2023 was a complicated yr: the customers blew chilly, and the economic system blew scorching. The recession-to-be didn’t materialize, and the financial outlook wasn’t half as unhealthy as customers would have you ever consider. But notes from the post-pandemic blues maintain wafting within the air irrespective of the macroeconomic drumbeat.
This yr, in 2024, the economic system is headed for a “gentle touchdown” (that’s fancy communicate for growing rates of interest to manage inflation with out crashing the economic system). “Gradual and low” are your phrases for the yr – slower development, decrease inflation, decrease curiosity, decrease job development. (Though we maintain our fingers crossed behind our backs for a development decide up within the second half from decrease rates of interest.)
In our new report, US Shopper Spending Outlook, 2024, I make sense of this financial outlook for entrepreneurs, model strategists, and development leaders. We advise all walks of B2C advertising executives to:
Take note of kitchen desk economics. There’s macroeconomics, after which there’s kitchen desk economics! The media is rife with pricing horror tales, and customers are fleeing to non-public labels. The 2024 outlook isn’t any rosy rebound, so mood any pleasure about averting a recession and producing historic company income – shopper confidence is about as little as it’s been this century, and it’s going to point out!
Give attention to non-price development levers. Some classes will stay comparatively immune from downward value strain, however there’s a clear development of weakening costs. With out pricing energy, manufacturers should double down on quantity development (and 4 non-price levers will get you there).
Emphasize differentiation. Corporations accustomed to higher post-pandemic occasions will discover it troublesome to wean off robust development. Corporations really feel pressured to develop their slice when the pie doesn’t develop as quick, and one of the simplest ways to draw and retain clients is to distinguish.
Count on reduction within the second half. Classes that rely on entry to credit score fare significantly better when borrowing prices are low. The anticipated price cuts within the second half will lubricate the market and spur development for durables, home equipment, and residential manufacturers.
Wish to study extra? Forrester purchasers can: