Shoppers are awash in product recommendations. But do they trust them? “We found significant skepticism around algorithm-driven channels like social media, and in particular generative AI, where the trust level is below 40 percent,” says Danielle Bozarth, global leader of McKinsey’s Retail and Consumer Packaged Goods Practices. In this episode of The McKinsey Podcast, Bozarth joins Senior Partner Clarisse Magnin and Global Editorial Director Lucia Rahilly to talk about AI-powered shopping and other trends reshaping consumers’ path to purchase—and what brands need to do differently to keep up with them.
The McKinsey Podcast is cohosted by Lucia Rahilly and Roberta Fusaro.
This episode has been adapted from our McKinsey Live webinar series. The transcript has been edited for clarity and length.
The new rules of influence
Lucia Rahilly: Let’s start with some context. Many people are watching their wallets, but many are also engaging in new kinds of behavior—asking bots what to buy, exploring new brands on Instagram and TikTok, or comparing their sleep scores. Talk to us about your research and what it revealed about how consumers are making decisions today.
Danielle Bozarth: We publish this research every year and build it on the tremendous amount of work we do across industries. Our industry reports, along with our quarterly consumer sentiment work across almost 20 countries, give us a clear view of how consumers are feeling, where they’re spending, and how their behavior is changing in the marketplace.
Over the course of the past year, several underlying realities have intensified: more geopolitical uncertainty, more cost pressures on consumers worldwide, aging populations, and the changing technology landscape.
In this context, we’re seeing a consumer who is much more informed, more willing to move across channels, and more selective. This year, we’re really focused on four trends we’re constantly talking about with our clients.
The first is the new technology-driven path to purchase. We’re seeing continued shifts away from traditional mass-market and store-based marketing as new influences emerge along the consumer decision journey. Consumers can now discover and evaluate products in far more places than ever before. Over the past 18 months, we’ve also started to see the rise of AI as a significant influence, particularly during the evaluation stage of the purchase journey.
The second trend is the health revolution. This extends well beyond diet and exercise. Consumers are increasingly thinking about their wellness, sleep, stress, energy, and a broad set of dimensions that are taking up a much larger share of both their attention and their wallets. They’re continuing to look to our clients to deliver products that better meet these evolving needs.
The third is the experience economy. Experiences have outpaced products for years, and that gap is widening. Consumers are spending more money and time to make room for travel, entertainment, and activities linked to wellness, connection, and restoration.
Fourth is the rise of the resourceful consumer. As I mentioned, cost pressures continue to intensify in many countries around the world, and consumers are thinking very differently about how to make their dollars go further. They are examining how they shop and repurpose items, and much more.
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Lucia Rahilly: Tech is obviously top of mind for most of us. Danielle, you mentioned the consumer journey. How are AI and social media reshaping the dynamics of discovery and consideration?
Danielle Bozarth: On the AI front, we’re still in the early days of understanding how generative AI is affecting consumer behavior. We see both Gen Z and boomers using generative AI tools for brand discovery and purchase evaluation. We expect that to intensify meaningfully over time as these tools become even more ubiquitous.
Additionally, social media continues to be a critical part of the path to purchase. We spend a lot of time talking with our clients about how they now approach marketing and influencer partnerships differently to ensure that every consumer can find a voice that resonates.
We see this being especially true for Gen Z consumers compared with millennials. For millennials, stores still play an outsize role in the purchase journey relative to Gen Z. But over time, we expect an even greater influence from a multitude of channels and touchpoints throughout the purchase process.
Lucia Rahilly: That raises a question about trust. We’re all basically awash in product advice. We can turn to AI tools, social platforms, reviews, stores, or even our sisters-in-law for recommendations. Who do consumers believe?
Danielle Bozarth: One of the most interesting findings from our research is the relatively low level of trust, particularly among Gen Z consumers. One area that surprised us was what we call the “net consumer trust index,” which is the percentage of trusters minus nontrusters. We found significant skepticism about algorithm-driven channels like social media, especially generative AI, which has a trust level below 40 percent.
We also see that skepticism extending to offline channels. Even recommendations from friends and family scored surprisingly low among Gen Z. While these consumers are bringing more sources of information into their consideration set, they trust those sources significantly less. That creates a real challenge for brands and influencers as they try to shape the consumer decision journey.
Lucia Rahilly: In the past, brands could invest in fairly discrete areas. You had your website, maybe paid search, SEO, and retail. You’d have a clear sense of where your message was showing up. How is that shifting in today’s more complex landscape?
Danielle Bozarth: One key shift is how little brand-owned content is being cited by large language models [LLMs], even as those models are becoming increasingly important as consumers conduct research throughout the purchase journey.
Our research examined 25 brands over six months and analyzed 2.6 million individual citations used by LLMs. Right now, brands are struggling to shape the information consumers receive about them.
We’re still in the early stages of generative engine optimization, or GEO. Many of our clients are spending significant time thinking about how to redesign their websites and digital experiences so LLMs can better interpret their content. That includes adding FAQs, structured lists, technical specifications, and similar content. However, LLMs now draw from many different sources. That contributes to both trust challenges and the difficulty brands face in ensuring their own perspectives and claims are accurately represented.
The new wellness equation
Lucia Rahilly: Let’s move to health and wellness, which is an area where the conversation has changed dramatically. There’s so much discussion happening about sleep, stress, healthy aging, and health span. Clarisse, how are consumers defining wellness today?
Clarisse Magnin: Consumers are much more health conscious than ever before. They define health across a much broader set of attributes spanning both mental and physical well-being.
Historically, wellness was associated primarily with weight management, diet, and exercise. Today, consumers value sleep, mindfulness, stress management, gut health, and more. It’s no longer just about physical appearance—it’s about how the products they consume contribute to how they feel and function in their daily lives. I also think there is considerable growth ahead for products that can articulate wellness benefits in ways that are more precise, measurable, and outcome driven.
