Consumers Spending Confidence Up a Tick, but Loyalty Still Key
Optimove surveys revealed consumer spending increased slightly in March despite mixed job market signals, interest rate rises, and persistent inflation. Our advice for marketers, however? Don’t take your eyes off the loyalty, relevancy, and personalization balls
Trend results of three recent Optimove surveys, each of more than 400 US consumers, show that consumers’ planned shopping budgets increased slightly in March.
In February, 14% of respondents expected to budget more for shopping in 2023. The figure rose to 22% in March. This compares to results in August 2022, when 19% of respondents expected to budget more for shopping on holiday at the end of 2022. See the chart below:
In addition, respondents’ confidence in the economy has improved. In February, 21% of survey respondents said they had more confidence in the economy for 2023. The positive feeling rose to 24% in March. The data aligned with consumer confidence reported by The Conference Board, which showed its Consumer Confidence Index® increased slightly in March to 104.2 (1985=100), up from 103.4 in February.
Why does it matter?
Consumer confidence is a crucial element in any economy, shaping the behaviors and attitudes of individuals toward the market.
The impact of this loss can be felt across all sectors, but marketers, in particular, are vulnerable to its effects. When consumer confidence drops, marketers stand to lose a significant amount of business as consumers become hesitant to spend money and try new products. Thus, understanding the importance of consumer confidence and its fragility is essential for marketers seeking to build a successful brand in today’s highly competitive market.
If ever was a time when brands needed to pay close attention to consumer confidence shifts, it’s now. With growing economic uncertainty, rapid global events, and conflicting signs and messages, consumer confidence is difficult to keep tabs on.
Marketers should note that Consumer confidence is highly susceptible to external influences and can be quickly lost in adverse events such as economic downturns, natural disasters, or even negative publicity.
“The strong jobs market continues to boost consumers’ spirits, but they see trouble ahead in categories that affect them most: jobs and incomes,” said Robert Frick, an economist with Navy Federal Credit Union, in a recent interview. “Confidence is now strongly linked to high inflation, and if inflation falls this year as most forecasts suspect, we could see a commensurate rise in confidence.”
“Consumer spending remains resilient in the face of mixed signals between the strong job market, interest rate rises, and inflation,” says Pini Yakuel, CEO and Founder of Optimove. “In this environment, brands must create deeper personal relationships based on customer information and continue fostering trust. Our research consistently shows that 70% or more of consumers unsubscribe from a brand due to a breach of trust.”
Customer-Led Marketing can lead brands to safety
While this slight uptick in confidence is encouraging, it’s not enough for comfort, and overall, consumers are apprehensive about committing their budget in this uncertain environment. But even in the most turbulent economic times, there’s a way out of the storm for brands: existing customers.
A marketing strategy focusing on existing customers is the best way to ensure growth amid economic uncertainty. Customer-Led Marketing, which we preach to anyone who would listen, places your customer at the heart of every marketing action. It nurtures loyalty and trust; builds long-term solid relationships; is relevant and personalized; lets customers lead their journey. If our years of experience helping brands cultivate growth taught us anything, Customer-Led Marketing is a proven way of improving customer lifetime value, sales, and the overall bottom line.
About the surveys
The Optimove 2022 Consumer Holiday Retail Shopping Survey queried 514 U.S. consumers in August 2022. The Optimove 2023 Consumer Marketing Fatigue Survey surveyed 450 U.S. consumers fielded in January 2023. The Optimove 2023 Consumer Summer Shopping Survey surveyed 400 U.S. consumers. Respondents for each survey were ages 18-plus, 49% male/51% female (no respondents were non-binary or declined to answer), and household incomes were $75,000-plus.
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