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IRI MarketPulse Survey Finds Consumers’ Slow March toward Optimism Continues

Typical Shopper Sentiment Decline in Q2 Follows Surge of Optimism in Q1

CHICAGO — July 21, 2015 — Consumers rang in the new year full of optimism, but with nearly seven months of 2015 under their belt, this sunny outlook has faded a bit. The latest IRI MarketPulse™ survey found that shopper sentiment dropped in Q2 2015, but it is consistent with the dip typically seen during Q2 in past years. The good news is that sentiment is higher in Q2 2015 compared with Q2 2014, so consumers are feeling better about the direction of the economy and their own financial health, but they do remain cautious.

“That new year’s high does give way to reality after a few months, so this decline isn’t surprising,” says Susan Viamari, vice president of Thought Leadership, IRI. “Consumers are indeed cautiously optimistic, but they’re still focused on value. They want brands that will offer them a good experience—and that good experience truly must be an experience that is highly tailored to the needs and wants of each individual target consumer at any given moment of purchase.”

IRI Shopper Sentiment Index Declines in Q2 2015

Constructed against a benchmark of Q1 2011, IRI’s Shopper Sentiment Index provides deep insight into how the economy is impacting consumers and changing how they approach grocery shopping. The index provides perspective in terms of price sensitivity, brand loyalty and changes in spending required to maintain desired lifestyles. With a benchmark score of 100, a Shopper Sentiment Index score of more than 100 reflects consumers who are less price driven, more loyal to favorite brands and better equipped to maintain their desired lifestyles without changes, as compared to Q1 2011.

The latest index dropped to 123 in Q2 2015 compared with 138 in Q1; however, it does remain higher than the Q2 2014 index, which came in at 117. Overall, 24 percent of consumers feel their financial situation has improved during the past year, and 24 percent feel their situation remains unchanged. In addition, 23 percent expect improvement in the coming six months, which is consistent across all groups. For instance, 22 percent of millennials, 27 percent of those age 35-54 and 21 percent of baby boomers expect this positive progression to continue throughout the remaining months of 2015.

It’s All in the Details

Consumers have been cautious about opening their wallets for the past several years, and this isn’t going to change anytime soon. In fact, they are still doing their homework and planning what to purchase before they even step out of the house:

  • 64 percent are making a list prior to going to the store
  • 52 percent are choosing the store they will shop at because it offers the lowest prices on needed items
  • 45 percent are stocking up on certain items when they are on sale

The Price Is Right

Consumers love to get a good deal, but they are even more focused on value. In fact, less than 50 percent of the shopping basket is purchased based on deals for two-thirds of shoppers. Since value means different things to different people, it’s absolutely critical for manufacturers and retailers to get the base price for products right. From there, deals can be used to capitalize on short-term, tactical opportunities.

  • 83 percent will choose brands based on price in the coming year
  • 80 percent will choose brands based on previous trust/usage
  • 58 percent will choose brands based on household requests

“Retailers and manufacturers must work together to create holistic pricing strategies that underscore the value proposition for consumers, while still supporting their share, margin and growth goals,” adds Viamari. “It’s not an easy task to achieve these goals. Marketers need to look across categories—and even aisles—to pinpoint categories where price cuts will generate sales lift and measured price increases will support margin without negatively impacting volume.”

About IRI’s MarketPulse Survey

IRI provides new survey results at the end of each calendar quarter covering shoppers’ behaviors and attitudes as they directly relate to their strategies for learning about, purchasing and utilizing CPG and health care products, as well as information regarding perceptions of economic conditions and their ability to provide for their families. For more information about customizing the research for a particular category or industry, please contact IRIMarketing@IRIworldwide.com.

About the IRI Partner Ecosystem

IRI fundamentally believes that delivering differentiated growth for clients requires deep, highly integrated partnering with a variety of best-of-breed companies. Therefore, IRI works closely with a broad range of industry leaders to create innovative joint solutions, services and access to capabilities to help its clients more effectively compete in their various markets and exceed their growth objectives. IRI is committed to its partnership philosophy and continues to actively enhance its ecosystem of partners through alliances, joint ventures, acquisitions and affiliations. The IRI Partner Ecosystem includes such companies as BlueKai (an Oracle company), The Boston Consulting Group, comScoreDatalogix (an Oracle company), Experian, GfK, GuestMetrics, IpsosKantarMaxPoint, Millward Brown DigitalMu-Sigma, Oracle Social Cloud, RentrakSPINSUnivision, MasterCard Advisors and others.

About IRI

IRI is a leader in delivering powerful market, consumer and media exposure information, predictive analytics and the foresight that leads to action. We go beyond the data to ignite extraordinary growth for our clients in the CPG, retail and over-the-counter health care industries by pinpointing what matters and illuminating how it can impact their businesses. Move your business forward at www.IRIworldwide.com.

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Email: Shelley.Hughes@IRIworldwide.com
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