Findings: Many US consumers are cutting back on purchasing snacks, such as Frito-Lay’s Ruffles, as high prices push them to seek better value. Economic anxiety is high, with 29% of US respondents reporting that they cannot currently afford snacks, and 35% saying they can only just afford them but are looking to reduce spending.
Key Takeaway: Brands must acknowledge that a significant portion of consumers in developed economies are financially struggling. Companies need to offer a range of products at different price points to maintain their customer base, instead of simply raising prices.
Trend: The primary trend is a cost-of-living crisis affecting consumers in developed economies, such as the US, Canada, Japan, and the UK. This trend is leading to a re-evaluation of spending habits, with consumers opting for value and prioritizing brands that provide better perceived worth.
Consumer Motivation: Consumers are motivated by the need for better value and are increasingly making decisions based on affordability. While they are financially challenged, many are still willing to pay more for brands that they believe offer better quality, reliability, or emotional satisfaction.
What’s Driving the Trend: This trend is driven by several factors, including rising food prices, high housing costs, healthcare expenses, and inflation. Economic pressures are causing consumers to reassess their purchasing behavior and look for cost-effective solutions.
Who the Article Refers To: The article mentions:
US consumers, especially those financially struggling with the cost-of-living.
Brands like Frito-Lay (PepsiCo), Pampers, Apple iPhone, Hilton, and Samsung, which manage to maintain market share due to perceived value despite financial challenges among consumers.
Consumer Product or Service: The products referred to are primarily snacks, with a broader focus on consumer goods such as electronics and home appliances. These products span a range of price points, but many consumers are seeking affordable options or cutting back on purchases altogether.
Conclusions: The cost-of-living crisis is reshaping consumer behavior, forcing brands to rethink pricing strategies. Consumers are increasingly valuing products that offer reliability and emotional value, even if they are more expensive, but brands must also provide lower-priced alternatives to retain price-sensitive customers.
Implications for Brands: Brands need to develop pricing strategies that cater to a diverse consumer base, including those under financial strain. Offering a portfolio of products with both premium and affordable options can help brands retain loyalty across economic groups without alienating consumers.
Implications for Society: The rising cost of living is creating financial stress in developed countries, pushing consumers to prioritize basic needs and cut back on discretionary spending. This may widen economic disparities and alter long-term consumption patterns, especially for luxury or non-essential products.
Big Trend Implied: A major trend implied is the importance of perceived value in consumer purchasing decisions. In a cost-sensitive environment, brands with strong pricing power—those seen as worth the price—will dominate, while those offering only higher prices without added value may lose market share.
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