By Stephen DeAngelis
Consumers are changing their buying habits in response to growing uncertainty in the world around them. Earlier this year, McKinsey & Company analysts wrote, “At the start of the decade, consumers adopted a slew of new behaviors — almost overnight — in response to the COVID-19 pandemic. Remote work, digital connectivity, and solo activities became the norm for life in lockdown. Today, the world has reopened, but the era of uncertainty and its impact on consumers linger.”[1] About the same time, the McKinsey analysts were making their observations, journalist Quentin Fottrell observed, “We are living in the era of cautious consumerism. … U.S. consumers … don’t know which way to turn, so they’re proceeding slowly. … Consumers are making more judicious decisions about their saving and, in particular, spending.”[2] Welcome to the age of the frugal consumer.
Rise of Dupe Culture
Fottrell reminds us, “Consumer behavior is nuanced and, obviously, our spending habits are not created equally.” Nevertheless, the movement towards consumer frugality is evident. According to the SupplyChainBrain staff, consumers began changing spending habits when new tariffs were announced earlier this year. They report, “Nearly 80% of consumers say that they've already started shopping differently in response to tariffs, while major brands have rolled out price increases for a variety of goods.”[3] And one of the most significant ways they started shopping differently was looking for better deals before buying. Back in August, journalists Katherine Hamilton and Natasha Khan reported, “Americans are back on the hunt for a good deal. … After spending lavishly through the post-pandemic years on everything from home improvement to travel, U.S. consumers find themselves in a [season] of economic uncertainty.”[4]
Changing consumer buying behavior has resulted in a new movement called Dupe Culture. Dupe culture is a consumer trend in which people actively seek out lower-cost alternatives called “dupes” that closely resemble expensive or luxury products in style, functionality, or design, but without infringing on trademark elements like logos or brand names. This phenomenon has gained significant traction on social media platforms, especially among Gen Z and Millennials, and is most often observed in fashion, beauty, and tech. Analysts from Cashew Research insist, “Dupe culture has crossed over from social media trend to mainstream consumer behavior, and premium brands are feeling the pressure.”[5]
In the consumer packaged goods (CPG) sector, dupe culture is reflected in the fact that many consumers are now buying private label products rather than name brand goods. This new era of frugality is unfolding in other ways as well. Hamilton and Khan explain, “Even though people still need to do laundry, wash their hair and put diapers on their babies, Americans are using up the goods in their pantry and seeking value by buying in bulk to economize or purchasing smaller packs to spend less.” Khan recently wrote about the extreme lengths some consumers are going to save money. She writes, “Americans are increasingly experimenting with frugality. In addition to stretching household staples, some are shopping at less expensive grocers and buying pantry products on Facebook Marketplace. One consumer sought to save on beef by buying half a cow.”[6]
The Way Ahead for CPG Manufacturers
Khan reports, “Consumer companies are counting on consumers’ thriftiness to go away eventually.” However, a Deloitte survey found that a majority of polled consumers (57%) said they think the economy will weaken over the next 12 months.[7] That means consumer behavior is not likely to change very much in the near future. McKinsey analysts assert, “A new baseline has emerged for consumer decision-making.” Nevertheless, they note that CPG manufacturers have reasons to be optimistic. They explain, “Despite a high level of uncertainty — not only in consumer sentiment, but also in geopolitical and economic outlook — there are many areas in which brands can find growth.” They go on to identify “four strategic imperatives for consumer players in the year ahead.” Those imperatives are:
• Get even closer to the consumer. “Consumer sentiment is no longer neatly aligned with consumer spending, and simple methods for predicting consumer behavior are insufficient. Companies need to build a 360-degree view of their consumers that enables proactive decision-making. … Still, gathering insights is only half the battle. Consumer companies can deploy tools to generate both predictive and prescriptive analytics (these include data points, such as churn risk and product preferences, and personalized recommendations, respectively). Together, these analytics form a strong insight and analytics backbone that allows consumer players to unlock the power of personalization and targeted marketing.” One such tool is the Enterra Consumer Insights Intelligence System™. This System allows clients to quantitatively uncover and logically understand the inter-relationships that lead to heightened consumer understanding, hyper-personalized product recommendations, and new product innovation.
• Invest in revenue growth tools. “Consumers have become more price aware and deal oriented, and they evaluate trade-offs in broader ways than they did in the past. Offering the right product at the right price at the right time has become more important and harder to do than ever, especially as digital platforms enable consumers to comparison shop. For brands, it’s table stakes to get [revenue growth management] right. This includes using analytics to drive informed pricing decisions, strategically managing trade terms, and conducting regular assortment optimization.” A good example is the Enterra Revenue Growth Intelligence System™ (ERGIS™), which systemically performs holistic revenue growth optimization (including optimizing strategic and tactical pricing, trade promotion, trade architecture, price pack architecture, media mix, customer segmentation, and assortment).
• Tailor the portfolio for growth. “As disruptive brands, high-velocity trends, and unpredictable consumers continue to define the sector, consumer companies must obsess over their sources of growth. This means leaning into M&A and divestitures (M&A&D) continually. Consumer players should strive to generate 20 to 30 percent new revenue from their portfolio every ten years. Those that leverage M&A&D for growth generate 2.5 percentage points more TSR than those with organic growth alone do. This also means reinventing business capabilities. E-commerce is poised to be among the biggest arenas for competition. Much of this growth will come from higher penetration in developing economies and the acceleration of new business models, such as social commerce.”
• Rewire tech capabilities. “Even if consumer players manage to achieve each of these strategic imperatives, they will struggle to maintain a competitive advantage without rewiring their tech capabilities, including restructuring their organizations to accommodate technology investments. Among the 140 agentic AI and gen AI use cases that consumer players should prioritize, shaping consumer insights and demand and managing customers and channels represent the greatest value.”
McKinsey analysts conclude, “Outcompeting in the coming years means anticipating the needs of an often-unpredictable consumer. Brands that can swiftly adapt to the new realities will be well positioned to grow, regardless of the uncertainty ahead.” I couldn’t agree more.
Footnotes
[1] Becca Coggins, Christina Adams, Kari Alldredge, Alyssa Hopcus, Laura Bucklin, and Justin Shamoun, “State of the Consumer 2025: When disruption becomes permanent,” McKinsey & Company, 9 June 2025.
[2] Quentin Fottrell, “What on Earth is going on with the American consumer?” MarketWatch, 4 June 2025.
[3] Staff, “U.S. Consumers Cut Spending as Brands Hike Prices,” SupplyChainBrain, 6 June 2025.
[4] Katherine Hamilton and Natasha Khan, “American Consumers Are Getting Thrifty Again,” The Wall Street Journal, 3 August 2025.
[5] Cashew Research, “Dupe Culture Isn't Just Having a Moment. It's Becoming a Movement.” Cision PR Newswire, 23 October 2025.
[6] Natasha Khan, “The Lengths Americans Are Willing to Go to Make Every Penny Count,” The Wall Street Journal, 27 October 2025.
[7] Alex Daniel, “Consumers are getting gloomier — just before the holidays,” Quartz, 15 October 2025.
