Shoppers Optimistic While Staying Frugal

Shoppers became more optimistic in Q4 2011, with an increase among those believing the economy improved in the last six months of 2011 and will continue to strengthen during the first six months of 2012.

That’s according to SymphonyIRI Group's latest MarketPulse survey, which also underscored shoppers’ continued conservatism in spending practices and their focus on maintaining the frugal habits initiated during the recession.

MarketPulse, which was launched in Q1 2011, is SymphonyIRI’s quarterly survey series, conducted to monitor and analyze shoppers’ attitudes and behaviors on the economy and economic effects on their personal financial conditions, lifestyle and shopping habits.

Throughout 2011, MarketPulse-based analyses have provided insights into a range of perspectives and opportunities vis-à-vis the country’s prolonged economic difficulties, including chief shopping strategies embraced by the growing population of male shoppers, the rise of digital shopping and purchasing, behaviors adopted by consumers expecting more bad times ahead and some fresh perspectives from a consumer group often overlooked in this penny-pinching era: wealthy consumers. These perspectives are published in a new SymphonyIRI Point of View, “Rich with Opportunity.”

“Through quarterly analysis of a full year of MarketPulse data, we discovered that shoppers were more optimistic in Q4 over Q3, but in many ways less optimistic than they were in Q1,” said Susan Viamari, editor of SymphonyIRI’s Times & Trends. “Still, the vast majority of shoppers made clear in Q4 that they have no plans to change their conservative shopping behaviors in the near future. As a result, the influence of both traditional and new media on shopper decisions continues to grow.”

In Q4, 20 percent of surveyed shoppers stated they expect the economy to improve during the next six months, a jump of 4 percentage points over Q3, but still well below expectations expressed in the first quarter of 2011. Shoppers communicated similar beliefs about their anticipated personal financial conditions in the coming year. Those believing their personal financial condition will be “a lot better” or “a little better” totaled 27 percent in Q4, once again reflecting an improvement versus the prior quarter, but not quite returning to the optimism reflected in first quarter results.

As illustrated in SymphonyIRI’s new “Rich with Opportunity” Point of View, wealthier consumers hold expectations for even brighter days in the future: 32 percent of consumers in this segment feel that their personal financial position will become stronger in the coming year.

Despite shoppers’ more optimistic view of the economy and their personal financial conditions, expectations about other life conditions are decidedly a mixed bag for the next 12 months.

Feelings around job stability have remained fairly unchanged throughout 2011, with 16 percent of consumers expecting improvement in the coming year. But persistent pessimism is revealed in the growing ranks of those expecting deterioration of job stability.

In the Q4 MarketPulse survey, 18 percent of consumers indicated expectations for diminishing job security in the coming year, versus 16 percent in the Q1 survey. While expectations for the overall cost of living are not quite as rosy as they were in Q1 2011, some measures are showing a slight improvement since the third quarter of the year. For instance, 21 percent noted in the Q4 survey the amount they will be able to put into their personal savings for the next year will improve, versus 18 percent in Q3. Twenty-one percent expect the value of their investments to rise in Q4, versus 18 percent in Q3. And, 16 percent expect their ability to get credit to become easier, versus 13 percent in the prior quarter.

On the positive side, slightly fewer consumers in Q4 anticipate these areas will continue to deteriorate in the coming year versus Q3 expectations. In the most recent quarter, 16 percent expect their ability to save will deteriorate “greatly,” and 11 percent of consumers stated that they expect their home real estate value to fall “greatly,” versus 17 percent and 14 percent, respectively, in Q3 2011.

A cornerstone to shoppers’ conservative behavior continues to be the deal. One-third of consumers purchased 50 percent or more of their baskets on deal in Q4. This trend holds true across income segments, including among the country’s wealthiest shoppers (those earning more than $100,000 annually), among whom 35 percent purchase at least 50 percent of their baskets on deal.

Additionally, deal-seeking behavior is on the rise, another trend that is evidenced across income segments. Twenty-six percent of shoppers are buying more on deal today versus one year ago. Even among wealthier shoppers, 20 percent purchased more goods on deal versus one year ago.

Shoppers increasingly made brand decisions based on a wide range of traditional and new media influences throughout 2011. Among traditional media, use of in-store circulars increased 8 percentage points during the year and were cited as a heavy influencer of brand decisions for 44 percent of respondents in Q4.

Coupons also gained steam, influencing brand choice for 55 percent of consumers in Q4 versus 48 percent in Q1. Use of newspaper circulars from home grew 6 points, from 43 percent in Q1 to 49 percent in Q4. Influence of new media is currently below that of the more traditional forms of communication and promotion, but these new means of reaching shoppers are growing quickly. For example, online advertising influence grew by 3 percentage points to 11 percent in just one quarter (Q3 vs. Q4). Recommendations from blogs or social networking sites also increased 3 points, from 5 percent to 8 percent during the year, as well.

Chicago-based SymphonyIRI Group, formerly named Information Resources, Inc., is the global leader in innovative solutions and services for driving revenue and profit growth in CPG, retail and healthcare companies.