets, 32% of consumers now use social media for product research (up from 27% in 2023). In India, that number hits 50%. Nearly one-third of consumers in Germany, the UK, and US have purchased brands they discovered through social media.

But when asked directly about trust? Social media ranks dead last.

This isn't a contradiction. It's how influence actually works in 2025. Direct advertising gets ignored. But a friend's casual mention in a comment thread? That gets through.

The challenge here is brutal: you need to be present and authentic on platforms where consumers don't trust the platform itself but do trust the people they know. You're not building trust with your brand messages—you're hoping consumers who already trust someone else encounter your brand in the right context.

Your $50,000 influencer campaign might generate engagement metrics that look impressive in a slide deck. But if it doesn't translate to word-of-mouth among real friend groups, it's just expensive content that people scroll past.

3. Gen Z Will Outspend Boomers By 2029—And They're Nothing Like You Think

McKinsey projects that Gen Z spending will eclipse baby boomer spending globally by 2029. By 2035, they'll add $8.9 trillion to the global economy.

But here's what makes this generation different: the average 25-year-old Gen Z consumer in the US has a household income of $40,000—50% higher than boomers had at the same age (adjusted for inflation, taxes, and transfers). Their spending is growing twice as fast as previous generations.

Yet they're also scared. About 40% of Gen Z respondents in Germany, the UK, and US say they're worried about their financial futures. Half of US Gen Zers don't have enough savings to support their lifestyle for more than one month.

So what are they doing? Spending anyway. And going into debt to do it.

More than one-quarter of Gen Z respondents use buy-now-pay-later services. In China, that number hits 40%. They're the generation most willing to splurge and take on credit—13 percentage points higher than other generations when it comes to buying on credit.

Gen Z wants financial security desperately. But they're also willing to splurge on what they deem valuable right now—particularly apparel (34%) and beauty (29%). They pay premiums for convenience at rates higher than any other generation.

Gen Z isn't irrational. They're responding rationally to a world where traditional markers of adulthood (homeownership, starting a family) feel increasingly out of reach. So they're spending on what feels achievable now—looking good, feeling good, experiencing convenience.

If your brand positioning still talks about "quality that lasts a lifetime" or "investment pieces," you're speaking a language Gen Z doesn't care about. They want what makes them feel successful today, even if it means paying for it over six installments.

4. "Buy Local" Isn't Just Marketing Speak Anymore

Here's a stat that should reshape portfolio strategy: 47% of consumers globally say locally owned companies are important to their purchase decision.

In Canada and the US, this preference has jumped significantly just since Q1 2025. When asked why, 36% say they want to support domestic businesses. Only 13% say it's about price.

Meanwhile, 42% of European consumers report having a worse perception of American brands in May 2025 than at the beginning of the year.

This isn't consumer patriotism. It's consumers signaling that global brands need to prove their relevance in local markets in ways they haven't had to before. In China, six of the top ten beauty brands with the most market share growth since 2020 are Chinese (up from just two between 2015-2020).

If you're a multinational brand, your global playbook isn't enough. You need localized offerings, localized sourcing where possible, and genuine regional relevance. If you're a local brand, you have a tailwind—but only if you actually deliver on what makes local brands valuable (relevance, values alignment, community connection).

5. Consumers Are Trading Down in Ways You're Not Tracking

Rising prices remain the number-one concern for consumers across all 18 markets McKinsey surveyed—far outranking climate change, international conflict, or unemployment.

So consumers are trading down. But not in the simple "buy cheaper versions of the same things" way we used to track.

Instead, 79% of consumers globally are trading down through behaviors like deal-seeking on every purchase and delaying purchases. More telling: over one-third of consumers have traded down in one category specifically to splurge in another. Even more striking—19% plan to cut back in non-discretionary categories to splurge in discretionary ones.

Even among consumers concerned about rising prices, over one-third still plan to splurge.

What's happening? Consumers are solving value equations across their entire spending portfolio, not within individual categories. They're cutting back on groceries to afford concert tickets. They're buying cheaper household items so they can splurge on skincare.

