Value-Seekers Span All Generations, Income Levels
Value is top of mind for consumers, as a growing number of shoppers are seeking ways to stay within their budgets and get the biggest bang for their buck, according to a new report from Deloitte.
In its report, "The Value-Seeking Consumer: Competitors Could Lose Out to Brands Offering More Than Low Prices," the research firm examined the idea of value-seeking from the consumer’s perspective and found that brands providing more value for the price (MVPs) appear to be winning with shoppers.
The report also noted that the focus on value is about more than getting the lowest price, with factors such as quality, trust, and experience playing a bigger role in the purchase decisions for many consumers.
With 40% of shoppers surveyed identifying themselves as value seekers, nearly two-thirds of this group are cooking more at home, 53% are purchasing cheaper ingredients at the grocery store, and 59% are switching to private label products.
"Consumers are more discerning than ever, weighing the value they receive with their purchases,” said Mike Daher, vice chair and U.S. consumer industry leader with Deloitte. “And while low-income earners may look for value out of necessity, higher-income households increasingly put value at the top of their shopping lists. As economic uncertainty lingers, consumers across demographics actively seek brands that deliver value, whether through quality, trust, friendly attitudes or a combination thereof.”
Notably, all generations are engaging in value-seeking behaviors. Nearly half (49%) of Generation X and 43% of baby boomers are looking for greater value from the products they purchase, with 40% of millennials and 44% of Generation Z doing the same.
Value was also a much-used buzzword in the recent "The Power of Private Brands" report from FMI — The Food Industry Association. Consumers surveyed used value along with words such as quality, brand, good, and great when asked to describe private label products.
“Price is always going to be part of the conversation,” Tom Cosgrove, director of industry relations with FMI, previously told Store Brands. “What’s great is that [price] is only part of the conversation. [Consumers] are focused on value and taste, and these products are items that people are proud to purchase and have on their table.”
In the Deloitte survey, nearly 4 in 10 respondents were from lower-income, middle-aged households that are looking for value out of necessity. But the report also found that higher-income earners — about 23% of survey respondents who are earning $200,000 or more — are also on the hunt for products that offer good value. Additionally, nearly 3 in 10 consumers surveyed who are value seekers are young families with six-figure median incomes.
Consumers identified as value-seekers said they intend to spend 40% to 50% less on discretionary categories such as personal care, household goods, home furnishings, and entertainment, while allocating a greater percentage of their budget to essentials such as housing and transportation.
The challenge facing retailers that are looking to meet the needs of value-based consumers is defining how shoppers define value.
FMI’s Cosgrove noted that value means different things to different people. For example, a recent college graduate may view value as offering the best price, as opposed to someone with a family that will include experience in how they define value.
“When looking at key purchase drivers for food, they include health, entertainment, enjoyment, and convenience,” he said. “While the word value is not included, I would argue ‘value’ is all of the four things I just mentioned, and different people would rank their importance differently in their own value equation.”
