CHICAGO - "Consumers are back in the game," declared James Russo, vice president of global consumer insights at Nielsen, as he launched into his presentation on consumer behaviors at the NACS State of the Industry Summit that kicked off yesterday and ends today.
"Consumers were on the sidelines in 2008 and early 2009, but now they are back," he stated. Russo explained that although consumer confidence is not quite rosy, it is improving. Consumers have basically accepted where they are these days and are looking ahead to whatï¿½ï¿½s next.
Russo shared how the popular concept of a "new normal" has emerged, characterized by changing consumer behaviors: a 12 percent increase in canning and freezing and a 9 percent increase in cookbook sales. But Russo countered this widespread belief of a new normal with evidence supporting that the consumer might be coming back.
Tracking the "buzz" on thousands of blogs online, Nielsen sees consumers expressing hopes about job growth and economic recovery. Global consumer confidence seems to be on a rebound, and the U.S. consumer has expressed signs of more discretionary spending.
It is this return to discretionary spending that characterizes the future consumer, but this is not the same consumer retailers are used to serving. For these consumers, value is defined by what they want, when they want it ï¿½" but at a price they can afford.
Outlining near-term recommendations for growth, Russo advised:
- Target ongoing consumer need states ï¿½" the essentials, consumable foods, value and deep-rooted trends
- Capitalize on weaknesses in the restaurant market
- Stick to your strengths in the breakfast daypart, afternoon/evening snack occasions ï¿½" all while pursuing dinner opportunities
- Optimize assortment mix
- Take advantage of meteoric growth in social media
Longer term, Russo recommended:
- Focusing on overseas opportunities
- Understanding the demand economy (itï¿½ï¿½s not about more choices, but the right choices)
- Accepting that store brands are here to stay
- Aligning with the aging population
- Leveraging the changing role of women
- Getting connected via social media
The ultimate challenge is to re-think your consumer, since they are indeed "back in the game." Retailers that know what their consumers watch and what they buy will continue to come out on top.