The majority of consumers see a brighter future for 2017, according the latest IRI Consumer Connect. The Q4 2016 findings reveal that 70 percent of consumers feel their household finances will improve in the next six months, and they are willing to pay a premium for higher quality and highly differentiated packaged goods products as well as for the convenience of shopping online.
“Consumers are feeling optimistic about their finances but splurge-worthy priorities and money-saving strategies differ by shopper,” said Susan Viamari, vice president of Thought Leadership for IRI. “The key for CPG marketers is to know these shoppers inside and out, so they can precisely target the right products to the right shoppers. Our Consumer Connect survey provides excellent insights into these important shopper attitudes and behaviors.”
Optimism Varies Across Generations, Incomes and Ethnicity
After surveying consumers in early January 2017 after the U.S. presidential election, Consumer Connect results point to a gap between younger and older consumers regarding improvements in their household finances for the first half of 2017. Thirty-three percent of 18- to 34-year-olds and 38 percent of 35- to 54-year-olds think their personal finances will improve, while only 18 percent of 55- to 64-year-olds and 11 percent of those aged 65-plus think their finances will improve.
Meanwhile, optimism about future financial health is fairly consistent across income ranges. Among those expecting improvements:
- 24 percent are consumers who earn $35,000 or less
- 24 percent are consumers who earn $35,000 to $54,000
- 25 percent are consumers who earn $55,000 to $99,000
- 21 percent are consumers who earn $100,000 or more
This financial optimism cuts across ethnic backgrounds: 24 percent are African American, 3 percent are Asian, 14 percent are Hispanic and 62 percent are white consumers feeling their household finances will improve in 2017.
Consumers Open to Making Some Thoughtful Splurges
From skin care products to their favorite beverages, consumers are willing to open their wallets and spend more for certain bells and whistles. CPG marketers have opportunities to drive margin across the following products:
Consumers also are willing to pay more for the product selection and the convenience of shopping online. Overall, 33 percent of optimistic consumers and 20 percent of the overall population say they will pay more to order products online and have them delivered to their home. And 18 percent of optimistic consumers and 10 percent of the total population will splurge to order online and pick up in the store.
Shoppers Still Keeping the Budget in Check
Despite widespread optimism, deal-seeking remains pervasive, as consumers look to spend their hard-earned money wisely. And, among the one-third of consumers who remain concerned and expect their financial position to deteriorate in the coming six months, deal-seeking is even more common. For instance:
- 85 percent of these pessimistic consumers will buy private label to save money compared to 81 percent of the overall population
- 77 percent of pessimistic consumers will try lower-priced brands to save money compared to 72 percent of the overall population
- 75 percent of pessimistic consumers will compare prices in retailers’ weekly circular to find the lowest prices compared to 68 percent of the general population
- 64 percent of pessimistic consumers will visit multiple retailers to keep their grocery bill low compared to 57 percent of the overall population
- 61 percent of pessimistic consumers will compare prices on retailers’ websites to find the lowest prices compared to 50 percent of the overall population
”Overall, 2017 is looking like it will provide several growth opportunities for CPG,” concludes Viamari. “Consumers will spend more to get more, but it’s important that CPG marketers provide reassurances and encouragement throughout the year through the use of targeted messaging that reinforces the value proposition.”