Consumer Trends March 2018

[Pages:22]Consumer Connect Q4 2018

CONSUMER CONFIDENCE REFLECTED IN E-COMMERCE GROWTH

Joan Driggs Vice President Content and Thought Leadership

February 2019

Consumer Connect Q4 2018

IRI's Consumer Connect Survey is published after each calendar quarter and reflects shoppers' reported economic health, as well as behaviors and attitudes toward purchasing and utilizing CPG and health care products.

For the most recent quarter, October ? December 2018, we focus on respondents' e-commerce attitudes and behaviors. To review past Consumer Connect reports, click here.

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Executive Summary

Consumer confidence has remained favorable over the past several years. Still, 30 percent of respondents to IRI's Consumer Connect Survey report they struggle financially.

Notably, Gen Xers, followed by Millennials, are the most likely to report they struggle to afford needed groceries. But these generations are increasingly working their way out of debt and into greater financial stability. Some 55 percent of total Consumer Connect Survey respondents report their households are in good financial shape, up 4 percentage points from Q3 2018.

While 2019 is off to a rocky start, with a partial government shutdown and trade challenges attributed to tariffs, consumers at the close of 2018 were buoyed by their strong household financial health and were spending accordingly.

Hand-in-hand with consumer confidence is the growing and evolving e-commerce channel. Consumers are increasingly comfortable with online purchasing and retailers of all stripes are investing in their online offerings.

Non-food items, particularly personal care and home care products, are tops in online purchases. IRI E-Market Insights reports that vitamins, pet food and supplies, and skin care products are the top selling items.

Pure-play retailers garner well more than half of all online CPG purchases, but traditional brick-and-mortar retailers continue to invest and win share of the e-commerce pie.

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Consumer Sentiment Is Up Nearly One Point Versus Q4 2017

However It Inched Up Marginally Since Q3 2017

100.0% 100.0%

99.5%

99.0%

98.5%

98.0% 97.5% 97.0%

97.5% 97.0%

96.5%

0.0% Q1 2016

Q2 2016

Q3 2016

Consumer Sentiment Index Total U.S.

99.0%

98.6%

99.5%

97.3%

96.4%

Q4 2016

Q1 2017

96.8%

Q2 2017

Q3 2017

Q4 2017

Q1 2018

In Q4 2018, consumer sentiment increased as incomes rose and unemployment declined.

98.7%

98.2%

97.6%

Q2 2018

Q3 2018

Q4 2018

Average = 100 Source: Consumer ConnectTM, Q4 2018

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Fifty-five Percent of Consumers Report Their Financial Situation Is Healthy

Especially Seniors and High-income Households

Households Having Good Financial Health % of Households, Total U.S.

Q4 2018 Q3 2018 Q2 2018 Q1 2018

55% 51%

55% 56%

Income

> $100K $55K-$99.9K $35K-$54.9K

< $35K

Millennials Gen X

30%

Generation

Q4 2017

53%

Boomers Seniors

82% 64% 55%

53% 51% 52%

67%

Source: IRI Consumer ConnectTM, Q4 2018

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Among Generations, Gen X Report Having the Most Difficulty Affording Needed Groceries, Followed by Millennials

30%

of consumers

have difficulty affording needed groceries

34%

of Millennials

36%

of Generation Xers

32%

of Boomers

20%

of Seniors

Source: Consumer ConnectTM, Q4 2018

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Online Shopping to Save Money Is Increasingly Popular Among Millennials and Gen X Consumers

Online Shopping Value Perceptions by Generation

Online order/in-store pick-up (click-and-collect) allows me

convenience without the added shipping fee

Buying online allows me to find lower-priced food and beverage options

Buying online allows me to find lower-priced

OTC medication options

Buying online allows me to find lower-priced

beauty/personal care product options

Buying online allows me to find lower-priced

home care options

24%

38% 38%

49% 48%

12%

20%

21% 20%

31%

23% 28%

23% 23%

18%

14%

29% 27%

35%

45%

19%

30% 27%

36%

43%

Total U.S. Millennials

Gen X Boomers

Seniors

% of respondents, Top 2 Box Summary Source: IRI Consumer ConnectTM, Q4 2018

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In Addition to Convenience, Free and Fast Shipping Are Also Main Drivers for Online Shopping

Capabilities That Drive Channel Selection

Online purchasing with

free delivery

Online purchasing with

fast delivery

Online purchasing with

in-store pick up

Online purchasing of freshly

prepared items

Subscription services for frequently purchased

grocery items

23%

32%

43% 47%

45%

57% 56%

68% 69%

56% 61%

40% 39%

52% 50%

30%

16%

28%

20% 26%

17% 11%

33%

42% 42%

Total U.S. Millennials

Gen X Boomers

Seniors

% of respondents, Very/Important Summary Source: IRI Consumer ConnectTM, Q4 2018

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