Every four weeks the media erupts with headlines trumpeting the latest Consumer Confidence numbers. And while we love a good statistic as much as the next person, we kept asking ourselves the same questions: what does that number really say about the economy? At the end of the day, what does it mean in terms of how real people act in real life? To satisfy our curiosity and give our longitudinal qualitative approach a proper test drive, we spent the past 3 months striving to uncover the heartbeat that lurks behind Consumer Confidence. And we will spend future months doing so as well. We’re developing a barometer for why people feel the way they do about the economy, their personal finances and their future, so that we can read between the numbers to understand the consumer on a deeper, more intimate level than what the data and percentages have to say.

1. Reading between the Numbers February-April 2014
Consumer Confidence
from the Consumer’s Point of View

2. Each month, the media erupts with headlines trumpeting the latest Consumer Confidence
numbers. And while we love a good statistic as much as the next person, we keep asking
ourselves the same question: what does that number really say about the economy?
At the end of the day, what does it mean in terms of how real people act in
real life?
That’s right. Real people. It’s easy to forget that the Consumer Confidence Index is
comprised of real people’s perceptions of the economy. For those of us trying to reach
the American consumer on a daily basis, a number is not enough to get the full
picture of what’s happening in the marketplace. By reducing human behavior to a
100-point scale, it dehumanizes the very real people who drive our economy with their
individual decisions to gas up the car, stop at Starbucks, or buy a new refrigerator.
We’re a curious bunch and have never met a question we didn’t try to answer, so we’ve
spent the past 3 months striving to uncover the heartbeat that lurks behind Consumer
Confidence. We’re developing a barometer for why people feel the way they do about
the economy, their personal finances and their future, so that we can read between the
numbers to understand the consumer on a deeper, more intimate level than what the data
and percentages have to say.
Stick with us. Because what’s happening below the
surface tells a different story than what
you see on TV.
Where Did All the People Go?
2

3. Consumers are worse off in today’s economy than they have been in the recent past.
In 1990, median annual household income was $56,000. Today, it’s down to $51,000. Despite
a growing 1%, the vast majority of US families are no better than they were in 1990 – or
they are even worse off.
To reach today’s customer, brands need to either move up or down market to achieve
growth. The overall spending power of the market is decreasing, which means growth
must come from taking share of wallet.
Create a Sense of Belonging
• Premium brands need to consider strategies for moving down market, to grow their
share of lower income and younger segments. This could involve as little as new
marketing strategies, or as much as a new brand under their umbrella.
• Foreconomicalbrands,considerfocusingonbetterquality,functionality,andaesthetic
design to appeal to a larger range of consumers. When their wallets are thin,
consumers will appreciate good value from a less expensive brand; it connects them
to the benefits typically afforded by more affluent shoppers.
Speak to Them Where They Live
• Mass market companies will increase their appeal by partnering with local brands,
or developing specialty products that feel personalized for smaller regions and
communities. Even in product categories as mundane as household cleaners, foods,
beverages, and apparel, this strengthens the bond a brand has with its consumers,
and their community.
• Service provider brands that develop service packages based on local usage patterns
will attract consumers who want to feel like companies are catering to their needs.
• For any brand, marketing with a unique local focus that applies to regions, states,
cities, or smaller communities will go a long way in the eyes of the consumer.
Connecting with Consumers
3
I may not have much to spend, but I am
willing to spend what I have if a brand
connects with me in the right way.

4. Tracking Consumer Concerns
4
FEBRUARY
MARCH
APRIL
Disheartened
People don’t believe that
unemployment numbers tell the true
story of our nation’s employment
conditions. Because of that, they are
wary of the “recovery.”
Cautiously Optimistic
An increase in the minimum wage tells
people that employers are investing in
their employees who will, in turn, be
able to put that money back into the
economy with their purchasing.
Holding Steady
People are still struggling and remain
somewhat fearful. They buy what they
need, but distinguish between wants
and needs and try to spend as little as
possible for the must-haves.
Consumer Confidence:≈1.3 points to 78.1*
• Anticipation of jobs≈
Consumer Confidence:Ω4 points to 82.3*
• Positivity about current situation≈
• Optimism about future situationΩ
Consumer Confidence:≈1.6 points to 82.3*
• Anticipation of drop in personal incomeΩ
Jobs added fall
short of estimate
Average hourly
wage rises: 2.2%
more/hour than
2013
Minimum wage
increase blocked
by Senate
Northeast is
region most
concerned with
unemployment
Low income
consumers are
most concerned
with the issue of
minimum wage
Consumers
tone down their
non-essentials
spending; focus
on necessities
Males 55+ is the
demographic most
concerned with
unemployment
Effects of Obama’s
SOTU remarks on
minimum wage
begin to bubble up
Tax season
reminds
consumers of
their budgets
News and current events From our conversations
*Change represents the difference between the previous month’s revised
number and the current month’s original number

