Despite low unemployment rates and upticks in the stock market, consumers remained conservative on their spending during the first quarter of 2017, particularly on the CPG category. According to the “Early View 2017” report by IRI, a market analysis and consumer intelligence organization, shoppers are concerned about their financial well-being resulting in a downturn of unit sales.
The survey polled more than 2,000 U.S. shoppers regarding their spending habits, economic health and how that informed their purchases — or lack there of.
Generally, consumers are experiencing slightly more challenges to making ends meet. According to the report, 50 percent of respondents said they were making sacrifices to remain financially afloat — a one percent year-on-year rise. Unsurprising, the analysis revealed low-income and young shoppers are the hardest hit by the current economic climate.
The study also confirmed Millennials are the least brand loyal — willing to go a label for a better deal. Eighty-six percent of Millennials are willing to try a new, lower-priced brand and 55 percent of them will compare prices — the most out of any generation. What’s more, 62 percent of the deal-hunting demographic will download coupons.
All of these factors contributed to a decline in unit sales. “Conservative behaviors pushed unit sales down precipitously in January of this year, negatively impacting dollar sales trends; subsequent months have seen improvements but not growth,” the report said.
The analysis asserted that CPG companies that appeal to a broader scope of values belonging to consumers would fare the best. According to the survey, 38 percent of respondents across generations are willing to spend more on products that offer benefits beyond basic nutrition — 30 percent will spend more on natural or organic solutions.
Brands and retailers across categories will find advantages in marketing strategies that detail the wellness benefits of products — from organic yarn to non-GMO ingredients. To capture Millennial shoppers, merchants would behoove themselves to provide loyalty and coupon programs to lure the financially aware generation.
More on Consumer Behavior from WWD: