This is a difficult environment for small and medium sized businesses. Supply chain and inflationary challenges have created a slim margin of error to convert opportunities with key consumer groups. Consumer needs are core to any successful business strategy, and the NielsenIQ global study, the 2022 Brand Balancing Act, highlights which consumers present the greatest opportunities and how to connect with what matters to them.
Let’s explore the needs of these consumer groups and how brands can best position themselves for success.
Connecting opportunities to consumer brand preference
When asked to identify their usual approach to buying across the consumer goods space, surveyed global consumers fit into one of four key groups of brand buyers:
- Agnostic Brand Buyers, or, those who don’t think deeply about which brand is behind their purchase
- Unintentional Small Brand Buyers who form the middle-ground of demonstrating “some” preference to buying smaller brands, but only when it’s convenient to do so
- Exclusive Small Brand Buyers who claim they prefer to buy smaller brands,
- And, Exclusive Large Brand Buyers, who prefer buying well-known large brands whenever possible
Consumer needs and reasons for choosing a brand have fragmented while the retail landscape has grown more polarized. With that in mind, it’s imperative to dive deeper into the mindset of these different brand buyers. Strategies fueled around the specific motivators and values across the brand preference spectrum are most likely to succeed.
Inflation unifies some consumer preferences
With such narrow margins to spare in managing the branded balancing act, small and medium- sized businesses cannot afford to waste resources trying to appeal to core consumers. The good news for brands is that consumers are conserving costs in similar ways across the board.
Ongoing price pressures felt by consumers are having a unifying effect on approaches to saving. Across the globe, 93% of respondents say that a brand’s affordability, or ability to provide good value for money, is important to them, a top factor across all four brand preference segments. Furthermore, the top global savings strategies include:
- 25% monitoring the overall cost of one’s basket of goods
- 25% shopping online to get better deals
- 21% buying whatever is on promotion
Of particular note to small brands: unique savings strategies exist between those who say they exclusively buy small or large brands.
Exclusive large brand buyers are more likely to prefer shopping online to get better deals (32%) and buying larger/economy sizes of their products of choice (27%). Comparatively, exclusive small brand buyers are more likely to opt for private label/store brands (17%) and buy in smaller pack sizes to save money (15%).
In light of recent and upcoming online sales events like Prime Day, Back-to-School sales, Black Friday and more, e-commerce remains a primary resource to cost-conscious consumers.
“With prices as high as they are, and rising across many categories, from a consumer standpoint we actually see e-commerce leveraged for its cost-saving potential,” said Lauren Fernandes, Global Director of Thought Leadership at NielsenIQ. The current climate and consumer cautiousness with spending could make big sales events a more essential purchase moment than in years past. It’s likely that many consumers have held off on big purchases to make the most of moment-in-time sales for items that would otherwise be outside of current budgets.”
Understand today’s brand buyers
Who they are
Who they are
Who they are
Who they are
Big opportunities for small and medium-sized brands
In the current high-inflationary climate, understanding how to resonate with buyers, how to appeal to their unique needs, and bridging to the ways they find affordability is essential. With an incredible 41% of global consumers sitting in the camp of being “agnostic” in their brand preferences, the strategic playing field is ripe for even the smallest of brands to scale growth.
To motivate purchases, small and medium businesses must highlight what is new, different, or unique locally to cater to the “small brand” space of the preference spectrum. While balancing these important areas, small brands can’t lose sight of the nearly universal need to be affordable right now. Providing value in smaller pack sizes for those who wish to downsize and keeping prices comparable to private labels are two of the many ways to favor one’s bottom line with consumer interest in mind.