Published on: January 29, 2012
By Susan Viamari, Editor, Times & Trends, SymphonyIRI Group, Inc.
The beginning of a new year is traditionally marked with new expectations and questions about what the future will bring. Possibly the most common question for 2012 in retail is: “Will this be the year when consumers finally return to their normal, pre-recession spending habits?”
In Q1 2011, SymphonyIRI launched its MarketPulse™ quarterly survey series, designed to assess shopper attitudes regarding the economy, their personal financial situations, and the strategies they are using to select products and banners. The Q4 MarketPulse research, released in mid-January, contains a year’s worth of data and reveals that despite very jolly holiday sales figures, “normal” pre-recession spending habits will not make a comeback anytime soon. The survey also found that although consumers are more optimistic about the economy and their personal financial situations, they continue to shop conservatively, seeking deals like never before. Overall, consumer expectations for the coming year improved slightly in Q4 2011, but remain less optimistic versus Q1.
However, these less optimistic attitudes and economy-driven behavior changes have opened the door to opportunity across a broad range of CPG departments and categories. As more people cut back on “splurges,” such as eating out and visiting hair salons, CPG retailers and manufacturers have the opportunity to capture these dollars. For example, throughout most of 2011 (55 percent in Q2, Q3 and Q4), more than half of consumers reported they eat out less often.
Behavior shifts don’t end there and nor do the opportunities. At the beginning of the recession, shoppers took on more deliberate shopping strategies to stretch their dollars. Today’s consumers have kept these habits and are carefully planning their trips, embracing a wide range of activities to save money. Some of these include:
Bargain-hunting: Manufacturers and retailers have trained shoppers to seek out deals, and they continue to do so with a vengeance, as 26 percent of shoppers are buying more on deal now than they were a year ago. Further, one-third of consumers purchased at least 50 percent of their CPG baskets on deal in Q4.
List making: More consumers are expected to pre-plan their shopping trips, perusing newspaper circulars and clipping coupons before entering stores in 2012, a continuation of the 2011 trend. In an attempt to cut back on unnecessary and impulsive purchases, 70 percent make lists before entering the store.
Digital media: Digital media are quickly gaining acceptance to find recipes, coupons and other deals, becoming an integral part of the CPG purchase process. SymphonyIRI’s recent MarketPulse reported, for example:
• 39 percent of shoppers surveyed downloaded coupons from manufacturer websites in Q4, versus 35 percent in Q2.
• 37 percent of shoppers downloaded coupons from retailer Web sites in Q4, versus 35 percent in Q2
• 27 percent researched products on Web sites in Q4, versus 24 percent in Q2.
Bottom line: for retailers and manufacturers, reaching the consumer before they enter the store has become crucial. Tactics such online promotions via digital media outlets and even utilizing traditional paper circulars can attract more deal-hungry consumers. Additionally, as promotions within the retail environment may not be enough to cause a change in planned purchase decision, marketers can supplement pre-trip promotions with closely related in-store marketing campaigns to solidify and reinforce earlier decisions.
Manufacturers and retailers who capitalize on an understanding of economy-conscious consumer strategies and the importance of competitive deal offerings will have a leg up on competition and be one step closer to realizing the economic upsides of a recession rebound.
For more information about SymphonyIRI’s MarketPulse survey findings click here.
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