By Susan Viamari
It’s not a stretch to say that many U.S. consumers are still struggling financially. With the reduction in SNAP benefits during the past few years and years of uncertain economic conditions, it can be a challenge for CPG manufacturers and retailers trying to make their products stand out on something other than the lowest price.
But things are getting better. According to IRI’s latest MarketPulse survey, which provides a quarterly snapshot of shoppers’ behaviors and attitudes, consumers are feeling more optimistic about their current financial situations and future overall. In this most recent quarter, millennials really stood out from other consumer segments.
One-third of millennials believe the economy has improved in the last six months, with 28 percent predicting more improvement in the coming six months. In fact, millennials’ financial confidence is the highest it has been since the inception of IRI’s Shopper Sentiment Index. But 25 percent of millennials are still struggling to afford their groceries, so they are still actively seeking deals when shopping for CPG products:
- 47 percent download discounts from couponing sites, such as SmartSource
- 45 percent download coupons from retailer websites
- 43 percent download coupons from manufacturer websites
- 35 percent visit online deal sites, such as Woot or Groupon
With this deal-seeking behavior prevalent among millennials, CPG brands must target the value they deliver tightly to the consumers they’re trying to reach. Is it the millennials who are more financially-challenged – perhaps unemployed or underemployed – or those who are more secure? Like other consumer groups, millennials are not all the same and there are countless segments and mindsets to understand and consider when targeting them.
Also, with shoppers overall still more conservative in their spending, think about how your brand can build perceptions about value. Is smaller pack size a reasonable option? Will making a change to the type of packaging you use drive more usage occasions? Will combining your product with a complementary one build baskets and broaden appeal? Your strategies should be aligned with the needs of your target customers.
At the end of the day, all shoppers want great quality products that give them the results they want at a reasonable price. CPG brands that deliver will be the ones that win in 2015 and beyond.
To learn more about the latest trends in consumer shopping behavior, read Promise Peeking Through for CPGs.