Summary
- Rising everyday expenses have left consumers with tighter budgets and growing financial concerns.
- Brands can make a significant impact by offering savings as shoppers prioritize cost-conscious choices.
- In addition to savings, brands can provide value through affordable pricing, product substitutions, and customer loyalty programs, fostering trust and long-lasting relationships with their customers during challenging economic times.
Everyday expenses are spiraling upwards, and the list of consumer financial concerns is growing. Gas prices, housing interest rates and credit costs are all climbing. In a landscape where every dollar counts and daily expenses continue to escalate, thoughtful and innovative brands have an opportunity to make a meaningful difference in consumers’ lives by providing value, savings and support that help consumers manage their finances efficiently and make ends meet.
Cause For Pessimism: Understanding Consumers’ Financial Concerns
A recent nationwide survey of 2,000 adults revealed many Americans have deep concerns about the possibility of an economic downturn mirroring the severity of the 2007-2009 financial crisis. Sixty-eight percent of respondents anticipate a recession within the next six months, with an even more alarming 80% of these individuals expecting it to be a severe one.1
Amid the backdrop of economic uncertainty and the daily financial struggles of households, it’s crucial to understand the specific challenges consumers face and from where this economic pessimism stems. The erosion of the dollar’s purchasing power over the past couple of years has left consumers grappling with tighter budgets and heightened financial anxiety. To combat the current inflationary pressures, the Federal Reserve is likely to continue a series of rate hikes. These mounting inflationary pressures, coupled with rising interest rates, impact various financial aspects of consumer finances.
The resumption of student loan interest accrual on September 1, with payments recommencing in October, adds another layer of financial stress for millions of borrowers as they struggle to realign their monthly budgets. The Consumer Financial Protection Bureau’s analysis reveals 20% of these borrowers carry risk factors that could make the repayment process challenging.2 Vericast’s August 2023 Awareness-to-Action Study found that 76% of those with paused student loan payments are looking to cut expenses everywhere they can. These consumers are trying to reduce expenses from groceries to mobile and cable services, while looking to consolidate debt.
The economic landscape is also seeing higher-income households grappling with unprecedented credit card debt as 72% of those earning $100,000 or more find themselves entrenched in credit card debt for at least one year.3
Meanwhile, food and financial insecurity continue to create perilous conditions for consumers — nearly one-third of all Americans, and nearly 40% of younger Americans, skip meals due to financial concerns.4 These revelations underscore the widespread impact of financial pressures across various income brackets.
How Brands Can Help: The Power of Discounts and Coupons
The influence of savings in consumer decision-making cannot be overstated in today’s economic landscape. Shoppers are firmly in the driver’s seat, and if a brand doesn’t offer them meaningful savings, they are more than willing to explore other options that do. They are also more discerning than ever, with savings playing a pivotal role in their buying choices.
It is increasingly apparent that brands have a pivotal role to play in offering solutions and savings options to consumers facing economic challenges. Brands that do so have an opportunity to make a meaningful difference in the lives of consumers and foster lasting loyalty.
Coupons, deals, and promotions have emerged as powerful factors that shape purchase decisions for individuals and households. According to the Vericast Awareness-to-Action Study conducted in February 2023, 41% of consumers prioritize shopping at stores offering the lowest prices.5 This data underscores the growing importance of cost-conscious shopping in the consumer psyche.
For example, the Vericast 2023 CPG + Grocery TrendWatch highlights a significant shift in consumer behavior, where the decision to dine out or cook at home is often predicated on what individuals perceive as the most cost-effective option.6 In this context, coupons, deals, and promotions remain a top factor influencing purchase decisions. Brands that recognize this trend and proactively provide savings opportunities are more likely to win the loyalty of consumers.
The Vericast Awareness-to-Action Study conducted in June 2023 unveiled further insights into consumers’ attitudes toward savings, with a significant 51% of respondents affirming that “Saving money through coupons and discounts is a necessity to make ends meet.” Additionally, 33% of respondents indicated they actively seek printed circulars to save money on groceries when faced with high prices, while 29% turn to digital circulars for similar savings during times of economic strain.7
These statistics not only highlight the financial priorities of consumers but also underscore the need for brands to offer savings opportunities. Brands that recognize the pressing need for discounts and coupons and adapt their strategies accordingly are better poised to resonate with cost-conscious consumers, forging lasting connections based on shared financial values.
Beyond Discounts: Strategies for Consumer Value
In addition to coupons and discounts, there are other ways brands can provide support and value as consumers navigate challenging economic times:
- Affordable Pricing: Brands can offer competitive pricing and value-oriented products to help consumers stretch their budgets further.
- Product Substitutions: Brands can offer more budget-friendly alternatives or smaller packaging sizes for their products, allowing consumers to purchase what they need without overspending.
- Customer Loyalty Programs: Rewarding loyal customers with exclusive discounts, early access to sales, or points-based systems can help consumers save money over time.
Brands must adapt to consumers’ changing preferences and prioritize value, savings, and promotions. By adopting these strategies, brands can show empathy and solidarity with consumers facing economic challenges. Brands that genuinely prioritize consumers’ financial well-being are more likely to build trust, loyalty, and long-lasting relationships with their customer base.
Stay connected with Vericast for the latest insights and solutions to navigate economic challenges.
