Consumers globally might be reaching their breaking point. According to the latest sentiment data from the Kearney Consumer Institute, which is an internal think tank of global strategy and management consultancy Kearney, consumers in seven out of 12 countries polled experienced a sharp increase in their level of stress as compared to the prior quarter’s report.
In the U.S., the index rose 2.3 percent compared to the first quarter, and was up 4.5 percent in France.
Tumultuous political activity in both countries likely lead to the spike in stress. KCI researchers said the index showed in the U.S. that 48 percent of those polled were pessimistic about the country’s political future, compared to 29 percent being optimistic. The poll, however, was conducted in June, before President Joe Biden retired from the presidential race and backed Vice President Kamala Harris as the Democratic Party candidate — which is also impacting consumer sentiment in the country.
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Katie Thomas, who leads the KCI, said the stress index in the second quarter revealed that “consumers around the world can only be described as ‘resigned,’ with political and economic insecurity manifesting stress differently from country to country.”
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“In the U.S. and some other Western countries, this has led to a perceived loss of agency, with consumers feeling powerless in the face of continued uncertainty,” Thomas said in a statement. “Amid this state of both persisting challenges and politics changing by the day, people feel they have less power over their lives and their future.”
When asked what retailers and brands can do to mitigate the negative impact of the “resigned consumer,” Thomas told WWD that brands can avoid contributing to this sense of resignation “by focusing on straightforward communication and reliability to the consumer.”
“Anything that feels misleading or deceptive — from shrinkflation to ‘false’ discounts during the summer sales to poor service due to software outages — will further aggravate consumers, leading to longer-term risks with loyalty and trust,” Thomas added. “Emphasizing service, the core offering, and points of differentiation are key.”
And although many of the geopolitical and economic factors causing consumer stress are out of the direct control of retailers and brands, Thomas said there are things companies can do to offset the challenges.
“Brands can focus on controlling the controllables — namely, the consistency of experience with the brand and quality of the offering and products,” Thomas told WWD. “Within many categories, there are brands that are doing well while others are struggling. Key winners of late have been winning with their hero products and categories and by understanding the broader lifestyle of their consumers.”
Thomas said when consumers are stressed about their country, it can often translate into stress about their finances. Thomas said KCI research also “found that two-thirds of Americans are living paycheck to paycheck — amid this, they need a source of reliability and consistency.”
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