According to EPI’s The State of Working America, 12th Edition the wage and benefit growth of the vast majority, including white-collar and blue-collar workers and those with and without a college degree, has stagnated, as the fruits of overall growth have accrued disproportionately to the richest households. According to every major data source, the vast majority of U.S. workers—including white-collar and blue-collar workers and those with and without a college degree—have endured more than a decade of wage stagnation. Wage growth has significantly underperformed productivity growth regardless of occupation, gender, race/ethnicity, or education level. This is pretty significant for CPG markers.
During the Great Recession and its aftermath (i.e., between 2007 and 2012), wages fell for the entire bottom 70 percent of the wage distribution, despite productivity growth of 7.7 percent. Weak wage growth predates the Great Recession. Between 2000 and 2007, the median worker saw wage growth of just 2.6 percent, despite productivity growth of 16.0 percent, while the 20th percentile worker saw wage growth of just 1.0 percent and the 80th percentile worker saw wage growth of just 4.6 percent.
What are the implications for consumer products marketers ?
1ne: Product unique selling propositions have to resonate with consumers on a level that leads them to take action. Sure your product may have a claim that shows it’s superior to other brands but are consumers willing to pay for 25% cleaner clothes or dishes ?
2wo: Store brands are moving in in your market share especially store brands that are marketed as upscale at reduced prices. Consumers like thinking that they are smarter than marketers and substituting store brands gives them a sense of financial empowerment.
3hree: Consumers are still very skeptical of advertisers claims. A survey of 500 American consumers by Lab42 reveals a healthy dose of skepticism about the accuracy of claims made in ads. The study, which examined broad attitudes towards advertising in all its forms (including print, TV, internet, and social media), found just 3% of respondents believing that claims made in ads are “very accurate,” with far more (19%) believing them to be “very exaggerated.” All told, the proportion finding ads to be at least somewhat exaggerated far outweighed the proportion believing them to be at least somewhat accurate (76% vs. 24%).
4our: I’m going to take my anger out on your brand ! When consumers read that companies are making record profits while their wages decline due to higher heal insurance premiums they are likely to get angry and if your brand disappoints them they are going to vent their anger on your social media page. What are you going to do to turn these people into brand advocates ?
5ive: Yes I want a new TV but I’m going to wait until I get the best price and even then I’m going to shop around. Saving money is fashionable.
Marketers too often conduct research around their products but forget to get inside the head of consumers who have a wealth of choices when it comes to products. Sure a Nissan Altima is a nice looking car but if I can get a Ford Fusion at a better deal I’ll go with the Ford because saving money is more important most of the time.