IRI: Consumers Optimistic About Economy, Willing To Spend More On Quality Items

CHICAGO — Feb. 8, 2017 — The majority of consumers see a brighter future for 2017, according the latest IRI Consumer Connect™ survey released today. The Q4 2016 findings reveal that 70 percent of consumers feel their household finances will improve in the next six months, and they are willing to pay a premium for higher quality and highly differentiated packaged goods products as well as for the convenience of shopping online.

“Consumers are feeling optimistic about their finances but splurge-worthy priorities and money-saving strategies differ by shopper,” said Susan Viamari, vice president of Thought Leadership for IRI. “The key for CPG marketers is to know these shoppers inside and out, so they can precisely target the right products to the right shoppers. Our Consumer Connect survey provides excellent insights into these important shopper attitudes and behaviors.”

Optimism Varies Across Generations, Incomes and Ethnicity

After surveying consumers in early January 2017 after the U.S. presidential election, Consumer Connect results point to a gap between younger and older consumers regarding improvements in their household finances for the first half of 2017. Thirty-three percent of 18- to 34-year-olds and 38 percent of 35- to 54-year-olds think their personal finances will improve, while only 18 percent of 55- to 64-year-olds and 11 percent of those aged 65-plus think their finances will improve.

Meanwhile, optimism about future financial health is fairly consistent across income ranges. Among those expecting improvements:

• 24 percent are consumers who earn $35,000 or less
• 24 percent are consumers who earn $35,000 to $54,000
• 25 percent are consumers who earn $55,000 to $99,000
• 21 percent are consumers who earn $100,000 or more

This financial optimism cuts across ethnic backgrounds: 24 percent are African American, 3 percent are Asian, 14 percent are Hispanic and 62 percent are white consumers feeling their household finances will improve in 2017.

Consumers Open to Making Some Thoughtful Splurges
From skin care products to their favorite beverages, consumers are willing to open their wallets and spend more for certain bells and whistles. CPG marketers have opportunities to drive margin across the following products:

Consumers also are willing to pay more for the product selection and the convenience of shopping online. Overall, 33 percent of optimistic consumers and 20 percent of the overall population say they will pay more to order products online and have them delivered to their home. And 18 percent of optimistic consumers and 10 percent of the total population will splurge to order online and pick up in the store.

Shoppers Still Keeping the Budget in Check
Despite widespread optimism, deal-seeking remains pervasive, as consumers look to spend their hard-earned money wisely. And, among the one-third of consumers who remain concerned and expect their financial position to deteriorate in the coming six months, deal-seeking is even more common. For instance:

• 85 percent of these pessimistic consumers will buy private label to save money compared to 81 percent of the overall population
• 77 percent of pessimistic consumers will try lower-priced brands to save money compared to 72 percent of the overall population
• 75 percent of pessimistic consumers will compare prices in retailers’ weekly circular to find the lowest prices compared to 68 percent of the general population
• 64 percent of pessimistic consumers will visit multiple retailers to keep their grocery bill low compared to 57 percent of the overall population
• 61 percent of pessimistic consumers will compare prices on retailers’ websites to find the lowest prices compared to 50 percent of the overall population

”Overall, 2017 is looking like it will provide several growth opportunities for CPG,” concludes Viamari. “Consumers will spend more to get more, but it’s important that CPG marketers provide reassurances and encouragement throughout the year through the use of targeted messaging that reinforces the value proposition.”

About the IRI Consumer Connect 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 healthcare 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 [email protected].

About the IRI Partner Ecosystem 
IRI fundamentally believes that delivering differentiated growth for clients, driven by truly personalized marketing activation, requires deep, highly integrated partnering with a variety of best-of-breed companies. As such, 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 Adobe, The Boston Consulting Group, comScore, Experian, GfK, Gigwalk, Ipsos, Kantar, MasterCard Advisors MaxPoint, MillwardBrown Digital, Mu Sigma, Oracle, SPINS, Survey Sampling International, Univision and others.

About IRI
IRI is a leading provider of big data, predictive analytics and forward-looking insights that help CPG, OTC healthcare organizations, retailers and media companies grow their businesses. With the largest repository of purchase, media, social, causal and loyalty data, all integrated on an on-demand cloud-based technology platform, IRI helps to guide its more than 5,000 clients around the world in their quests to remain relentlessly relevant, capture market share, connect with consumers and deliver market-leading growth. A confluence of major external events — a revolution in consumer buying, big data coming into its own, advanced analytics and automated consumer activation — is leading to a seismic shift in drivers of success in all industries. Ensure your business can leverage data at www.IRIworldwide.com.

Editor's note: Of particular interest is the movement towards national and organic products as well as foods with additional health benefits. These should be among the new launches for vending, micro market and office coffee service operators at their locations. The preference for convenience will also help operators. While we are not an online retail shopping outlet, fast and easy access to snack and food items is our bread and butter.