Embracing Predictability Amidst Unpredictability: Elevate Results as the Prime Focus
In the current economic climate, marked by a decrease in consumer confidence and rising prices, businesses are seeking opportunities to stand out and drive growth. One such strategy is partnering with strategic partners who are willing to take calculated risks, offering guarantees of incremental return on ad spend. This approach is particularly effective for brands looking to target the "movable middle" - frequent category purchasers who aren't locked into a specific brand [1].
Michael Della Penna, the Chief Strategy Officer of InMarket, emphasizes the importance of marrying top and bottom-of-the-funnel tactics. This strategy expands opportunities for campaign success, maximizes outcomes, and helps brands distinguish themselves from competitors [2].
Recent data from InMarket's Q2 report reveals that shoppers are continuing to trade down to private labels in categories such as bottled water, flour, and eggs [3]. Understanding your most valuable consumers and stores can help brands identify the retail channels offering the greatest opportunity for incremental growth [4].
Granular measurement can guide brands in understanding the most valuable consumer or store by leveraging loyal customers in the movable middle analysis or offering a "by retailer" analysis on campaign performance [4]. Combined with insights into the competitive landscape, the by-retailer view ensures understanding of where specific campaigns are driving the best outcomes and where improvements might be needed, as shopping remains fragmented and value-focused [5].
The impact of tariffs on consumer spending is significant, particularly in categories like clothing and textiles. With shoe prices up 39% and apparel prices up 37% in the short run, and expected to remain elevated by around 18-19% in the long run, these price increases translate to an average household income loss due to tariffs of about $2,100 to $2,400 annually [2].
However, sectors less affected by tariffs or benefiting from domestic production incentives could see relative growth. For example, domestic manufacturers aligned with U.S. trade policy encouraging "American workers first" may find expanded opportunities [4]. Essential consumer goods and sectors resilient to price hikes or with inelastic demand might maintain or grow share.
In the face of these challenges, it's crucial for brands to focus on the metrics that matter to stakeholders, such as incremental growth across sales, visits, and return on advertising spend. Prioritizing bottom-of-the-funnel tactics that are proven revenue growth engines is key, as shoppers are trading down and making more final decisions in-store [1].
As the Forbes Business Development Council, an invitation-only community for sales and business development executives, continues to evolve, understanding the impact of tariffs on consumer spending and brand growth will be a crucial factor in navigating the ever-changing business landscape.
References:
- InMarket Blog
- CNN Business
- U.S. Trade Representative
- White House Fact Sheet
- Federal Reserve Economic Data
- Michael Della Penna, a notable figure in the industry, underscores the significance of integrating top and bottom-of-the-funnel tactics to enhance campaign success, maximize outcomes, and help brands distinguish themselves from competition.
- InMarket's Q2 report reveals that shoppers are inclined to opt for private labels in various categories, indicating a shift towards value-focused spending.
- Understanding valuable consumers and stores can help brands pinpoint retail channels offering the greatest potential for incremental growth, a strategy that aligns with targeting the "movable middle."
- Granular measurement, supported by loyal customers in the movable middle analysis and a "by retailer" analysis on campaign performance, can help brands understand where specific campaigns are driving the best outcomes and where improvements might be needed.
- The advent of tariffs has had a substantial impact on consumer spending, particularly in sectors like clothing and textiles, with price increases translating to an estimated annual household income loss of around $2,100 to $2,400.
- Domestic manufacturers that adhere to U.S. trade policy and prioritize "American workers first" could find expanded opportunities amidst sectors less affected by tariffs or benefiting from domestic production incentives.
- In the current landscape, brands must prioritize metrics that matter to stakeholders, such as incremental growth across sales, visits, and return on advertising spend, particularly since shoppers are trading down and making more final decisions in-store.
