The 2023 Report from Horizon Media Reveals the Impacts of Inflation on the American Dream & How Brands Can Help Americans Feel Hopeful
NEW YORK, March 22, 2023 /PRNewswire/ — With the U.S. facing its highest inflationary period in over 40 years, Horizon Media’s WHY Group released its second inflation report, “Inflation Nation: One Year Later,” focused on analyzing the current perception of inflation and to better understand the impact on spending habits and the status of the American Dream. The report surveyed nearly 1,000 adults across the country to determine what brands can do to engage and build customer relationships while helping consumers navigate today’s rising prices.
For the survey, the WHY Group segmented the population into groups based on attitudes around inflation, financial security, and life satisfaction, including the ability to get what’s most desired in life. Three patterns emerged showing a high degree of variability in response to inflation: The Resilient, those who stick to spending as usual; The Anxious, participants that watch investments closely to prevent bottoming out; and The Vulnerable, the individuals who pinch pennies and reshuffle priorities to make room where needed.
“As a company that is heavily invested in understanding public perception and behavioral trends and developing solutions to address them most effectively, we conducted the 2023 Inflation Nation Report — our second national survey analyzing sentiments on inflation today,” said Maxine Gurevich, SVP of Cultural Intelligence at Horizon Media. “Findings from the report indicate the #1 priority for companies should be having full transparency about the factors contributing to any price increases, whether that’s supply chain issues, cost of goods, etc. That is a fundamental step. After that, brands can benefit from generating more awareness for causes and corporate social responsibility they embrace as people want to align with brands that authentically care.”
Key survey findings revealed that:
- On par with Horizon Media’s 2022 findings, roughly 9 in 10 Americans are aware of current inflation, and more than two-thirds are concerned or very concerned.
- Among those surveyed, perceived root causes of inflation fall along party lines and include: supply chain, Russian invasion of Ukraine, corporate greed, labor shortages, government spending, pent-up demand from the pandemic, and global warming/environment issues.
- Nearly 7 in 10 of The Vulnerable group say they are very concerned about inflation, a 10% increase from 2022. Additionally, over 50% now say they are worse off than their parents.
- Overall, ad-supported subscriptions have had a 7-point increase as people look to save money while getting more entertainment choices.
- Financially stable and less likely to change their spending habits, 43% of The Resilient are only “somewhat concerned” about inflation and care most about brands stepping in to resolve societal issues.
- 59% of The Anxious, who are highly price sensitive, are cutting costs by cutting back on things they like to do (up from 55% in 2022) in part to feel more in control of what they see as their dwindling nest egg.
- The youngest and most financially unstable group, 25% of The Vulnerable have more credit card debt in 2023.
The Impact of Inflation
While 2023 inflation rates have dropped by approximately 30 percent (from 9.1% in 2022 to 6.4%), it’s still roughly 2.5x more than pre-Covid levels of 2.5%.
Inflation poses a threat to all Americans, even among the financially secure. With rising inflation rates, saving has stagnated, and people are now spending the money they saved during the COVID pandemic. As savings are running dry, people are spending more on necessities and steering away from simple pleasures like dining out and lifestyle expenditures.
The report found that across all groups, inflation concerns are significant. While some groups may be in a better position than others to deal with the extreme inflation cycle, almost all Americans currently consider inflation their main concern.
Additionally, inflation is leaving many, such as The Vulnerable, feeling further and further away from achieving The American Dream. In 2023, 52% of The Vulnerable believe they are worse off than their parents.
The Role of Brands
With all of these doubts, it’s important for brands to understand the impacts and show people they understand them as well. According to the 2023 Inflation Nation Report, brands focus on strengthening consumer-to-brand trust with price transparency, especially for frequently purchased items.
While brands will need to continuously “chase” consumers to earn their loyalty and willingness to spend a few bucks more on items, the report revealed that people are willing to spend money on brands that help them do good and feel good with purchases.
“While the overall inflation rate is lowering, there have been evident shifts in people’s financial outlooks and spending habits because of this prolonged inflationary period,” Gurevich added. “It is clear that the impact of inflation varies among core sectors of people, which is why it is crucial for brands to think about how they can help Americans feel hopeful and how to retain loyalty with their customers as household budgets are adjusted.”
For more information about the 2023 Inflation Nation Report, please click here.
About Horizon Media
Horizon Media, Inc, the largest U.S. media agency according to AdAge Data Center 2022, delivers data-driven business outcomes for some of the most innovative and ambitious brands. Founded in 1989, headquartered in New York, and with offices in Edmonton, Los Angeles and Toronto, the company employs 2,400 people and has media investments of more than $8.5 billion. Horizon Media’s fundamental belief is that business is personal, which drives its approach to connecting brands with their customers and engaging with its own employees resulting in industry-leading workplace satisfaction levels (Glassdoor). The company is consistently recognized by independent media outlets for its client excellence and has earned several “Best Workplaces” awards reflecting its commitment to DEI and the life and well-being of everyone at Horizon Media.
SOURCE Horizon Media
