Brands warned 'shiny happy ad campaigns' won't wash

Brand owners are being urged to “cut the crap” in their marketing, amid claims that consumers’ rose-tinted glasses are off, with inflation, mass layoffs, and global financial chaos meaning “shiny happy ad campaigns” will no longer work.

So says “The Slowdown Lowdown” report by GWI, which maintains that environmental and social justice fatigue is making consumers care less about credentials and pledges, while cautious, thrifty shoppers are reassessing their buying habits.

In the current climate, honesty is the best pricing policy, the report stresses. Over half of Brits most want companies to be honest and give people plenty of warning before raising prices – 7 in 10 consumers want at least a month’s notice.

People want to feel in control of their spending, so knowing when a rise will happen is more important to consumers than the price itself; older consumers want to know when price rises will happen, younger consumers want to know why.

Meanwhile, consumers are still indulging in little “pick-me-ups”, they just are not making a big deal about it.

Clothing, fragrances, and make-up are some of the most popular discreet treats, with “affordable luxury” brands thriving, while home entertainment is also holding its own, as just 11% plan to cancel TV subscriptions.

But not all trending purchases are quite so secret. Some consumers are more willing to push the boat out on holidays, as those looking to spend extra on pampering are 37% more likely to look for top-of-the-range options. To them, memorable experiences like holidays and gigs are worth splashing out on.

But even if consumers are less interested in noticeable logos, many still want well-made products; consumers say quality (53%) matters more than cost (36%). Premium brands should think twice before lowering prices, or risk lowering their aspirational power.

Brand owners are also being encouraged to ditch their assumptions about where the spending power lies, with younger consumers – many of whom have either moved back home or have never left – have found themselves feeling flushed.

In fact, half (49%) of Gen Z in Western markets say they live with their parents, rising to 72% in APAC, with 54% of believing their income will increase in 2023 and 32% saying they will end up spending more on non-essentials this year.

While many are keen to make space for must-have treats, consumers are getting wiser when it comes to making their money stretch further.

One in seven Brits (15%) have used second-hand clothing app Vinted in the last month, while 21% want to sell/buy pre-loved goods. Some 44% plan to cook more, rather than eat out.

Globally, just 28% expect inflation to drop, but those who say it has had a dramatic impact on their finances are more likely to say they will spend more on non-essentials in 2023.

Worries about inflation outpacing savings can drive people to spend, as consumers seek ways to feel good and rebalance their lives.

Demand for budgeting help and memorable experiences is high, and consumers will appreciate brands that showcase ways to enjoy life in a more modest fashion.

The report states: “The global economy is sending mixed signals to say the least and the only way to understand or predict behaviour in a downturn is to study consumer psychology. Even if financial institutions are putting a more positive spin on things, we can’t assume that people will start loosening their purse strings as most don’t base their spending habits on how the stock market or GDP is doing.

“While inflation is set to fall in 2023, this doesn’t necessarily mean we’ll see a drop in prices, just that prices will go up at a slower rate.

“We’re in hard times and budgets are tight. Brands need to know how spending habits are changing and how to fine-tune their offerings in response. It’s easy to get bogged down in the debate around whether or not we’ll see a recession, though it’s a question of whether it’ll feel like one to shoppers and whether this will put them off spending.”