Six economic insights to fuel business growth, part 1

By knowing things like when and how people are shopping, you can better position your company for growth.¹

That’s why Authorize.net held an exclusive webinar with Bruce Cundiff, Visa’s Vice President of Business and Economic Insights. Bruce shared key insights on the outlook of the economy and highlights three points that can help fuel your business growth. 

1. U.S. economic growth indicates uptick in spending on home goods

While there are many factors that shape the economy, there are a couple thoughts to consider:

• When will the economy return to normal?
• What kinds of products and services are consumers buying? 

First, when will the economy return to normal? U.S. economic growth is being impacted by supply chain disruptions, inflation pressures, and government stimulus. Taking into consideration all these variables, our Visa economists look for GDP growth to return to its long-run average in 2023. 

Second, what kinds of products and services are consumers buying? Consumers are spending more on home nesting items like groceries, recreational goods, restaurants, and home furnishings.¹ This indicates that consumers are still looking to spend, which is a contributing factor to the strain on the supply chain. In contrast, during the pandemic, consumers have spent less on gas, transportation, hotel, and recreational services. 

Learn more about Visa’s business and economic insights.

2. How changing demographics impact the economy

Demographics are changing because of slower population growth and an aging population.¹ Slowing population growth means less children. An aging population means more people are leaving the labor force. This creates a gap in the workforce.

The pandemic accelerated the gap in the labor force as many individuals decided to retire early.¹ For example, some teachers who worked their entire career in a classroom decided to retire early rather than moving to online instruction.¹

With changing demographics comes changes in consumption. Consumer consumption changes over a person’s lifetime. For example, younger spenders tend to purchase infant accessories or spend on mortgage interest—compared to older adults, who spend their money on food away from home, airline fares, and prescription drugs. 

In short, by understanding customers at different points in their life, businesses can create plans to reach their target consumer. It is important to note that these are projections, so keep in mind that outlooks and projections can change. It is important to pay attention to your customers. Understand their needs and how they interact with your business. As things change, you may need to adapt to better serve your customers.

3. Discovering consumer insights

The pandemic revealed evolving consumer behaviors. Behaviors like nesting and creating an inviting and comfortable place at home became important to many consumers. Some behaviors are more likely to remain, while others may take longer to bounce back.¹

A few spending categories that are likely to remain the same include:

• Lawn and garden
• Home improvement
• Gaming and streaming
• eGrocery
• Remote learning
• Telemedicine

A few behaviors that are more likely to remain subdued include:

• Large sporting events 
• Concerts
• Travel

Tune in for part 2

By looking at U.S. economic growth, changing demographics, and recent consumer insights, businesses can better determine how, what, and when to sell to their customers.  

While we only shared three insights in this post, be sure to read next week about three more equally important insights. 

Bonus insight: You can find another insight specifically tailored to small businesses from watching an on-demand version of the webinar.

¹ Economic Insights for Small Businesses Webinar, November 10, 2021