“People aren’t feeling great about this election; and it’s another hurdle for the industry to overcome to find consistent growth,” said Susan Viamari, vice president of thought leadership for IRI.
To succeed, marketers must underscore their value message, convince consumers that they are worthy of a splurge now and again, and create targeted advertising and promotion campaigns in order to capture some attention in this omnichannel world.
“The medium is different based on whom you are speaking to and what message you are trying to convey,” she said.
The quarterly IRI Consumer Connect survey of 2,200 consumers, which took place in June, is designed to gauge consumers’ financial confidence and understand how their financial situations are impacting the way they shop for, purchase and consume consumer packaged goods. The new bout of negativity comes just as shoppers were starting to feel good again; after all, The Great Recession ended in 2009.
“We’ve seen a trend toward consumers feeling the recession is behind them; they have reset the baseline and this is the new normal,” explained Viamari. “We are in a different time than before The Great Recession. Back then, people were spending more freely, but those days are past. Consumers may not be tightening their belts as much, but they will continue to make lists, look at different retailers, be more open to private label and switch brands to save money.”
This new way of consumer thinking comes just as the US prepares for a new leader to take up residence in The White House. According to survey results, 64% of consumers believe their households’ financial health will decline if Donald Trump is elected compared to 60% of consumers if Hillary Clinton is elected. On the flipside, 36% said that their households’ financial health will improve if Trump is elected compared to 40% if Clinton is elected.
If times get tough, the tough will still go shopping, but there will be modifications to their purchasing habits, according to IRI’s survey results:
• 62% of consumers who think their finances will decline say they will make written shopping lists, compared to 59% who think their finances will improve;
• 75% of consumers who think their finances will decline say they will buy needed items when they are on sale to save money, compared to 54% who think their finances will improve;
• 62% of consumers who think their finances will decline say they will purchase private label products to save money, compared to 41% who think their finances will improve;
• 48% of consumers who think their finances will decline say they will try new, lower-priced brands to save money, compared to 36% who think their finances will improve; and
• 38% of consumers who think their finances will decline will visit multiple retailers to keep the grocery bills down, compared to 35% who think their finances will improve.
That means more people than every before will conduct research before they head out to the store or buy online.
“The internet plays a significant role in educating shoppers,” noted Viamari. “Consumers are more informed than they used to be, they like being in control: they like looking online or asking peers about product quality.”
Treat Me Right
Today’s shoppers like control and getting pampered too. According to IRI’s survey, more optimistic shoppers are looking for retailers that offer a wide selection of life’s little (and usually, edible) luxuries:
• 56% want gourmet food and beverages;
• 55% desire local/artisan food and beverages;
• 51% require prepared/easy-prep meal solutions;
• 51% seek fancy natural/organic food and beverages;
• 48% wish for technology that would make shopping the store more exciting; and
• 39% would like the ability to purchase online and pick up in store.
Convenience is critical to shoppers, especially young consumers. According to IRI, consumers are not as conservative as they were during the depths of the Great Recession, but that doesn’t mean that they aren’t making educated purchases.
“Smart shoppers save money without sacrificing,” noted Viamari. “In the beauty category, that means fewer trips to the salon, purchasing more beauty solutions without going to the spa.”
But Millennials still value experiences to express their individuality. In beauty, those desires can translate into fun colors for hair and nails, eyelash extenders and other cosmetic accessories to enable them to stand out from the crowd. In their search for experience, younger consumers face the biggest financial hardships. Yet, IRI found that Millennials are more optimistic about the future than older consumers.
“That’s one of the takeaways for beauty companies,” said Viamari. “Provide value to consumers who are willing to splurge on themselves. The will spend money on high-end products.”
With the US presidential election looming, beauty companies may want to roll out prestige travel kits for all the folks who say they’ll leave the country if Donald or Hillary wins in November!