5. February 4th
Dow Jones falls
326 points, worst
one-day plunge
since June 2013
March 29th
Senate votes to
restore federal
jobless benefits
February 18th-23rd
Ukrainian Revolution
February 7th-23rd
Olympics
February 13th
GM recalls begin
March 8th
Malaysian Airlines
Flight goes missing
April 3rd
Heartbleed Bug
discovered
April 15th
Tax Day
April 17th
Obamacare enrollment
hits 8 million
February 26th
Russian troops
begin to take
control of Crimea
March 31st
Obamacare enrollment
deadline
April 30th
Senate blocks minimum
wage increase
1 1 128 31 30
≈ to 78.1
Revised to
78.3
Ω to 82.3
Revised to
83.9
≈ to 82.3
Revised to
81.7
Tracking External Factors
5

6. Americans feel increasingly disenfranchised by the employment market. They struggle
to find jobs that pay a living wage, offer reliable hours, or come with benefits. They feel
pushed to the margins despite their sincere desire to work hard and provide for their
families. Consumers who previously identified with their careers are faltering now that
they’re unable to find jobs that provide the quality of life they hope for.
This sense of disenfranchisement is reflected in the wide range of people who identify as
middle class. Middle class has ceased to be purely an indicator of household income.
Instead, people think of it in terms of values and aspirations. If they believe in hard work
and family, then they consider themselves middle class even if their income doesn’t put
them there. This gives them an identity and sense of belonging that would otherwise have
been provided by their jobs.
This creation of a self-identity based on deeply personal values and dreams rather than
income level reflects the increasingly human outlook consumers have on the economy.
Macro factors like unemployment numbers and the minimum wage all inform their
perspective, but their true confidence in the economy and their willingness to spend
stems from what they see in their personal life, in their neighborhood, in their town.
The Evolving American Consumer
6

7. WHAT THIS MEANS FOR BRANDS

8. Regardless of their underlying finances, Americans who self-identify as middle class want
to reflect that status. And although they may have no choice but to seek out bargains and
savings, they still crave the brands and items that reflect their self-defined middle
class status. Here’s how brands can—and are—responding to this.
The identity of brands like J. Crew and American Express relies on an aura of exclusivity
and status, yet both have recently expanded their offerings to be within reach of
less affluent customers. American Express, long synonymous with a certain prestige, has
launched a reloadable, pre-paid debit card called Serve, aimed as the less well-to-do. The
Wall Street Journal recently reported on rumors that J. Crew, a retailer that orients itself
around more upscale items and shoppers, is introducing a lower-priced store format aimed
at budget conscious consumers.
In some cases, downshifting like this can result in erosion of a brand’s core identity. But
when viewed in the context of consumers’ desire for belonging, these decisions seem more
like sound strategy. Brands like American Express and J. Crew aren’t caving, or catering
to the lowest common denominator. Sure, they need to capture revenue. But they also
recognize that it can have a powerful impact on a person’s psyche to know that,
despite their reduced income, they can still feel like they belong. This shift exists
in mirror image at many mid-market and mainstream brands. Take Target’s evolution to a
fashion destination – people have begun to turn away from high-end brands, gravitating
towards high-end options at mid-market brands. Among the consumers we spoke with,
very few self-identify as upper class, regardless of household income. There’s something
unseemly about it, given the state of affairs. Instead of luxury, they are seeking quality,
function, value. They’re shopping at Walmart, Target, Amazon – all known for their price
and convenience. This practical, no-nonsense shopping fits in with the middle class
mentality and escapes any semblance of luxury.
Create a Sense of Belonging
8

9. In many ways, consumers’ desire for belonging, authenticity, and quality are addressed in
the everyday world around them. They value their friends, families, neighborhoods, and
communities. They trust their ideas, opinions, and recommendations, which in many ways
contribute to the success of farmer’s markets and locally sourced goods.
While big brands like Walmart will never have a mom-and-pop feel, some national brands
have demonstrated that it is possible to appeal to consumers’ desire for the local.
One successful example of this is Smashburger – this national chain serves “localized
burgers” crafted to appeal to that market’s regional taste. The Buckeye burger, with fried
pepper rings and haystack onions, is available only in Ohio locations, while the Colorado
burger, with green chilies on a spicy bun, can only be found in—you guessed it—Colorado.
When brands introduce locally based marketing and products, they are inserting
themselves into a consumer’s sense of community, which in turn affects their
confidence as a purchaser.
As high-end retailers reach down to the mid-market, and as high-income shoppers eschew
ostentation, we observe a tremendous opportunity for brands to embrace a new type
of customer. Now is the time for companies to expand their offerings, tweak their
concepts, and repackage their house brands to appeal at a local level.
Speak to Them Where They Live
9

