Are your accounts clued into the new consumer mindset? Even before the talk of tariffs took over the news cycle, consumers were pulling back. As economic uncertainty continues, consumers will be focused on spending less money.

What is the Consumer New Reality?

A new survey by Rakuten and The Harris Poll indicates that marketers may not be up to date on the changed consumer mindset. This change is a direct result of the stress consumers are feeling in terms of household finances.

Here’s what they’ve told researchers:

• They can’t pay their household bills: 19%
• They can’t afford food and gas: 17%
• They can’t afford daily expenses: 28%
• They plan to shop less: 28%

What Actions Are Consumers Taking?

The cost of food continues to stress the consumer budget. A solid majority of consumers, 77%, believe inflation will limit their grocery spending for the rest of the year. To make ends meet, 39% will buy less expensive options. In some cases, 13% no longer buy the product. For examples, consumers have cut back on purchasing eggs which have increased dramatically in price.

Another report, Santander’s Path to Prosperity, confirms that 53% of U.S. adults have cut back on spending. They are also look for creative ways to balance their operating budgets. Around 33% are using savings to make ends meet. At the same time, 27% are not adding as much to their savings accounts as they were before.

For 37% of middle-​income consumers, drastic measures have been necessary. They are working a side job to bring in enough money.

What is the Retailer Mindset?

Are retailers aware of what’s happening with consumers? The Rakuten survey uncovered a huge disconnect between shoppers’ intentions for the year and retailers’ understanding of the new normal. Only 5% of retailers believe consumers will trade down.

But retailers recognize the increasingly competitive operating environment. And they are changing their marketing strategy. First, around 2/​3s are boosting their ad spend when compared to last year. Second, marketers are selectively shifting their ad spend.

Revised Marketing Strategy

Marketers say they’ll be using more of the following media formats:

• Social media 83%
• Search 65%
• Display 50%

Marketers also report that they remain focused on brand advertising. But around 30% will shift some of their budgets from upper to lower funnel selling activity. This emphasis on performance marketing signals a growing awareness of the changing consumer mindset.

New Product Strategy

In addition, around 90% of business respondents to a survey late in 2024 noted their intention to invest more in their private label product. These products usually come at a lower price point. When marketers promote these options, they have a chance to build brand loyalty.

Updated Pricing Strategy

Branded product producers aren’t standing still. Some of these companies are beginning to signal their understanding of the new consumer mindset. Nestle, for example, recently announced a price cut of 1% for some of its favorite products.

How to Reach Consumers

You can help your accounts target consumers with the right ad campaigns by selling them media formats that make an impact. To do that, you need a subscription to AdMall.

Did you know that 18% of U.S. adults are considered Store Brand Buyers in AdMall's AudienceSCAN research. Over 30% of these consumers have been influenced by TV advertising in the past 30 days. This figure applies to both linear and streaming TV ads. However, these consumers are also 30% more likely than all other U.S. adults to take action after receiving direct mail coupons.

Remind your accounts that plenty of consumers will be pulling back on their daily and weekly shopping trips. They’ll be looking for the value in their purchases. In the forthcoming AudienceSCAN 2025 research, around 16% of consumers indicate they will splurge on items for special occasions.

Your clients need to be top of mind when these consumers are ready to open their wallets. Let your accounts know that Special Occasion Splurgers are 14% more likely than other U.S. adults to be influenced by ads on social media.

Summary

The economy is changing quickly. Until the path forward appears steadier, the cautious consumer mindset will remind fixed in place. With the right ad campaigns, your accounts can protect market share and prevent a sales slide.