Consumers Show Cautious Optimism in Brighter Economy

Just over one quarter of shoppers (27 percent) anticipate they will be financially better off a year from now, up from 22 percent one year ago. In a similar sign of good news, 21 percent believe their financial positions will be worse a year from now, down from 30 percent the same time last year.

Consumers’ cautious optimism is a principal finding of SymphonyIRI’s second-annual EconoLink survey, “Economic Shopper Segmentation: A Look into How Shoppers Are Changing Their Behaviors in Today’s Economic Environment.” The study segments shoppers into one of six profiles and surveys their attitudes and shopping patterns. Aligning with this year’s election season, SymphonyIRI also conducted a companion survey that analyzes shopper voting preferences based on their EconoLink profiles.

“Many shoppers believe their financial situations will be stronger next year, reflecting other SymphonyIRI surveys released this year,” said Robert I. Tomei, president, Consumer & Shopper Marketing for Chicago-based SymphonyIRI Group. “We anticipate, however, that many shoppers across all segments will continue to practice prudent shopping patterns, such as buying on deal, choosing store brands over national brands, and researching offers online. These foundational trends are not fleeting shopping behaviors and will have a profound impact on manufacturers and retailers for years to come.”

EconoLink groups shoppers into a series of unique profiles, enabling CPG and retailer marketers to better understand how their categories, brands and stores perform. These segments include:

  • Downtrodden: With a median annual income of $41,000, these shoppers are highly pessimistic about their financial situations and tend to shop at mass merchandisers, dollar and convenience stores.
  • Cautious and Worried: These shoppers also have a bleak financial outlook, tend to shop at mass merchandisers, and have a median income of $42,000.
  • Start-Ups: Impacted by the recession but with a bright outlook, Start-Up shoppers have a median income of $44,000 and skew toward shopping at grocery, drug and convenience stores.
  • Optimistics: With a median income of $48,000, these shoppers favor supercenters, drug and convenience stores.
  • Carefree: A financially stable group, these shoppers earn a median income of $59,000 and skew toward shopping at club stores. They tend to be brand loyal.
  • Savvy Shoppers: Earning on average $81,000 and financially stable, Savvy Shoppers favor grocery, drug and mass merchandiser channels. They enjoy shopping and the quest for value.

Shoppers Are Increasingly Optimistic, but Gloom Remains

The outlook for the future is generally positive among all EconoLink segments, with the most optimism exhibited by Downtroddens, 16 percent of whom believe their financial situation will be stronger one year from now as compared to 11 percent who held this belief last year. Start-ups’ optimism doubled; 18 percent believe their financial situation will be better next year, as compared to just 9 percent last year. Carefrees also have a positive outlook (18 percent this year versus 11 percent last year).

EconoLink also studied shoppers’ attitudes about their financial positions today versus one year ago. Overall, 18 percent believe that compared to last year, their financial positions are better, versus 15 percent who held this view last year. Those stating their financial positions are worse today versus last year decreased from 38 percent in 2011 to 34 percent today. Within the shopper segments, the largest increases in optimism were found among Start-Ups (11 percent stating their financial situation today is better than one year ago versus 6 percent who said the same last year), and Carefrees (15 percent versus 10 percent).

Despite consumer optimism, trends that point to weaknesses in the recovery remain. Dollar spending via trade and coupons jumped to 31 percent from 27 percent in Q2 2012 over Q2 2011. Shoppers in some EconoLink segments are faring less well than others, with just 17 percent of Savvy Shoppers believing their financial situations are stronger today as compared to a year ago, versus 23 percent last year. Even Optimistics are not as positive as their segment name indicates; their beliefs about their financial situation this year versus last are statistically flat in this year’s survey when compared to last year’s results.

“Today’s shopping environment is extraordinarily complex, with shoppers sometimes reporting what appears to be inconsistent behavior,” said Larry Levin, executive VP and general manager, Consumer & Shopper Insights, SymphonyIRI. “For example, Cautious and Worried shoppers, with the second-lowest median annual incomes and a bleak outlook, are not likely to actively collect coupons, use in-store circulars or pay attention to signs and displays in the store. Yet, they are among the most price-sensitive shopper segments.”

And the Winner of the Presidential Election Is…

SymphonyIRI fielded a companion survey to this year’s EconoLink study, asking shoppers about their voting plans for the 2012 presidential election.

When grouped by shopping segment, 60 percent of Optimistics, 49 percent of Savvy Shoppers and 48 percent of Start-Ups generally have a more positive outlook on the economy and appear more likely to vote for President Obama.  Forty-six percent of Downtroddens and 44 percent of Cautious and Worrieds seem to favor Governor Romney. Those who remain undecided in these segments range from 11 percent to 19 percent, which appear to be a higher percentage than is reported in national polls.

When analyzed by candidate, 28 percent of Optimistics, 17 percent of Cautious and Worrieds, and 16 percent of Savvy Shoppers plan to vote for President Obama. Twenty-six percent of Cautious and Worrieds, 22 percent of Downtroddens and 15 percent of Optimistics plan to vote for Governor Romney.

SymphonyIRI’s EconoLink Economic Shopper Segmentation Report is an annual study of shopper behaviors based on a series of unique profiles, enabling CPG and retail decision makers to develop new product, promotion, merchandising, pricing and store layout strategies to better cater to shopper wants and needs. SymphonyIRI surveyed 2,420 shoppers between May 9-30 and Aug. 20 - Sept. 9.

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