Consumers Feeling More Positive About Household Finances
Significant jump in consumer confidence across all age groups, says IRI
CHICAGO -- After a rocky end to 2013, consumer confidence increased dramatically in first-quarter 2014, according to IRI's latest MarketPulse survey. All age groups are reporting a sunnier outlook, especially millennials, who are showing their greatest uptick in confidence, even though they've been one of the most downtrodden consumer segments, since the economic downturn began. IRI has been monitoring the struggles of millennials and is taking a closer look at this notable increase in a special Point of View report, "Millennial Shoppers: Positive Mindset Points to Future Growth."
"The headline for the first quarter is definitely the surge in consumer confidence," says Susan Viamari, editor for thought leadership at IRI. "Consumers say they are feeling more confident about their household finances and don't feel like they need to sacrifice as much in order to make ends meet; however, it's important to remember that consumers are still entrenched in their conservative shopping strategies, so CPG marketers still need to work at finding pockets of opportunities."
Constructed against a benchmark of first-quarter 2011, IRI's Shopper Sentiment Index provides insight into how the economy is affecting consumers and changing how they approach grocery shopping. The index provides perspective in terms of price sensitivity, brand loyalty and changes in spending required to maintain desired lifestyles. With a benchmark score of 100, a Shopper Sentiment Index score of more than 100 reflects consumers who are less price driven, more loyal to favorite brands and better equipped to maintain their desired lifestyle without changes.
The latest index for first-quarter 2014 is 121 versus 103 in first-quarter 2013 and 100 in first-quarter 2012. This is the all-time highest point since the inception of the index. In addition to millennials' rosy outlook, those aged 35 to 54, whose outlooks have been rather volatile, also posted a sizeable jump this quarter. Those aged 55 and older also showed an increase.
Consumers remain comfortable with the shopping strategies they adopted earlier in the downturn, which reinforces that the conservative "new normal" is here to stay regardless of confidence levels. With this in mind, 70% of savvy consumers make a shopping list before they enter a store, and 75% make their purchase decisions before entering the store. These figures have not changed since 2011, so it's absolutely critical to begin the conversation early with consumers.
Because 19% of all consumers and 26% of millennials are having difficulty affording groceries today, shoppers are still buying a lot of items on deal. For instance, 33% of all consumers and 40% of millennials are buying more than one-half of their baskets on deal. And, 19% of all consumers compared with 25% of millennials say they are buying more on deal in 2014 than in 2013.
It's no surprise that consumers are turning to the Internet to find deals. Specifically:
- 29% are downloading coupons from retailers' websites.
- 29% download coupons from manufacturers' websites.
- 25% research products on websites.
- 19% visit online deal sites, such as Groupon or SmartSource.
- 11% use social media sites, such as Twitter, to get coupons.
"While it's great that sentiment is on the rise, marketers must stay on top of their game and continue to deliver solid value that enables consumers to live well while remaining conservative," said Viamari. "The diversity of this quarter's survey results clearly demonstrates there is no single path to recovery, and marketing strategies must recognize and reward the variability out in the marketplace."
IRI provides new survey results at the end of each calendar quarter covering shoppers' behaviors and attitudes as they directly relate to their strategies for learning about, purchasing and utilizing CPG and healthcare products, as well as information regarding perceptions of economic conditions and their ability to provide for their families.