10. FEBRUARY UP CLOSE
coupons
budget
Obamacare
debt
downturn
foreclosures uncertainty
unemployed
politicians
unemployment rate
food
stamps finances

11. As the Conference Board’s February Consumer Confidence Index reported, jobs remain a
key concern for Americans – those anticipating more jobs fell to a low 13.1% in February.
And in our conversations with consumers, we learned more about why. Across the board,
consumers are frustrated by the realities of the job market: low pay, poor benefits, limited
hours, erratic schedules. Finding a full-time job with benefits, that matches their skill and
experience, feels like a pipe dream. Regardless of age, gender and income, these consumers
told us time and again that job polarization is real and impacting their daily lives. Because
really, they want to be able to do more than just find “a” job. They want to find a job that
feels in line with how they see themselves and who they want to be.
I feel that the only jobs available to me are temporary or sales positions. There are no benefits.
The only jobs I’ve been offered are lower paying, temporary jobs through temp agencies.
I have a 4 year degree in Chemistry but I’ve never been able to get a job in my field. So, yeah,
I feel that we are still in a recession.
Female, $25,000-$50,000, 25-34
There are no real jobs in the area… If you want to go through a temp service to try and find
work but even then they aren’t sure to find you a job that will last for any period of time.
Male, $50,000-$75,000, 45-54
Only seasonal and low pay jobs are available.
Female, $150,000-$200,000, 45-54
Job polarization
11

12. Despite Jane’s degree in chemistry, she is among the chronically unemployed, struggling
to find a place for herself in the workforce. While she holds out hope of finding a job in her
field, Jane explains that for nearly 6 years she has only been hired for low paying positions
that offer no benefits, security, or opportunity.
Jane was disheartened when she learned earlier this year that leading pharmaceutical
brand Merck would shed 8,500 positions from its R&D and commercial operations as part
of a global restructuring. The news hit her hard and diminished her already dwindling hope
of being able to land even an entry-level job in chemistry.
Jane has been fighting this battle since 2008, and it has had quite a price. Jane’s sense
of self has been weakened by unemployment. As she has floundered professionally,
her identity has weakened, and with it her self-esteem and adaptability. Without having
a clear vision of who you are in the world, even simple changes can feel chaotic or
overwhelming. And for Jane and so many people like her, that vision hasn’t existed in a very
long time.
“I feel that the only jobs available to me are temporary or
sales positions. There are no benefits. The only jobs I’ve been
offered are lower paying, temporary jobs through
temp agencies.”
A Glimpse Behind the Numbers: The Disenfranchised Chemist
12
Jane, 29

13. MARCH UP CLOSE
retail
comfortable
minimum wageappliances
purchasestable
hiring
extra money
splurge
improving
secure

14. The mainstream media is full of headlines telling us that, by the numbers, the middle
class is shrinking. But what the data doesn’t talk about is how people’s perceptions and
self-identification factor into socioeconomic status. When given the opportunity to self-
classify, more than half of the consumers we spoke to defined themselves as middle class,
even with household incomes ranging from $25,000 to $200,000. We heard often that in
this day and age, they’d rather identify as middle class than upper class, or even upper
middle class.
In listening to these Americans, we heard a clear message that class isn’t just a reflection
of financial wherewithal or household income, but of personal values and aspirations. For
most, middle class means hardworking, happy and financially responsible. It’s been said
that the “American dream” is dying, but that’s not the case based on our conversations
with consumers. The dream has evolved, like everything else.
Middle class is a state of mind
14
[Middle class is] hard working, pays most of the country’s debt, have gone to war, never shirk from
responsibility. All the right things.
Female, less than $25,000, 65+
I am not rich enough to be a part of the upper class; I am better off than the lower class. Everyday
people trying to do the best they can, making a difference in improving society, making a difference
in others’ lives. Not just existing.
Male, $25,000-$50,000, 55-64
Middle class is a state of mind. I know folks with wealth and they are not happy and I know folks with
little that are very happy. I don’t play the class game.
Male, $75,000-$100,000, 65+
I may be upper class, but I have always identified with middle class.
Female, $150,000-$200,000, 35-44