Traditional category-based market research can't see this. Your brand loyalty metrics can't track it. But it's happening, and it explains why consumer behavior feels so unpredictable right now.

Consumers aren't loyal to your category. They're loyal to the overall value equation they're managing across dozens of purchase decisions. Your premium product isn't competing with your competitor's premium product—it's competing with their vacation budget, their daughter's soccer fees, and the deal they found on Amazon for something completely unrelated.

What Actually Matters: Four Things You Can Do

McKinsey offers four strategic imperatives. Let me translate them into language that doesn't require a consulting deck:

1. Stop Guessing, Start Measuring

McKinsey talks about building a "360-degree view of consumers." In practice, this means: deploy AI-powered social listening tools, gather granular behavioral data from your owned channels, and if you're a CPG company with limited first-party data, invest in capabilities to gather consumer insights beyond your immediate subsector.

The days of annual consumer surveys and quarterly focus groups are over. If you're not gathering real-time signals and using predictive analytics, you're flying blind.

2. Get Revenue Growth Management Right

The research confirms consumers are more price-aware and deal-oriented than ever. They're comparison shopping across platforms. They're waiting for sales. They're solving value equations you can't see.

This means your pricing, promotions, assortment optimization, and trade terms need to be driven by analytics, not gut feel or historical precedent. McKinsey suggests using predictive AI and behavioral data to deploy promotional spending in personalized ways.

Translation: spray-and-pray promotions are burning money. Targeted offers to the right consumer at the right moment are the only promotions that matter.

3. Your Portfolio Should Change Every Decade

Consumer companies should generate 20-30% new revenue from their portfolio every ten years through M&A and divestitures. Those that do this generate 2.5 percentage points more total shareholder return than those relying on organic growth alone.

In a market defined by disruptive brands, high-velocity trends, and unpredictable consumers, standing still is moving backward.

4. Rewire Your Tech Stack or Fall Behind

McKinsey identifies 140 agentic AI and generative AI use cases for consumer companies, with the highest value in shaping consumer insights, managing demand, and handling customer channels.

Companies that make transformative tech investments could see up to 15-percentage-point improvements in EBITDA margins.

But here's what that really means: AI isn't a nice-to-have anymore. It's the difference between companies that can respond to these behavioral shifts in real-time and companies that are still analyzing last quarter's data.

Stop Saying China Is "Catching Up"

The Data Shows Something More Complicated

Here's the conversation we should be having about this McKinsey data: on key digital behavior metrics, the US and China have converged. Over 90% of consumers in both countries shopped at an online-only retailer in the previous month.

But let's kill the "catching up" narrative right now. Because the data shows that on several critical consumer behavior metrics, Chinese consumers didn't catch up to Americans—they evolved differently, and in some measurable ways, they came out of the same global pandemic in better shape than we did.

Chinese consumers maintained social connection. Americans chose isolation.

The research explicitly states that Chinese consumers spend more of their free time with friends and family compared to Americans. They're also spending more time on self-improvement and shopping for pleasure.

Meanwhile, US consumers allocated 90% of their three additional hours of weekly free time to solo activities—hobbies, fitness, social media scrolling, all done alone.

Both markets went through the same pandemic. Both had lockdowns. Both adopted the same digital tools. But one market emerged more socially connected, and one emerged fundamentally more isolated. That's not about technology adoption—that's about what each culture chose to do with the same technological capabilities.

If we're measuring consumer health by social connection and community engagement, Americans didn't maintain our lead. We fell behind.

Chinese Gen Z uses more debt but reports way less anxiety

Here's where the data gets really interesting:

• Only 11% of Chinese Gen Z worry about their financial futures vs. 40% of US Gen Z

• Only 8% of Chinese Gen Z lack enough savings for one month vs. 50% of US Gen Z

• Yet Chinese Gen Z uses buy-now-pay-later at 40%—the highest rate of any market measured

Think about what that means: Chinese Gen Z is leveraging debt instruments at higher rates than Americans but reporting dramatically lower financial anxiety. Meanwhile, US Gen Z has household incomes 50% higher than boomers had at the same age (adjusted for inflation), yet half of them are one paycheck away from financial crisis and 40% are terrified about their futures.

