Majority of consumers see bright future ahead, so they're willing to spend more now
CHICAGO — The majority of consumers see a brighter future for 2017, according the latest IRI Consumer Connect survey released Wednesday. The Q4 2016 findings reveal that 70% 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,” stated Susan Viamari, VP 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.”
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. One third of 18- to 34-year-olds and 38% of 35- to 54-year-olds think their personal finances will improve, while only 18% of 55- to 64-year-olds and 11% 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% are consumers who earn $35,000 or less;
24% are consumers who earn $35,000 to $54,000;
25% are consumers who earn $55,000 to $99,000; and
21% are consumers who earn $100,000 or more.
This financial optimism cuts across ethnic backgrounds, too: 24% are African American, 3% are Asian, 14% are Hispanic and 62% are white consumers feeling their household finances will improve in 2017.
From skin care products to their favorite beverages, consumers are willing to open their wallets and spend more for certain bells and whistles. Consumers also are willing to pay more for the product selection and the convenience of shopping online.
Overall, 33% of optimistic consumers and 20% of the overall population say they will pay more to order products online and have them delivered to their home. And 18% of optimistic consumers and 10% of the total population will splurge to order online and pick up in the store.
Despite widespread optimism, deal-seeking remains pervasive, as consumers look to spend their 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% of these pessimistic consumers will buy private label to save money compared to 81% of the overall population;
77% of pessimistic consumers will try lower-priced brands to save money compared to 72% of the overall population;
75% of pessimistic consumers will compare prices in retailers’ weekly circular to find the lowest prices compared to 68% of the general population;
64% of pessimistic consumers will visit multiple retailers to keep their grocery bill low compared to 57% of the overall population; and
61% of pessimistic consumers will compare prices on retailers’ websites to find the lowest prices compared to 50% of the overall population.
”Overall, 2017 is looking like it will provide several growth opportunities for CPG,” Viamari concluded. “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.”