Empathica, a global provider of Customer Experience Management (CEM) solutions to multiunit enterprises in retail, foodservices, banking, petro, and hospitality sectors, released the results of its most recent Consumer Insights Panel.
Despite 59 percent of consumers finding conditions more difficult than six months ago, Americans were nonetheless far more optimistic (33 percent) than pessimistic (14 percent) about their near-term financial future six months down the road.
Tracking consumers' financial challenges, a slight decrease is evident from January 2012. Consumer hardship peaked in December 2010, when 65 percent of consumers reported finding their financial situation more difficult than the previous six months.
"Despite a third of consumers who are optimistic about their personal financial situation, many businesses will continue to feel the impact of cautious consumer spending," says Dr. Gary Edwards, chief customer officer at Empathica. "Brands should appeal to consumers' sense of optimism and sell them an experience that builds their hope.
"While there is an ongoing temptation to focus solely on price and promotions to drive purchase behavior in a tough economy, there remains an opportunity to stand out from the competition by creating a unique and differentiating customer experience," he adds.
While there are some pockets of optimism among U.S. consumers, the economy and debt are still top of mind for the majority of people. Four out of five consumers indicate that the economy is one of their top three concerns, followed by 66 percent of consumers who said the same with regard to debt.
As a result, consumers remain cautious on discretionary spending, with more than three in five U.S. consumers cutting costs compared to one year ago.
When looking at the next three months, consumers expect to spend more on essentials like gas (35 percent), pharmacy (22 percent), and grocery (19 percent). By contrast, most consumers intend to reduce spending in the short term on discretionary items.
The top 15 segments where U.S. consumers intend to cut spending in the next three months include: electronics (62 percent), furnishings (62 percent), bars (58 percent), fine dining (58 percent), airlines (56 percent), hotels (55 percent), department stores (52 percent), clothing stores (51 percent), convenience stores (47 percent), hardware (46 percent), quick service (38 percent), casual dining (36 percent), pharmacy (22 percent), supermarket/grocery (19 percent), and gas stations (13 percent).
"Pessimism is at its lowest point in almost two years," Edwards says. "We could be at a point where consumers are just accepting of their situation, and regardless still have to spend money on essentials. As we have seen, consumers are still feeling the pinch financially, with the hope that their situations will be better six months from now."