Consumers Are Back in the Game'
Consumer confidence improving, Nielsen exec says at SOI
CHICAGO -- "Consumers are back in the game," declared James Russo, vice president of global consumer insights at Nielsen, as he launched into his presentation on consumer behaviors at the NACS State of the Industry Summit in Chicago. "Consumers were on the sidelines in 2008 and early 2009, but now they are back in the game," he said.
Russo (pictured) went on to explain that while consumer confidence is not quite rosy, it is improving. Consumers have basically accepted where they are these days and are looking ahead to what's next.
Providing the audience with multiple [image-nocss] data points, Russo painted a picture of today's consumer environment, which consists of tough, but moderating conditions. Unemployment is still high, foreclosures are increasing and banks continue to close.
The popular concept of a "new normal" has emerged, characterized by changing consumer behaviors: a 12% increase in canning and freezing, a 9% increase in cookbook sales and an uptick in sales of Blu-ray disks and time spent online. But Russo countered this widespread belief of a new normal with evidence supporting that the consumer might be coming back.
Tracking the "buzz" on thousands of blogs online, Nielsen sees consumers expressing hopes about job growth and economic recovery. Global consumer confidence seems to be on a rebound, and the U.S. consumer has expressed signs of more discretionary spending.
It is this return to discretionary spending that characterizes the future consumer, but this is not the same consumer retailers are used to serving. For these consumers, value is defined by what they want, when they want itbut at a price they can afford.
Outlining near-term recommendations for growth, Russo advised:
Target ongoing consumer needs statesthe essentials, consumable foods, value, deep-rooted trends. Capitalize on weaknesses in the restaurant market. Stick to your strengths in morning meal, afternoon/evening snack occasionsall while pursuing dinner opportunities. Optimize assortment mix in time of change. Take advantage of meteoric growth in social media. Longer term, Russo recommends:
Focusing on overseas opportunities. Understanding the demand economy (it's not about more choices, but the right choices). Accepting that store brands are here to stay. Aligning with aging population. Leveraging the changing role of women. Getting connected via social media. The ultimate challenge is for retailers to rethink their consumers, since they are indeed "back in the game." Retailers who know what their consumers watch and what they buy will continue to come out on top.Data presented at the NACS State of the Industry Summit was preliminary and derived from company submissions as of March 31. Final industry data will appear in the NACS State of the Industry 2009 Data Report, which can be ordered directly from NACS at www.nacsonline.com.
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