The Value-seeking consumer was once overlooked and under-served — but NO MORE! They now represent a whooping 43% of all U.S. households, that’s according to a recent study on consumption by Ernst & Young. Considered households that earn under $50,000 per year (and those hit most severely by the virus) it is now the fastest growing consumer group in both size and market influence. VALUE has now become the main consumption driver and that includes many middle and even upper-middle class households.
This trend is facing all businesses and they need to address it NOW! The migration to becoming a value-conscious consumer is impacting all demographic areas and will continue to be driven by the pandemic. Here’s why…
- Although many value-conscious consumers are not early adopters of new technology, they are not laggards either. They insist on receiving innovation in the products they purchase. Budget-conscious does not equate to low expectations – QUALITY counts.
- The value-seeking consumer wants to be able to add or drop services as their household finances change. They dislike cancellation charges and they highly value not being tied to product or service contracts.
- While it may be tempting for businesses to offer VC consumers products at low-cost and with lower quality options that would be a MISTAKE. These consumers don’t want the cheapest they want the BEST VALUE! The Ernst study indicated that 49% of VC consumers want quality and functionality first – not stripped down versions.
- They look for strong value propositions BEFORE purchasing.
- VC consumers are driving new consumption and adoption trends that are going mainstream. The Ernst survey indicated that a full 33% of all households (at all income levels) said they were striving to pay less for products/services during the COVID crisis.
- Businesses should look toward offering customized products with adjustable payment schedules that can adapt to changing household cash flows and lifestyles.
There is no doubt that businesses, at all levels, will be challenged to meet the requirements and needs of the growing value-conscious consumer/customer. Those that do however have a unique opportunity to increase their market-reach, build brand equity, and accelerate revenues.