Recent unemployment numbers brought the jobless rate to its lowest point since January 2009 and consumer confidence is on the rise, but what do these economic improvements mean for the CPG industry? Will they be enough to buoy shopper enthusiasm?
Last week, we released the second-annual SymphonyIRI EconoLink™ report, revealing cautious optimism among shoppers: 27 percent of shoppers anticipate they will be financially better off a year from now (up from 22 percent with this view last year), while 21 percent believe their financial positions will be worse a year from now (down from the alarming 30 percent with that opinion last year).
SymphonyIRI’s EconoLink report, “Economic Shopper Segmentation: A Look into How Shoppers Are Changing Their Behaviors in Today’s Economic Environment,” examines the attitudes and shopping patterns of six consumer segments, grouped according to financial outlook and behaviors. The new data provides CPG marketers clear insight into how categories, brands and stores are performing with specific shopper groups—information they can use to better address consumer wants and needs. The EconoLink segments are:
- Downtrodden: Median annual income of $41,000; very pessimistic about their financial situations; tend to shop at mass merchandisers, dollar and convenience stores
- Cautious and Worried: Median income of $42,000; bleak financial outlook; often shop at mass merchandisers
- Start-Ups: Median income of $44,000; impacted by the recession but maintain positive outlook; shop at grocery, drug and convenience stores
- Optimistics: Median income of $48,000; positive outlook; favor supercenters, drug and convenience stores
- Carefree: Median income of $59,000 and financially stable; skew toward shopping at club stores and tend to be brand loyal
- Savvy Shoppers: Median income of $81,000 and financially stable; enjoy shopping and the quest for value; favor grocery, drug and mass merchandisers
All six EconoLink segments demonstrated a generally positive outlook for the future, but optimism is highest among Start-ups and Carefrees. Start-Ups are twice as positive as last year; 18 percent believe their financial situation will be better next year, versus the mere 9 percent who felt that way last year. Optimism also climbed for the Carefree group (18 percent this year versus 11 percent last year). However, not all segments are improving: only 17 percent of Savvy Shoppers feel their financial situations are stronger now than a year ago, versus 23 percent last year.
In another demonstration of increased optimism, 64 percent of Downtroddens believe their financial situations will be worse a year from now than today, down from an astounding 79 percent in the 2011 report. Cautious and Worried shoppers are moving in the same direction; 38 percent today believe their financial situations will be worse in a year than today, while 46 percent held this belief last year.
Financial attitudes have seen modest improvement over the past year, but shoppers remain extremely cautious. Now more than ever, manufacturers and retailers must appeal to shoppers’ beliefs, behaviors and values. With EconoLink data, marketers can target specific segments and devise new products, promotions, merchandising, pricing and store layouts to improve each segment’s shopping experience
To learn more, read the press release, or register here for our free webinar, “It’s Still the Economy: How People’s Shopping Decisions are Driven By Their Economic Outlook,” which I will host Thursday, October 25 at 11 a.m. CT.