Who's "ahead" in this comparison? The generation with higher absolute income but crippling anxiety? Or the generation using financial tools confidently while maintaining optimism about their trajectory?

The data strongly suggests that absolute income level matters less than perceived economic opportunity and achievable milestones. Chinese Gen Z believes they're on an upward path. American Gen Z—despite objectively better starting positions—believes traditional markers of success are increasingly out of reach.

Chinese domestic brands aren't "catching up"—they're winning

In China, six of the top ten beauty brands with the most market share growth since 2020 are Chinese brands. That's up from just two Chinese brands in that position between 2015-2020.

This isn't about Chinese brands slowly improving until they match Western quality standards. This is about Chinese brands innovating, understanding their local consumers better, and outcompeting foreign brands in their home market. They're not moving toward a "Western standard"—they're defining their own standard and winning with it.

Meanwhile in the US and Canada, preference for locally owned companies has jumped significantly just since Q1 2025, and 42% of European consumers report worse perceptions of American brands in May 2025 than at the start of the year.

The American "buy local" shift looks reactive—a response to uncertainty and changing perceptions of American brands abroad. The Chinese shift looks like the natural outcome of domestic brands genuinely becoming best-in-class.

The narrative we need to retire:

The idea that China, India, and other major markets are "catching up" to some Western ideal of consumer behavior is lazy thinking based on outdated assumptions.

What the McKinsey data actually shows:

• Digital adoption: Converged. No one's ahead.

• Social connection: Chinese consumers maintained it better through the same crisis.

• Financial confidence: Chinese Gen Z has it despite using more debt; American Gen Z lacks it despite higher incomes.

• Domestic brand strength: Chinese brands are winning at home through innovation, not imitation.

What this means for US marketers

You cannot approach international markets assuming they're 5-10 years behind American consumer behavior and will eventually "catch up" to where we are now. They're not behind—they're different. And on some metrics that actually matter for marketing effectiveness (social connection, brand trust, financial confidence, word-of-mouth potential), they may be ahead.

If you're marketing to American consumers, you're dealing with:

• Increasing isolation despite digital connectivity

• Financial anxiety disproportionate to actual income levels

• Fragmented trust in institutions, media, and even social platforms

• Cross-category value equations that make spending unpredictable

• A preference shift toward local brands driven more by uncertainty than genuine domestic advantage

If you're marketing to Chinese consumers (or Indian consumers, with their 50% social media product research rate), you're dealing with:

• High digital adoption combined with maintained social networks

• Confidence in using financial tools without catastrophizing

• Strong and growing preference for domestic brands that have earned their position

• Different cultural responses to the same global disruptions

These aren't markets at different stages of the same journey. They're markets on fundamentally different paths. Your strategy needs to account for that reality, not some outdated mental model where everyone eventually becomes more like American consumers.

The bigger question this data raises: Why did American consumers emerge from a global crisis more isolated, more anxious, and less trusting than consumers in other major markets? And what does that mean for the long-term viability of marketing strategies built on community, trust, and confident consumer spending?

Those questions matter more than your Q4 media plan. Because if you don't understand why American consumer behavior is diverging rather than leading, you're optimizing for a market reality that no longer exists.

The Bottom Line

McKinsey's research confirms something many of us have been watching: the old frameworks for understanding consumer behavior broke five years ago and they're not coming back.

Consumer sentiment doesn't predict spending anymore. Category loyalty is dead. Trust and influence work in ways that don't show up in traditional marketing attribution. Gen Z is spending money they don't have on things they value today. And consumers are solving value equations across their entire lives, not within the neat categories we use to organize our product lines.

The question isn't whether these changes are real—the data confirms they are. The question is whether your organization is structured, measured, and incentivized to respond to this reality.

Because while you're waiting for things to return to normal, your competitors are already optimizing for the permanent disruption that McKinsey's research just confirmed.

The McKinsey State of the Consumer 2025 report surveyed over 25,000 consumers across 18 markets representing approximately 75% of global GDP. You can find the full report at McKinsey & Company's website.