15. Jim, 40
Katie, 31
Although Katie and her husband live on six figures with no kids to support, she still considers
herself a member of the middle class. She believes her household is “comfortable enough,”
but does not consider herself wealthy. Some may classify her as upper class, but Katie doesn’t
see it that way – she still has to work for a living. Her next purchase? High-end appliances for a
kitchen remodel.
A Glimpse Behind the Numbers: Two Sides of the Middle Class
15
Jim has two degrees, 11 years experience in his field, and has applied for 88 jobs without
success. His wife Jenna makes a decent living. However, it didn’t feel like enough to support
a family, so they chose not to have children. He too identifies with the middle class: he is
not rich, and not poor. What has he cut to make ends meet during his unemployment? High
end grocery stores, cable TV, and his upcoming vacation.
Jim is 40, unemployed,
and his wife makes less than
$45,000. He identifies as
middle class.
Katie is 31. Her and her
husband live on a comfortable
$130,000. She identifies
as middle class.
“I’m not rich, not poor, my wife makes above 40 thousand
so we are straight. I see myself as just at the bottom coming
up with the recovery, I believe that everything is getting
better, I’m out of a job but it is not that bad.”
“I consider myself to be average regarding income –
certainly not wealthy (and not poor either). I feel very
lucky to be in the middle class.”

16. APRIL UP CLOSE
healthcare salary
groceriesbudget locally
neighborhoodgas prices
minimum wage student
loansrefund

17. The Consumer Confidence Index is an important “big picture” view of the economy, but for
those looking to connect with consumers, it’s critical to understand the sentiment behind
the data. The real consumer confidence is a reflection of what’s happening on a person’s
block, in their neighborhood, and with the prices they pay for gas and milk. Retailers are
struggling with economic recovery and that’s because consumers are still uncertain about
their economic present and future. As reported by Reuters, retail sales barely rose in April,
far below expectations, which is not surprising considering what we heard from consumers
these past months.
Food prices, gas prices, durable goods. You name it prices are on a slow but steady rise.
Male, $50,000-$75,000, 45-54
We see family less often because of the gas it takes to get there. We are going through a lot of
extra trouble to put cords on power strips and turn everything off when we’re not using them.
We wear thicker clothes and turn our heat down lower. We went to $80 per year Tracfone
instead of $90 per month Verizon.
Female, $25,000-$50,000, 35-44
Americans “Feel” the Economy at a Local Level
Consumers look to different micro
factors to help them understand
how the economy
is doing.
17
Homelessness Jobs
ConstructionShopping
Gas and Milk Prices
NEIGHBORHOOD

18. Shelley’s story is a familiar one. Like many college students, she lives on campus and is
struggling to make ends meet. Her parents have limited means to help her, and despite a
part time job and subsidized student loans, she told us “the expenses are overwhelming
at times.” Shelley pays attention to every dollar she spends but it just isn’t enough. To
afford necessities like food and medicine, she says she simply needs more hours at work
– hours that just aren’t available.
Shelley is painfully aware of her student loan debt and the impact it will have on her
future. But for now, it’s the day-to-day struggles that occupy most of her thoughts.
Finding a cheap gallon of milk is more important in this moment than the thousands of
dollars of student loan debt she’s accumulating. Shelley’s personal hardships cloud her
outlook for the future. After all, how can she and her fellow students contribute to the
economy if they are dealt the double whammy of being underemployed and struggling
under mountains of student loan debt?
“I look at how hard I have to work with my part-time, minimum
wage job in order to pay for necessities while I’m in school. Minimum
wage is at under $8.00, so one hour of work only pays for about 2 gallons
of gas which is around $4 a gallon. I have to work long hours on top of
school work in order to pay for gas, food, etc. to live. As a student living
on campus, I would say that the economy can be described as people
needing to go into huge debt in order to start a career
and pay off that debt.”
A Glimpse Behind the Numbers: The Minimum Wage Student
18
Shelley, 21

19. Despite a plethora of points of contact, 80% of marketers don’t believe they truly
know their customers. This can and should change. By taking the time to engage their
customers in real conversation, marketers can gain important details and rich color
that will place data and information into better context. Details make the difference in
understanding consumers in the abstract or on an intimate level. When we get past the
numbers, this qualitative look at consumer confidence gives marketers the insights they
need so they can truly “know” their customer.
Background and Methodology
iModerate conducted one-on-one conversations with 425 American consumers between
February 1 and April 30, 2014. For details on our methodology, or for more information on
our Qualitative Tracker services, please click here.
Details Matter