What's Happening?
A recent study conducted by SKIM highlights a shift in consumer spending habits, driven by economic and social trends. As inflation rises and economic uncertainty looms, consumers are increasingly prioritizing price over other factors. The study found that 69% of global consumers now consider price more important than last year. This trend is particularly evident in the food and household care segments, where 71% of consumers reported increased pricing sensitivity. However, in the personal care segment, factors such as recommendations, product design, and brand reputation are more influential than price. The study suggests that brands should leverage ratings and reviews to emphasize value beyond price, especially in segments where quality is perceived as more important.
Why It's Important?
The findings of the SKIM study have significant implications for retailers and brands aiming to capture the attention of younger consumers. Millennials and Gen Z are increasingly valuing well-known and premium brands, with 65% and 68% respectively seeing these brands as more important. This shift presents an opportunity for brands to build lasting connections with these demographics by crafting targeted messages that resonate with their preferences. Additionally, promotions and discounts are identified as effective strategies to attract new customers to quality products, with 61% of Gen Z and 66% of Millennials indicating increased importance of promotional considerations in their purchasing decisions.
What's Next?
Brands looking to capitalize on these trends should consider developing smart promotional strategies that align with generational preferences and brand identity. By doing so, they can revitalize their consumer base and secure their future with new generations of shoppers. The study suggests that leveraging promotions could be a crucial tactic for retailers to introduce quality products to younger consumers, encouraging repeat purchases and fostering brand loyalty.
Beyond the Headlines
The study also touches on the broader implications of consumer behavior in the personal care segment, where the importance of quality has grown due to limited access to public healthcare. This shift elevates personal care beyond its traditional luxury spending category, highlighting the need for brands to emphasize unique points of difference and value beyond price.
