Negativity about U.S. economy has prompted more consumers to focus on price, couponing, private-label products, and these behaviors are becoming habitual: SymphonyIRI survey
October 21, 2011
Understandably, the barrage of negative statistics about employment, approval ratings, housing markets and the economy has taken its toll on consumer sentiment. It is easy to make generalizations about consumer sentiment, but it is more difficult and especially critical to understand sentiment on a very granular level, and how that sentiment is affecting consumer attitudes and behaviors. After all, rich or poor, people are making more conscious purchase decisions than they ever have before. The latest SymphonyIRI Group Point of View, “Gray Skies: Consumers with negative views of government’s handling of the economy have hunkered down and reined in spending—for the long haul,” reveals how “Negative Nellies”—the 82 percent of consumers who believe the government’s actions are having a significant negative impact on the economy—are changing their behaviors and lifestyles more dramatically and indelibly versus the rest of the population.
“For CPG manufacturers and marketers looking to succeed in the evermore competitive retail market, a detailed understanding of this huge ‘Negative Nellie’ segment of the population is essential,” says Susan Viamari, author of the Point of View and editor of Times & Trends, SymphonyIRI. “The negatives have reined in spending a bit more than the average consumer and index slightly higher on a number of conservative attitudes and behaviors, such as believing price is more important than convenience, using coupons more frequently and buying more private label products. CPG manufacturers and marketers need to stay on pace with evolving consumer attitudes and realize that, particularly across the negatives, many behaviors forced in the past few years have become habitual.”
Who Exactly are the Negatives?
Playing into the stereotypically more sunny and optimistic disposition of many women compared to men, males accounted for a larger percentage of those with negative views. Also, given the variable nature of political views in different parts of the country, the South is home to significant portion of the negative group. This can likely be attributed to overall dissatisfaction with the Democratic government in a region ripe with “red states,” which did not support the election of President Obama in the first place. Financial status, too, makes an impact. Fifty percent of those with negative views are “doing-well”* consumers, most of whom likely have experienced significant financial pitfalls due to high investments in today’s turbulent markets.
The negatives as a group have adopted new shopping behaviors and are making concerted efforts to budget and spend wisely. Thanks to the Internet and new technology, efforts to save money often are quick and easy, even literally at consumers’ fingertips on an iPhone or other smartphones and gadgets.
Negatives index as much as 9 percent higher than the general population on some shopping behaviors, such as using online resources to find coupons, leveraging iPhone apps to find coupons and buying less variety to reduce the number of items in a household.
*Doing-well consumers: One member households earning $35,000+ or two or more member households earning $60,000+
Living a Scaled Down Life
The fear of an uncertain economic future has affected consumer budgeting, but it has also markedly affected consumers’ lifestyle choices in their day-to-day activities. Consumer dining- out patterns have shown for years now that consumers are eating out less often and saving dining-out opportunities for special occasions. It’s no surprise, then, that consumers are cooking and eating at home more often. The negatives, though, are doing so with just a bit more frugality. For instance, negatives are slightly more likely to create and serve simple, less expensive meals at home, snack less frequently, and eat smaller portions.
Similarly, the negatives are taking a slightly more proactive approach to saving on health and beauty expenses. They are 8 percent more likely to use the Internet for health information, including diagnosing/treating simple ailments, for instance, and are 3 percent more likely to use at-home beauty treatments. In addition, negatives are more likely than the general population to self-treat for simple ailments, make cleaning products last longer and make beauty products last longer.
“Though sometimes news reports, market research and the overall outlook may appear eternally gray and cloudy, consumers continue to evolve in ways that are surprising and amazing product developers and retailers alike,” says Viamari. “CPG manufacturers and marketers need to embrace these oft-changing consumers and evolve in order to remain a part of the shopping basket going forward.”
To download the free Point of View, “Gray Skies: Consumers with negative views of government’s handling of economy have hunkered down and reined in spending—for the long haul,” please visit: http://www.symphonyiri.com/Insights/Publications/SymphonyIRIGroupPointofView/tabid/197/ctl/Details/mid/923/ItemID/1358/Default.aspx.
Findings reported in this Point of View are based on SymphonyIRI’s quarterly MarketPulse survey. More detailed findings on the Q32011 MarketPulse will be featured in a Times & Trends Special Report in November.
About SymphonyIRI Group, Inc.
SymphonyIRI Group, Inc., formerly named Information Resources, Inc. (“IRI”), is the global leader in innovative solutions and services for driving revenue and profit growth in CPG, retail and healthcare companies. SymphonyIRI offers two families of solutions: Core IRI solutions for market measurement and Symphony Advantage solutions for enabling new growth opportunities in marketing, sales, shopper marketing and category management. SymphonyIRI solutions uniquely combine content, analytics and technology to deliver maximum impact. SymphonyIRI helps companies create, plan and execute forward-looking, shopper-centric strategies across every level of the organization. For more information, visit http://www.SymphonyIRI.com.