The majority of consumers see a brighter future for 2017, according the latest IRI Consumer Connect survey released by Chicago-based IRI. The Q4 2016 findings reveal that 70% of consumers feel their household finances will improve in the next six months, and 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,” says Susan Viamari, vice president of thought leadership. “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, ethnicity
After surveying consumers after the U.S. presidential election in early January, Consumer Connect results point to a gap between younger and older consumers regarding improvements in their household finances for the first half of 2017. For instance, 33% 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 $35,000-54,000.
- 25% are consumers who earn $55,000-99,000.
- 21% are consumers who earn $100,000 or more.
This financial optimism cuts across ethnic backgrounds—24% are African American, 3% are Asian, 14% are Hispanic and 62% are white.
Consumers open to making thoughtful splurges
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:
- 40% are optimistic about natural and organic products.
- 57% are optimistic about food and beverages that deliver additional benefits, i.e., antioxidants.
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.
Shoppers still keeping budgets 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% 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.
- 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,” adds 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.”