Majority of Consumers Prefer Lower Prices Over a Convenient Experience
CHICAGO — Consumers are finding it challenging to make ends meet, but many believe things will get better within the next year.
According to Mintel, 51 percent of Americans say they are currently concerned about the future of the economy. At the same time, a similar share (48 percent) feel confident their financial situation will improve in the next 12 months.
Digging deeper, nine in 10 consumers (94 percent) say they are currently worried about inflation. Sixty-seven percent believe the majority of Americans share in these concerns, while a third (34 percent) believe it's other Americans — rather than themselves — who are financially struggling right now. Meanwhile, 22 percent of Americans overall, and 31 percent of parents, say they are struggling to cover day-to-day expenses.
Inflationary pressures are driving consumers to cut back on nonessential purchases (40 percent) and dining out (37 percent), the research firm reported.
"Americans' heightened concern about the country's economic future — which greatly exceeds all other surveyed financial concerns — is likely due to the current laser-sharp focus on this topic across news media, the political arena and among business leaders," said Lisa Dubina, associate director of Culture & Identity, at Mintel.
"While not all consumers consider themselves financially struggling at this time, many are already adjusting their shopping behaviors regardless of their level of financial comfort," Dubina added. "To support struggling and concerned consumers, brands need to find creative ways to demonstrate the value of their products and services and tangibly reward customers as a way of building brand loyalty and repeat business."
Generational Differences
According to Mintel, age and current life stage affect consumers' greatest financial concern. Consumers ages 55 to 64 are more focused on big-picture concerns, including the overall wellbeing of the economy and their personal retirement savings.
Conversely, Generation Z consumers (those ages 18 to 24), are more concerned with their own short-term financial wellbeing: maintaining their current standard of living, their ability to pay their bills and ability to afford day-to-day necessities.
With these concerns in mind, Dubina pointed out that brands will need to consider these key differences to resonate with each generation.
Price Over Convenience & Sustainability
The research firm also pointed out that consumers are willing to pay more for higher quality; however, there's little else they prioritize before lower prices.
More than six in 10 consumers prefer lower prices over a convenient shopping experience, and 57 percent say they prioritize lower pricing over sustainable brand options.
Additionally, 63 percent of consumers say that brand name is not important to them when shopping most categories, yet 59 percent of people agree they'd rather pay more for a higher quality product than pay less to receive average quality.
"As consumers struggle to adapt to rising prices due to inflation and product shortages, they are likely to continue choosing the best price over the more sustainable and more expensive option," Dubina said. "Understanding that now is a difficult time for retailers to offer more discounts due to challenges like supply chain issues and the rising price of labor cutting into profit margins, offering creative perks and benefits to customers can increase the value of purchases and help build long-term customer loyalty.
"Now more than ever, it's important for brands to not only communicate the value of their products and services but also prove it to consumers who are increasingly looking to avoid financial risk or waste," she added.