The current recession has created a new niche of consumers identified as the “Downturn Generation” by Information Resources, Inc. (IRI), the leading global provider of consumer, shopper, and market insights for the consumer packaged goods (CPG), retail, and healthcare industries. This new generation of Americans is adopting practices similar to Depression-era shoppers, implemented both to weather the recession and to keep a close eye on spending long after the recession ends.
The latest IRI Point of View, “Dissecting the Downturn Generation.
Recognizing and Leveraging Permanence in Today’s Transformational Economy,” highlights how shoppers are changing behaviors to adapt to the unstable economy and uncovers the new habits they intend to continue even if the economy improves. The report reveals permanently changed approaches toward important rituals, including diet, self care and home maintenance and classifies three emerging categories of shoppers, which are.
- Optimists - believe “things will get better during the next 12 months,” are spending wisely, cutting back selectively and making sacrifices as a last resort
- Maintainers - agree that, “the economy won’t get worse, but it won’t get better either” and are also spending wisely, but are more aggressive about making cutbacks
- Pessimists – identify with the direst predictions, believing “if you think times are hard now, next year will be worse” and are cutting back wherever possible and hunting tirelessly to find deals
“Optimists, maintainers and pessimists are each weathering the recession in unique ways, but all three groups have made obvious behavioral and attitudinal changes and many admit they intend to prolong the use of their new methods,” said IRI Consulting and Innovation President Thom Blischok. “We believe the Downturn Generation will continue their current behavior patterns until they have regained confidence in the U.S. economy. Interestingly, shoppers looked for a return of ‘stability’ as a signal that the economy is pulling out of the recession, in particular, ‘stability’ across gas, food and energy prices, as well as home values.”
Shoppers Still Dramatically Impacted by Weakened Financial Position
Shoppers remain significantly concerned about the “American Dream” as concurrent pressures on housing, energy, transportation and automotive markets affect their ability to own a home that rises in value, hold a job with security, build savings and gain access to credit sources.
Among the notable responses.
- Nearly 64 percent of shoppers characterize their financial condition as a little or a lot worse off than last year; approximately 30 percent believe their finances will be a little or a lot better one year from now.
- Seventy percent of shoppers note they have less savings than they used to, while an equally significant 71 percent agree they have less total wealth.
Even though gas prices have declined as much as 50 percent from the highs of fall 2008, 73 percent of surveyed shoppers state rising gas prices “Impacted” or “Strongly Impacted” their financial situation during the past six months. In addition, 75 percent note rising food prices “Impacted” or “Strongly Impacted” their financial situation, even though food prices have largely leveled off or declined since summer 2008.
Shoppers’ weakened financial conditions are profoundly affecting how they shop and what they buy.
- More than 69 percent say they are more likely to look through retailer ads for deals.
- Nearly 82 percent are more likely to look for sale prices once in the store.
- Just under two-thirds (65 percent) say price is becoming more important than convenience in brand purchases.
“Financial pressures are causing shoppers to give up favorite brands, buy smaller quantities of preferred items or postpone non-essential purchases for entertainment in order to save money for their most important needs,” adds Blischok. “Additionally, between 30-47 percent of consumers are buying less healthy products, and fewer fresh produce and organic items. This is a fundamental shift from the trends we noted before the economic downturn.”
New Consumer Purchasing Strategies for Diet, Home and Healthcare
Consumers are becoming more resourceful and strategic when planning their purchases for meals, wardrobe, home and automobile maintenance and personal care. New approaches identified include consumers turning to the plethora of information available on the Internet to help prepare for purchases, clip online coupons and research reviews, commentary and opinions on products and services before making a purchasing decision.
In fact, more than 44 percent of shoppers are using online resources to find coupons today, and 55 percent of them plan to continue this practice into the future.
Low prices and sale items continue to dominate shopper decisions at stores, and consumers are increasingly collaborating with friends, family and neighbors to share information, split membership costs and divide bulk goods purchased at a lower cost.
- Fifty-nine percent visit multiple stores for the lowest prices, and 42 percent of those shoppers will continue to do so into the future.
- Thirty percent are making bulk purchases with others not in their households to secure low unit prices, and 35 percent of those shoppers intend to continue doing so.
- More than 34 percent are collecting, sharing and trading coupons with others, with 40 percent of those shoppers planning to continue this behavior.
Consumers are also cutting back on their healthcare costs, opting to treat themselves at home versus visiting a doctor and increasing their use of over-the-counter (OTC) medications. Additionally, individuals are limiting spending on new clothes and foregoing home projects, vehicle upkeep and home cleaning rituals.
- Nearly 44 percent of surveyed consumers are trading their doctor for information on the Internet and half of those shoppers will use this strategy in the future.
- A significant 70 percent of shoppers are cutting back clothing purchases, with 56 percent of them noting they will do so in the future.
- Sixty percent of individuals are wearing clothing multiple times to reduce laundry costs, with half planning to continue to do so.
“We see that shoppers are altering their spending habits across all significant lifestyle categories. CPG retailers and manufacturers must plan for the continued practice of these new behaviors in order to meet consumer needs and continue to thrive in business,” Blischok continues.
“CPG innovators can inspire the Downturn Generation by providing promotion strategies that match their desires, speaking to them through online sources, and realizing that a product that is good enough is really good enough. These strategies can help brace us for the new conservative consumer.”
To download “Dissecting the Downturn Generation: Recognizing and Leveraging Permanence in Today’s Transformational Economy,” visit us.infores.com/Insights/Publications/IRIPointofView/tabid/197/ct .. :
.Source - PR Inside.com
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