| When Puget Sound area residents were questioned in October about the state of the region’s economy and their own personal financial condition, their responses indicate a significant drop in optimism from last spring when it registered a four-year high. Growing consumer anxiety could be worrisome for many businesses as the holiday season gets under way, said researcher Don Morgan.
According to the latest results of a semi-annual Consumer Confidence survey conducted by GMA Research, the GMA Consumer Confidence Index has dropped 15 percent in just six months.
Don Morgan, GMA senior partner who manages the poll, attributes the decline to a combination of factors. “This most recent index is indicative of growing consumer unrest with the war in Iraq and reports of a slowing housing market,” he theorized. The impact of the barrage of political advertising also created a lot of uncertainty,” he noted.
“This drop in confidence may be an early warning signal regarding the type of holiday shopping season we are rolling into over the next couple months,” Morgan believes. Retailers will need to be on alert and be ready with special promotions and mark-downs to shore up sluggish sales if this drop in consumer confidence does translate to less shopping and belt tightening in the shopping malls and online purchasing, he suggests. “It may also translate into less traffic in restaurants and other hospitality sectors which normally are very busy during this season,” he commented.
It appears women are less optimistic than men, Morgan reported. “Women are more pessimistic than men when it comes to their feelings about the region’s economy, whether or not things are getting better, or their own financial situation,” he explained. Married consumers are also less pessimistic compared to singles.
The Consumer Confidence Index is made up of three survey questions:
- Would you describe the state of the region’s economy these days as excellent, good, just okay, fair or poor?
- Compared to six months ago, do you feel the region’s economy is getting better, staying the same or getting worse?
- Would you describe the state of your own personal finances as excellent, good, just okay, fair or poor?
Savvy businesses need to be attuned to changes in consumer confidence and prepared to adapt their marketing programs as moods fluctuate, Morgan advises. During times of turmoil and consumer unrest those advertisers who are true to their brand positioning and deliver on their brand promise with stellar customer service and exceed customer expectations will be the ones who do the best. Delivering value at all levels is of critical importance whether selling big ticket items like automobiles, appliances or big screen televisions or even a quick serve lunch. |
