US consumers are still pessimistic even though the recession officially ended two years ago – but there are opportunities for manufacturers to appeal to ‘downturn consumers’, according to a new report from SymphonyIRI.
The report, called “The Downturn Shopper: Buckled in for a Wild and Crazy Ride”, found that nearly half of consumers (44%) felt that their financial situation had deteriorated over the past year and a strong majority felt that their finances would continue to deteriorate or remain the same over the coming year.
However, the market research organization claims that there is an upside for food and beverage manufacturers as consumers have developed more home-based habits.
“Themes of ‘simplification’ and ‘conservation’ have evolved around food and beverage-related rituals during the course of the economic downturn,” the report said.
It found that 55% of consumers said they were creating and serving simpler, less expensive meals at home, 42% said they were bringing more snacks from home in order to save money, and 33% said they were snacking less frequently.
SymphonyIRI’s senior vice president of marketing John McIndoe said: “If CPG and retail marketers can adjust their strategies to appeal to today‘s very conservative and risk-averse ‘downturn shoppers’, they will enjoy immediate rewards in the form of sales, share and loyalty, even before the economic turnaround finally does start to impact consumers at large,” he said.
McIndoe says that downturn consumers are not necessarily low-income consumers, and the organization’s research has found that relatively wealthy consumers are often among the most aggressive coupon-cutters.
“These shoppers are likely to clip paper coupons and download digital ones, seek out lower prices by visiting multiple banners, shop on a just-in-time versus stock up basis, and focus more on value than trusted brands,” he said.
However, value does not necessarily mean price and convenience alone.
“To win at retail, every aspect of the product in question must be on target, ranging from product ingredients, portion size, and packaging to price, promotion, merchandising, store layout and shelf placement.”
The report found that many US consumers have changed their habits, as the economy remains in a difficult state, with unemployment and inflation expected to continue to impede growth prospects in the year ahead. Nearly a quarter (23%) said that they struggle to afford their groceries, and 55% said that they eat out less often.
This has a mixed result for food and beverage manufacturers, as consumers have less money to spend on food in general, but are spending more on eating at home.
“This ride has brought great opportunity for CPG marketers. But to capture that opportunity, marketers are travelling a track of twists and turns. Rising gas prices and falling stock prices. Inflationary commodity cost and diminishing margins. High unemployment and low consumer confidence,” the report said.