Whether it’s at gas pumps or in grocery stores, people across the United States have been feeling a pinch in their pocketbooks this summer. Inflation is the highest it’s been in decades, and consumers are worried and jittery, adjusting how they spend and save. But not all consumers are the same. Although consumer confidence overall has plummeted to a new low, savings are high, and there’s nuance to how people are responding—depending on age group, income level, and what they’re buying.
Our latest research draws from a survey conducted in July 2022 and reveals the complexity of US sentiment and behavior during these uncertain times, as the pandemic becomes endemic and inflation is top of mind. Although our findings do not capture consumer responses to the US government’s strong jobs report in late July, or to the softening of inflation announced in early August, it is nonetheless clear that, amid the dark economic mood of this summer, there are glimmers of hope. The implications for companies are clear: focus on resiliency and cost but also make intentional bets for longer-term growth. Companies should also seek to understand the nuanced sentiments and behaviors among different groups of consumers and the categories in which their businesses operate.
The implications for companies are clear: focus on resiliency and cost but also make intentional bets for longer-term growth.
The eight charts below represent findings from our latest Consumer Pulse Survey, which was in the field from July 6 to July 10, 2022, and included perspectives from more than 4,000 adults in the United States (sampled and weighted to match the general US population). We combined the results with third-party data to help understand not just what consumers tell us but also how they behave. These insights build on the work we have undertaken since March 2020, when we began to regularly conduct consumer surveys and combine our research and analysis with third-party data on US spending to glean insights into how consumer sentiment has shifted since the COVID-19 pandemic began.
Companies that make bold moves during uncertain times generate greater returns in future business cycles.
In light of the complexities surfaced in our research, as well as current macroeconomic uncertainty, resilient growth is more important than ever. Consumer-facing companies should face today’s challenges by focusing on the following:
- Know your consumer. Companies should continuously track swings in sentiment and spending, and leverage real-time insights and analytics to craft the right assortment, offering, and personalized customer touchpoints and communications.
- Launch big growth bets. With a refreshed view of consumers, retailers should pivot to promising combinations of consumers, subcategories, and strategies and place big bets with potential to double growth. Companies that make bold moves during uncertain times generate greater returns in future business cycles.
- Self-fund growth through efficiency. Retailers should rethink their value strategies and remove inefficiencies across both customer-facing and internal spend buckets. Greater growth can come from surgically reinvesting in areas like marketing and commercial spend optimization.
- Create an agile operating model. With consumer sentiment and behavior shifting from month to month, it’s imperative to communicate frequently with the company leadership team, enable rapid decision making through test-and-learn sprint cycles, and be willing to quickly adapt operations to an ever-changing environment.