Insight of the Day: Share of US Consumers Living Paycheck to Paycheck Hits Two-Year High

Five Key Factors Shaping the Shopping Habits of Financially Struggling Consumers:

Findings:

1. Back to Basics: 72% of income spent on necessities, limiting discretionary spending.

2. Playing it Safe: Reliance on cash and debit due to limited credit access.

3. The Physical Store: Preference for in-person shopping for price comparison and cash payments.

4. The Digital Boost: High digital engagement for deal-seeking and price comparison.

5. The Superstore Advantage: Inclination towards discount retailers like Walmart for affordability.

Key Takeaway:

Financially struggling consumers prioritize value and necessity, relying on physical stores, cash payments, and digital tools to make informed decisions and stretch their budgets.

Trend:

The rise of financially constrained consumers highlights the growing economic disparities and the need for retailers to adapt to diverse financial realities.

Consumers Addressed:

Individuals earning $50,000 or less annually, living paycheck to paycheck, and struggling to pay bills.

Conclusions:

• Retailers need to understand the unique needs and preferences of financially struggling consumers.

• Offering value-driven products, promotions, and convenient payment options is crucial for attracting and retaining this customer segment.

• Embracing digital tools and enhancing the in-store experience can cater to their specific shopping behaviors.

Implications for Brands:

• Focus on Value: Offer competitive pricing, discounts, and loyalty programs.

• Optimize Omnichannel Experience: Provide seamless integration between online and offline channels.

• Enhance Digital Tools: Develop apps and online platforms for deal-seeking and price comparison.

• Offer Flexible Payment Options: Accept cash and debit cards alongside credit cards.

• Partner with Discount Retailers: Collaborate with stores like Walmart to reach this consumer segment.

Implications for Society:

• The growing number of financially struggling consumers reflects the need for policies and programs to address income inequality and financial insecurity.

• Retailers have a role to play in supporting these consumers by providing affordable and accessible products and services.

• The trend highlights the importance of financial literacy and responsible spending habits for long-term financial well-being.

Source: https://www.pymnts.com/news/retail/2024/5-key-factors-impacting-how-americas-most-cash-strapped-consumers-shop/