Consumers realize that supply chain issues and rising manufacturing costs are top reasons behind price hikes. But CMOs must be sensitive to yet another consumer concern: 39% of Gartner Consumer Community (GCC) surveyed in March 2022 believe that brands and retailers are actively raising prices in pursuit of greater profit. 1 That’s an increase of nine percentage points since November 2021. 2
Around 40% of GCC respondents insist that companies must do more to absorb some or all of the additional costs instead of passing it onto their customers. Expectations in this realm range from adjusting to slimmer profit margins, implementing more efficient processes and curbing executive pay to offering additional sales, discounts or rewards to shoppers to incentivize their loyalty. 3
Consider what consumers told Gartner:
What does this mean for CMOs? They need to:
- Closely watch consumer sentiment to get a more nuanced and accurate read that quarterly sales reports alone cannot offer.
- Bring consumer and customer perspective to internal pricing strategy conversations — to pinpoint and calibrate the upper pricing limit that consumers may not be willing to accept.
- Continue to focus on delivering clear and consistent messaging that lays out their rationale for price increases, including specific conditions and challenges in their product category.
Gartner clients can access the report, “Consumers Begin to Blame Companies for Price Increases,” by Gartner VP Kate Muhl and the Consumer and Cultural Insights team.
1 Gartner Consumer Community (22-29 March 2022, n = 270)
2 Gartner Consumer Community (16-23 November 2021, n = 327)
3Gartner Consumer Community (1-7 April 2022, n = 252)
4Gartner Consumer Community (1-7 April 2022, n = 252)