WJR Business Beat: Consumers Still Spending Despite Inflation (Episode 445)

On this Business Beat, Jeff cites survey results showing consumer spending is up in Q2 over Q1 this year in certain categories despite inflation.

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Good morning, Paul!

We’re all spending less these days to deal with the effects of inflation, right? You know, tightening the belt strings, time to pull back on spending. Well, hold up. According to an analysis by customer platform Klaviyo, consumer spending is actually up in Q2 2022 over Q1. What? Yes, indeed, it is.

Supply chain problems and fears about inflation are not preventing consumers from spending online as average order value increased by 19% in Q2 compared to Q1 and a deeper look into the data indicates how specific categories are faring. It’s apparel and accessories that lead the way up, 13%, quarter two over quarter one this year; food and beverage up 12%, jewelry up 4%. And the report goes on to indicate that the average value per order is also up value is up 24%, in fact.

Now Andrew Bialecki, CEO and cofounder of Klaviyo, says this about the surprising data.

“Despite the economic headwinds, consumer spending in certain categories continues to be consistent,” he says, “particularly in categories like apparel and accessories as consumers start attending more events and returning to the office” is helping as well. While consumers might pare back on buying higher-price goods, like electronics or price shop for more essential goods, they’re still going to buy from the brands they love and buying they are.

Now to conduct the study Klaviyo examined results from over 300 million global shoppers across more than 80 countries and territories powered by the company’s platform. So, chin up, small businesses, much to our surprise, but much to our delight, consumers are indeed spending.

I’m Jeff Sloan, founder and CEO of startupnation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.

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