NielsenIQ just announced the company’s first global report focused on small and medium-sized business We spoke with Andrew Criezis of NielsenIQ to learn more about report findings and how changing consumer preferences are shaping the path to success for SMBs in 2022 and beyond.
TheCustomer: NielsenIQ just announced the company’s first small business report, “The 2022 Brand Balancing Act.” Can you tell me a bit about what precipitated the report?
Andrew Criezis: The SMB market continues to represent an important, and growing, audience for NielsenIQ. In the U.S. alone, there are over 50,000 consumer packaged goods (CPG) brands with over 95% considered a small or emerging brand. Despite those numbers, and their clear importance, many small brands struggle with building their consumer and brand story for retailers, both online and offline, and assume the types of insights and consumer data can only be accessed with large budgets by major national brands. It’s not true and now, more than ever, there is demand for small and local brands. NielsenIQ’s Byzzer platform helps level the playing field for small CPG brands with in-depth insights on brand performance, overall category performance, shopper behavioral data around brands and markets, and more.
To some degree, that is the balancing act for small brands, to use data effectively and reach shoppers through retail intelligence and meaningful actions. The other balancing act, and really what this report aims to say is for small businesses, it’s about balancing opportunities and expectations from consumers.
The report finds when consumers engage with a small business, they’re expecting it to be local, of higher quality, or better for the environment, for example. But they also need to balance value and availability with the brand.
TheCustomer: Share with us some key findings from the report.
Andrew Criezis: It’s no surprise, especially with prices skyrocketing, “affordability” was found to be the top functional reason why those surveyed said they choose a brand. In fact, 93% of respondents said affordability drives a brand purchase.
But what value means to a shopper is evolving. It’s not just low price. For example, 90% of respondents also choose a brand if they had a memorable experience with that brand, and similarly if the product is of high quality. Brands need to deliver.
What’s also very interesting, is how shoppers perceive a “large brand” and a “small brand.” For example, small brands are considered “independent” and “local.” A report overview with perceptions can be seen here in this article, The brand balancing act of small and medium-sized businesses.
TheCustomer: Aside from affordability, what are some of the other functional reasons you identified driving brand choice?
Andrew Criezis: We defined functional reasons as specific aspects or offerings within a brand’s value proposition. This includes not only price and availability, but also product attributes and functional aspects such as specific ingredients, or how it is produced and packaged.
Many small brands are already associated with being environmentally friendly, natural, sustainably produced and clean label. And they should continue touting these attributes to both new and existing buyers.
Keeping an eye on affordability, especially compared to increasing private label options, omnichannel availability and product range—both variety and sizing options—will be key considerations for small-to-medium sized CPGs moving forward.
TheCustomer: The report touches upon four categories of consumers when it comes to brand preferences. Who are they?
Andrew Criezis: NielsenIQ has identified purchase preferences and opportunities across four types of brand consumers: Agnostic Buyers (41%), Unintentional Small Brand Buyers (26%), Exclusive Small Brand Buyers (12%), and Exclusive Large Brand Buyers (21%).
Breaking that down, you have more than a third of shoppers buying small brands whether unintentionally or exclusively, so they’re getting into baskets.
Even more eye-opening is the 4 in 10 shoppers in the survey who say they don’t buy on brand. These shoppers are a key target for small brands to tell their story and share how they deliver against sustainable, clean label and healthy attributes to turn those agnostic buyers into exclusive ones.
TheCustomer: What are some of the ways in which these purchase groups differ?
Andrew Criezis: Small brand buyers continue to seek out environmentally friendly, natural and healthy, sustainably produced and clean label products. Shoppers of small brands also equate those brands as being local.
Shoppers that buy large brand products exclusively are more omnichannel in how they buy products and more than a third are looking for the best available deal online. Shoppers who are agnostic when it comes to brands have been among the hardest hit financially, which adds to their motivation to buy on price above all.
Shoppers who buy small brands unintentionally are also cost conscious, but they’re more open to spend more when a product meets emotional factors.
For a detailed analysis of these consumer categories, visit the article, Small businesses need to listen to the preferences of brand buyers. The article highlights strong opportunities for SMBs to target brand-agnostic shoppers and those buying small brands unintentionally.
TheCustomer: For a small or emerging CPG brand, what are the key takeaways of the report?
Andrew Criezis: First, the report lays out four bases to help small brands build a growth strategy: consumer brand preferences (identify what they’re into), performance benchmarking (register how they’re performing), trend-cycle timing (factor in consumption trends, etc.) and meaningful differentiation (identify a signature style or how a brand stands out). Each base is a building block or guidepost in helping small brands grow scale.
Secondly, more than half of global consumers surveyed (51%) say they’re buying a greater variety of brands than they were before COVID-19, and even more (67%) feel that if they look hard enough they can find a brand that fits their exact needs. This is a hugely important insight that can help shape emerging brands and how they tell their stories for investment and placement in retail. These factors increase the potential for consumers to purchase smaller brands that they may have previously only considered purchasing.
With limited analytics budgets available for most SMBs, it is important to identify the opportunities that are within reach and focus on the approaches that will matter most. Keys to success revolve around the following three factors:
- Motivate the purchase: Highlight what is new, different, or locally unique about your brand to cater to small brand buying preferences.
- Resonate: Align products to specific claims or environmental/social benefits that personally matter to these consumers and ensure they are on the label or in the product description online for searchability.
- Bridge to affordability/value: This might include ensuring smaller pack sizes are available or price comparing to private labels.
These are key insights for SMBs looking to grow their brands. On the way, we will be releasing three more parts of the report with more insights on how small brands can win big in this current economic climate.
Andrew Criezis is the Senior Vice President and General Manager of NielsenIQ SMB business. He is a subject matter expert in CPG, go-to-market strategy (GTM), retail and brand analytics, global operations, and revenue generation. Andrew spent 8 years at NielsenIQ in senior leadership roles including SVP of Global Sales Operations and Sales Enablement before helping launch Byzzer as its Chief Product Officer in 2020. His long and varied experience qualifies Andrew to speak authoritatively on topics ranging from global product and integrated marketing to sales enablement to retail industry forecasting.
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