According to recent research by IRI, 70% of shoppers note they have fewer savings than they used to, and 71% agree they have less total wealth. The financial and psychological impact of the past nine months has taken its toll on consumers, and they are responding with evolved purchasing behavior.
In turn, consumers are becoming more resourceful and strategic when planning their purchases for meals, wardrobe, home and automobile maintenances and personal care.
According to the IRI survey, 60% of individuals are wearing clothing multiple times to reduce laundry costs. They are not just extending the use of existing items; they are also seeking low-cost substitutes. Nearly 44% of consumers are trading their doctor for information on the Internet. There is a plethora of information available on the Internet, and consumers are relying on it more and more to help inform their product purchases.
This purchasing evolution is not only impacting what they buy but how they buy. Thirty percent are making bulk purchases with others who are not in their households to secure low prices, and 35% of those shoppers intend to continue doing so when the economy recovers. For consumer product companies, the message is clear: consumers expect more value. They are taking more care over their spending decisions, seeking out information online, and taking the advice of family and friends to heart.
Conventional wisdom is that "green" sentiment is a luxury. However, according to the May 7 UBS report on consumer attitudes toward environmental concerns, 36% said they were prepared to pay more for natural/organic cosmetics and 52% said environmental considerations will impact their future auto purchases. Despite the state of the economy, consumers are still willing to pay more for specific eco-friendly claims.
Consumers remain receptive to green products especially when they offer a direct health benefit or a longer-term financial payoff. For other green products, price remains an impediment for growth. According to the UBS survey, 66% of respondents said they had bought more green/fair trade products over the past year; however, 44% said that any increase in such purchases depends on price.
The opportunity for CPG brands is to connect with the evolved definition of American values. With the "American Dream" farther off than ever, consumers find themselves taking stock of their predicament and making changes toward a sustainable future. As a by-product of the financial crisis, dismal economy and the "Obama effect," consumers are taking responsibility for their future and looking for corporations and brands to follow suit. As "green" becomes mainstream, CPG brands must connect with the evolving needs of consumers by providing brand values that resonate beyond instant gratification.
Consumers are taking a fresh look at their purchases and looking for brand relationships that reflect a commitment toward a brighter, more sustainable future. Corporations must discover the synergy between environmental and financial sustainability and CPG brands must connect with the evolved set of consumer values to instill brand loyalty and grow market share.