DENVER—September 30, 2014—A new study from leading qualitative research firm iModerate provides background and depth behind the lower September Consumer Confidence Index, released this morning by the Conference Board. This month’s number, 86—down from 93.4 in August—, depicts a decrease in confidence for the first time in four months. iModerate’s findings support this metric, and provide insights into why consumers are all about saving money and putting off major non-essential purchases for the time being.
In its third quarter 2014 Consumer Confidence report, titled Reading between the Numbers: Consumer Confidence from the Consumer’s Point of View, iModerate employed its distinct approach to dig below the metric and gauge true consumer confidence from the consumer’s perspective. iModerate has conducted more than 1,000 in-depth conversations with consumers since the beginning of the year about the national and their local economy, and how their perceptions affect their feelings, decisions, and purchasing behaviors.
iModerate found that consumers are feeling somewhat stable about their personal finances despite some rockiness in the job market. However, their sentiment does not translate into willingness to make purchases. In the wake of the recession, consumers have changed their habits, settling into a “new normal” of prioritizing safety and stability over spending and indulgence. While they’re thinking about and discussing making big purchases such as vacations and home remodels, they’re not ready to sign on the dotted line; they prefer to build a financial cushion in case the economic tides were to turn again rather than experience the latest and greatest gadget or exotic escape. Instead, they continue to clip coupons, research purchases more carefully and pay off their debts.
“Consumers have developed a new set of skills and habits to navigate the current economy,” said Adam Rossow, Partner at iModerate. “As these behaviors become engrained, they’re not looking to revert to old pre-recession habits, and they’re expecting brands to evolve with them. They’ve begrudgingly accepted the increasing prices of staples such as milk and gas, but are unwilling to pay full price on anything that’s not seen as necessary. What we’re seeing is a new American consumer, one who is a smart shopper and saver, and who gets great satisfaction from nailing down a good deal.”
Other relevant findings include:
- Couponing remains a staple: Those with an annual household income of $100,000 or higher are more than twice as likely to use coupons than those making $25,000 or less.
- Big vacations are still a dream: Over one-fifth of respondents are contemplating vacations, but most are a year away from actually purchasing and going on a trip
- Similarly, respondents indicated they are still putting off major home remodels, preferring to cushion their bank accounts in case of emergency.
The study includes recommendations for big brands and small businesses alike. Looking forward, businesses and brands need to appeal to the emotional side of shopping for this new American consumer. Those willing to provide consumers support with offerings such as money-back guarantees, reassurance with return policies, and inspiration through education on financing to make large purchases possible will break through the noise and see an increase in sales.
Reading between the Numbers: Consumer Confidence from the Consumer’s Point of View was a qualitative study consisting of conversations with 325 consumers between July and September, 2014. This study is part of a larger qualitative tracker in which iModerate has engaged American consumers in more than 1,000 conversations spanning over 500 hours since January of 2014.
The report is available here as a free download from the iModerate website.
iModerate bridges the communication gap between companies and consumers through individual conversations, yielding decision-driving context that increases revenue, profitability and ROI. Founded in 2004 and headquartered in Denver, CO, iModerate is known for its expertise in the American Consumer and for pioneering and championing the online one-on-one. With a proprietary cognitive framework, and 10 years of experience rooted in how individuals think and behave, iModerate helps organizations in a wide variety of sectors get past their data sets, establish customer intimacy and obtain real insight—the kind that tells you why things are happening and what action to take. For more information, please visit www.imoderate.com.