Can brands help consumers fend off financial crisis?

wallet-3548021_1920New Prime Minister Liz Truss might have pledged to tackle soaring consumer energy bills, spending billions to protect people from rocketing prices, but the cost-of-living crisis is going nowhere fast.

With customer finances already tight, and inflation in double figures, brands are also feeling the squeeze; even as far back as May, 75% of Brits said the issue was affecting their spending plans across the board.

With this is mind, Decision Marketing quizzed a number of industry experts to gauge what they believe brands should be focusing on.

Tribal Worldwide chief strategy officer Darren Savage reckons many businesses will engage in price wars, as they want to attract short term revenue and show support for customers, although often this is based on purely economic definitions and representations of value.

However, purely economically framed price drops, without a suitable accompanying brand narrative, can be interpreted negatively, he claims, citing research from Tribal and the Management School at Lancaster University.

Savage explains: “When they found low price messaging, stripped of the content of a brand story, many grocery customers felt unhappy about putting cheaper food on their table, as it made them feel like a bad parent who was not looking after their family.

“But, when the nature of value was balanced by a range of brand narratives about the emotional meaning of food and how it can express unspoken meanings, or sharing stories about the producers of the food, lower prices, were interpreted more positively.

“At times of uncertainty, many people still look for brands to fill a vacuum of uncertainty, this is the opportunity at hand, to define how to offer tangible value, with emotional value, and in doing so allow your brand to act as a lighthouse to navigate through the harder times.”

For What’s Possible Group managing director Charlie Makin, the fundamental issue is to forensically investigate consumer attitudes in order to prepare for what is going to be a deep and long recession.

He adds: “Looking back at what worked in 2008 is not going to be effective in 2022 as the previous recession was relatively short and controlled. In comparison this is more like the 1970s, long and deep. Consumers will have to make their decisions through necessity, rather than choice.”

Makin reckons brands need to align with their clients’ business imperatives, and match this to consumer behaviour. Brands will need to communicate effectively both to consumers, who are severely stretched, as well as those who are more affluent. Surviving this period is about targeting the right message to the right consumer group.

He continues: “Consumers are going to be forced to make really harsh decisions and they will choose brands that are empathetic and deliver exceptional value. For example, our research shows that over 60% of the population are making significant choices about grocery shopping. Asda developed a strategy to help feed children this summer, meaning kids across England and Wales can eat for just £1 at any time of day in Asda Cafés, seven days a week, with no minimum adult spend required. We think lots of brands will start developing initiatives like this in order to show they are making an effort to support consumers in their struggles.

“Especially in times of crisis, loyalty is a two-way street. If brands want to maintain consumer loyalty through the recession then they need to payback in times of hardship. People will also evaluate brands on how they behave rather than what they say. Advertising and marketing strategies will have to change to show brand activity is becoming more action-orientated about helping vulnerable people.

Meanwhile, The Brooklyn Brothers strategy director Siobhan Simpson insists that, despite the energy bailout, the need for products that can help bring down energy usage will also be critical.

She explains: “Take Jamie Oliver’s most recent TV show and book One-pan Wonders; recipes that require the heating and washing of only one kitchen item (and therefore using less energy). Or Dunelm’s shift from naming their ‘blackout curtains’ to ‘thermal curtains’, bringing new relevancy to an existing product range.

“From the air fryer that uses less energy than an oven, to the clothing that can be washed on a lower temperature and doesn’t require a tumble drier; brands should consider how they can communicate the benefits of their existing products in relation to the energy crisis.

“When many retailers are facing the same price hikes, competing on price will prove more and more difficult, but there is opportunity in shouting about products that consumers can invest in, and will help them save money in the longer term.”

Alan agency managing director Michael Richards is more circumspect, maintaining that recessions and crises like the cost of living are a part of the economic cycle – “and I’ve seen a fair few in my career” – but he says something that becomes apparent every time is the need for empathy and effective communication.

Richards adds: “In previous recessions, we have seen businesses cut marketing budgets in order to cut costs, but we know doesn’t help in the long run. You can’t spend blindly in spite of the recession, but you can use this time to prepare and invest wisely.

“Work out the best balance for your business and create striking and empathetic creative that relates your consumers – now isn’t the time to continue in denial. Doing so will help maintain loyalty within your customer base and protect your brand equity in the coming wave of turbulence.

“Even when reflecting on the coronavirus pandemic, the businesses that survived and increased their market share post pandemic, were those who allocated spending wisely, and remained engaged with their consumer base throughout. It’s important to remember that as much as businesses are facing a tough winter, so are your staff and consumers. We all have difficult decisions to make to survive.”

The question is, have you got what it takes to be one of the survivors?

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