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Analysis

U.S. Mid-Year SMB Consumer Outlook 2022

[x] mins read
Analysis

U.S. Mid-Year SMB Consumer Outlook 2022

[x] mins read
Manufacturing , Retail
02_Elements/Icons/Print Print
Manufacturing CPG & FMCG Small and Medium Business Byzzer Consumer Behavior Inflation Market Trends

2022 has been a year rife with both challenges and growth opportunities depending on your industry and market. But, the consumer outlook is trending in one direction.

The latter half of the year looks to continue to provide a rocky road for growth, and American consumers are showing signs of exhaustion. For a small or medium-sized CPG company, these trends can hit harder than larger brands that have more capital set aside to weather the storm.

But, is there still an opportunity for growth?

Keep reading to learn more about the current state of SMBs, how consumers are feeling about the economy, and how this is impacting business growth.

family paying bills or shopping online

2022 Consumer Outlook

According to the latest NielsenIQ consumer survey, Americans are losing confidence for a variety of reasons. One topic is at the top of most consumers’ minds this year: Inflation. Inflation is impacting every industry and causing many consumers to question their spending habits. They are faced with a weakened dollar, increased costs, and a lack of disposable income.

Unfortunately, these concerns directly impact shopping behaviors and consumption habits for the foreseeable future. From skimping on luxury goods to swapping name brands for private labels to using coupons regularly, consumers are trying everything. This means many brands are going to have to change their messaging and meet consumers where they’re willing to spend.

Read the Full Report Here

Top 5 Consumer Concerns

There are a number of factors that influence the demand of consumer goods and consumers aren’t all concerned about the same challenges. So, your brand may need to react differently depending on your market. To better understand the consumer mindset, NielsenIQ has identified the top consumer concerns mid-way through 2022.

Here are the five top consumer concerns that are impacting U.S. SMB sales:

  • 1. Food Costs

    Food Costs

    Nearly 40% of consumers surveyed identified rising food costs as a primary concern. This isn’t surprising as grocery stores and CPG brands have been feeling the sting for some time. As inflation rises and supply chain issues continue to stack up, consumers have been seeking to save on groceries. U.S. consumers reported that they’re already using as many as four strategies on average to save money. This includes stocking up when items are on sale, using coupons, seeking out stores with lower prices, and buying store brands. This means CPG brands need to focus more than ever on their pricing and promotion efforts as well as optimizing their product assortment strategy to keep shelf space and sales.

  • 2. Gas Prices

    Gas Prices

    If you’ve seen the news at all in the past quarter, you’d be able to guess that gas prices are a major concern. 22% of Consumers surveyed identified gas costs as a top concern going forward. While a problem for car manufacturers and gas stations, this concern translates to many other industries. Consumers are traveling less, raw material and product prices are rising to cover costs, and retailers are taking a critical eye to their shelves. Unfortunately, these costs are difficult to mitigate, especially for an SMB. Taking a look at your retail sales data and limiting your inventory may be a good solution.

  • 3. Economic Recession

    Economic Recession

    The overall state of the economy is also a top concern for many consumers. Only 21% identified it as a top concern, but worryingly, 59% of consumers surveyed did not believe the issue would be resolved until 2023 or beyond. This seems to show that the economic downturn may not yet be the top concern, but it is one that will continue to grow for the foreseeable future. Messaging that highlights how your products will save the consumer money or can help in some other tangible way will be valuable. Focusing on shelf space optimization can also help you maximize the value of the products you are selling.

  • 4. COVID-19

    COVID-19

    Unsurprisingly, COVID-19 continues to play a major role in consumer confidence. Though most markets have come out of lockdowns and are starting to recover, 20% of consumers are concerned that a resurgence may impact their lives. In turn, this is impacting their spending as they seek to save more in case of another emergency. Brands that meet consumers’ wellness needs, offer savings, or are in some way helping alleviate consumers’ fears have growth potential for these consumers.

  • 5. Utility Costs

    Utility Costs

    The final issue that many U.S. Consumers are concerned about is rising utility costs. 16% of consumers surveyed felt that these costs were a major concern. While not in the purview of CPG brands, these costs are making consumers limit spending elsewhere. Additionally, retailers are faced with the same rising costs. So, CPG brands are paying higher slotting fees to get on shelf and are likely to get delisted if sales are low. Focusing on sell-through rates and meeting consumer needs with things like label transparency are key.

SMB Growth Opportunities

Luckily, the outlook isn’t all negative. Consumers are affirming that they intend to spend their disposable income in various ways going forward. For example, 40% of consumers surveyed believe they will increase their grocery spending going forward and 42% expect it to remain the same. This shows that consumers are expecting to shift spending back to the grocery store and provide much-needed relief to CPG grocery brands.

The key to growth lies in the data. Identifying which products and attributes are trending, what consumers are actively seeking, and which retailers are best to work with are key. Investing in a data platform like Byzzer to research your consumers will pay dividends.

Keep Growing with the Right Analytics Solution

COVID-19, inflation, and more are still on the minds of U.S. Consumers. To better protect your business and continue to grow, you need to know the types of data your brand should be measuring.

Byzzer Analytics lets you get deeper insight into product sensitivity and positioning. From pricing, promotion, and assortment data to attribute-level data and our best-in-class Brand Score tool, you’ll never be caught unawares. Even better, this data is all backed by the power of NielsenIQ.

Sign up for a free account with Byzzer today!
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