Lucia Rahilly: Like many people, I wear a smart ring. I check my stress metrics and sleep scores, and I get reminders to stretch. We’ve all got so much data about ourselves now, but is it helpful? Are most people achieving their wellness goals?
Clarisse Magnin: You belong to the many consumers who now have wellness devices in their lives. However, our data shows that most people do not achieve their wellness goals. Across countries and generations, roughly half of respondents—or more—report falling short.
Among boomers, many say they don’t have clearly defined wellness goals anymore. What’s especially interesting, though, is that this achievement gap exists across every generation. The use of wearable devices and health technologies continues to increase, particularly among younger generations.
Lucia Rahilly: When people are falling short of those goals, how do they respond?
Clarisse Magnin: Even when they’re not fully meeting goals, they are taking action. We see this across generations. They’re reducing artificial ingredients and sweeteners, cutting back on highly processed foods, sugar, and alcohol. Alcohol is particularly notable because half of consumers, from Gen Z to boomers, say they are actively reducing their alcohol consumption.
The picture isn’t completely uniform across generations, but there are several broad, consistent trends emerging in our survey results.
Every dollar has a job
Lucia Rahilly: Let’s move to the third theme: experiences. Danielle, what should leaders understand?
Danielle Bozarth: Even before COVID, experiences were growing slightly faster than goods. More recently, experiences have rebounded to slightly above their pre-COVID growth rates, while nonessential goods are growing at less than 1 percent.
Consumers continue to shift spending from products toward experiences. When we ask people what they’d do with an extra $200, or €200, the majority says they’d spend it on experiences. That means brands need to think about how they can deliver richer, more experiential offerings that create moments of emotional connection, peace, recovery, and fulfillment.
Lucia Rahilly: At the same time, while people are willing to spend more on experiences, they’re also feeling financial pressure. Many households are making difficult choices in the grocery aisle. Clarisse, what are consumers telling us about affordability in essential categories like food?
Clarisse Magnin: Consumers have been navigating this environment for the past several years, as the pandemic contributed to sustained inflation. They remain highly cost conscious. That’s partly driven by financial constraints, but it’s also about how much they’re willing to allocate to food and beverage spending within their household budgets. This focus on value and affordability is here to stay.
Lucia Rahilly: One thing I found interesting is that consumers aren’t simply looking for the cheapest option. They’re becoming more resourceful. What should business leaders understand about that?
Clarisse Magnin: “Resourceful” is exactly the right word because consumers are becoming increasingly creative when it comes to getting greater value for their money. They’re extending the lifespan of products, repairing items, delaying purchases, using budgeting apps, and taking a do-it-yourself approach instead of paying for services. Younger generations are leading many of these behaviors.
While financial pressure certainly plays a role, I think it’s more than that. Consumers are evaluating durability, usefulness, repairability, resale value, and other factors. For executives, that means value needs to be designed into the offering from the beginning, not simply added later through promotions. It’s a much more fundamental view of value than just price.
Turning trends into strategies
Lucia Rahilly: We’ve talked about each of these four major trends: the technology-driven path to purchase, the health revolution, the experience economy, and the rise of the resourceful consumer. Let’s turn to the practical implications. As you work with CEOs and leadership teams, what do you advise them to do differently?
Clarisse Magnin: Each trend has clear implications. First, brands need to show up where decisions are shaped. GEO is becoming the new SEO. As Danielle mentioned, if only about 1 percent of LLM citations come directly from brand websites, companies must engage more actively in reviews, communities, and other trusted sources. Managing a brand’s relationship with LLMs is becoming a critical new capability.
Second, wellness positioning must be specific. Generic claims like “healthy” or “healthier” are no longer sufficient. Brand propositions need to be credible, measurable, and outcome based. Consumers increasingly measure calories, glucose, allergies, longevity, and many other metrics. Brands need to match that level of specificity.
Third, consumers want memorable, meaningful experiences that are worth paying for. If given discretionary income, they are more likely to spend it on travel or shared moments. Brands need to think about how they can create experiences that deliver that level of value.
Finally, affordability still matters, especially in food and beverage. But value extends beyond price. Younger consumers enjoy finding creative ways to shop and use technology to maximize value. Companies shouldn’t focus exclusively on promotions; they should build value into the product itself from the very beginning.
Lucia Rahilly: Will AI continue to impact consumer behavior? Any examples of how companies are responding?
Danielle Bozarth: We expect AI to have a meaningful impact on the consumer decision journey for years to come. Right now, we’re seeing the strongest adoption in high-consideration purchases like travel. We also see growing use in beauty, where consumers synthesize reviews, and in fashion, where AI helps people build wardrobes and receive personalized recommendations.
Over time, I think social media will continue to play a major role in discovery, while consumers increasingly rely on generative AI for deeper research and evaluation. That’s why we’re spending so much time helping our clients prepare not just through GEO but also by rethinking product innovation and how products are presented so they resonate with LLMs.
Lucia Rahilly: Clarisse, where are companies struggling most to adapt?
Clarisse Magnin: AI is disrupting companies and how they operate. It’s not just a technology issue—it’s a business, capability, and investment priority.
Take marketing, for example. AI is reshaping campaign development, content production, campaign management, and many other processes. As Danielle mentioned, consumer adoption is accelerating, and companies need to keep pace. AI isn’t yet fully mature, so organizations need to invest while the technology continues to evolve. We’re already seeing significant improvements in marketing processes, as well as opportunities to unlock major operational efficiencies.
The biggest challenge companies face is the pace of adoption. They need to evolve their practices quickly enough to capture value while responding to rapidly changing consumer expectations.
