The Empathica Consumer Insights Panel survey reveals consumer pessimism is increasing, with only 9% of North Americans saying it’s less difficult financially than it was six months ago; the majority are still finding it hard to cope in today’s economy.
Toronto, Ontario, Canada – June 27, 2011 – Empathica Inc., a leading provider of Customer Experience Management (CEM) solutions to some of the world’s most respected brands, announced that its Consumer Insights Panel survey of more than 16,000 consumers reveals that the majority (56%) are finding it more financially difficult than six months ago. Just 9% say it’s less difficult, and another 35% think their situation has remained the same.
Looking ahead, consumers aren’t optimistic about the potential for their situation to get better either. Not only are consumers reporting a worse situation now, but nearly half also think it will continue to stay that way for the next six months. According to survey results, 48% of consumers think their finances will stay the same, with 16% believing their situation will get worse for the rest of 2011.
“Consumers have been hit so hard in the last two years that any feeling of slowed growth immediately hurts optimism,” said Gary Edwards, Chief Customer Officer at Empathica. “Consumer brands should be prepared for the inevitable impact of increased consumer fear and begin planning today for strategies to appeal to these consumers. Delivering an excellent customer experience should be one of these priorities to help companies differentiate in a challenging market.”
As expected, that increased pessimism has led directly to spending reductions in households. Sixty-one percent of survey respondents indicated that they are spending less today than they were a year ago. Consumers said that the leading causes were unemployment, having to pay more for basic housing and utility costs — and consequently less in other sectors — and concern about taking on more debt.
“It’s no surprise that continued unemployment and the rising cost of basic needs would lead to spending cuts, but concern about more debt is particularly concerning,” noted Edwards. “Consumers have been able to fight through the downturn by taking on additional debt, but eventually there had to be a breaking point. We may now be seeing that realized.”
Spending by Region
In the United States, spending cuts were very similar across regions. Those in the West and South reported the highest reduction in spend (64% and 63%, respectively), followed by the Midwest (62%) and Northeast (61%). Of all regions, the West had the highest percentage of consumers reporting a “significant” reduction in spend: one in four.
Canadians, who have been somewhat insulated from the economic downturn, are nonetheless also cautious. The survey found the greatest percentage of Canadians with reduced budgets resided in Ontario and British Columbia. Fifty-one percent of Ontario residents and 50% of British Columbia residents reported spending less today as compared to last year. Manitoba/Saskatchewan (31%) ranked lowest on that list. Alberta (40%), Quebec (48%) and the Atlantic region (42%) fell in the middle range of responses by province.
“Once you understand the mindset of consumers, as a brand you need to react,” said Edwards. “In the current environment it often means delivering a message that resonates with the times: keeping within budget, finding the right time to “treat” youself to something extra, being a savvy consumer who finds the best deals; these kind of messages resonate with the consumer. These messages, combined with an ability to offer consumers a reprieve from their daily economic stresses and difficulties are where retailers and restauranteurs can differentiate and appeal to consumers. ”
For full results, visit www.empathica.com/insights/.
About the Empathica Consumer Insights Panel:
The Empathica Consumer Insights serves as an authoritative voice on consumer based economic indicators; the retail, financial services and restaurant industries; consumer shopping intentions and customer satisfaction as reported by thousands of consumers in the U.S. and Canada. Results from Empathica’s Consumer Insights, led by Dr. Gary Edwards and Empathica’s Consumer Insights’ team, are published several times a year. The results are based on outbound Internet surveys with Empathica’s growing Insights Panel, derived from more than 30 million consumer surveys per year. Results have been weighted to reflect latest Census distributions in the U.S. and in Canada, including Region, Gender, Age and Income.
Aforementioned data is reported by the Empathica Consumer Insights Panel – Wave 1 2011, Issue 1.
For more information, visit www.empathica.com/insights/.