Marketers face a uniquely challenging period of instability and uncertainty – a perfect storm of sharp upward pressure on price and collapsing consumer spending power, combined with ongoing economic and political shocks.
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So, brands and businesses need to plan for uncertainty. But one thing is certain. As with all previous downturns, at the passing of the storm there will be winners and losers.
The two-word summary advice of “how to win” from past recessions is “keep spending” – shorthand for keep communicating, keep acting and innovating, and keep finding new ways to reinforce what your brand stands for and stand out.
Brands that do this and set out to proactively navigate the storm will emerge stronger. Brands that retrench and batten down the hatches to weather the storm may survive but will almost certainly emerge weaker.
Here are five ways brands can navigate the coming storm:
Scenario planning is essential
“In preparing for battle I have always found that plans are useless, but planning is indispensable.”
– Dwight D Eisenhower
Don’t try to pick a winning strategy, plan for uncertainty. Explore and prepare for different outcomes (including further supply chain disruption and cost rises).
Seek plans that are as “likely outcomes-neutral” as possible. Review and update regularly as the storm progresses.
Be forensic about the risks and opportunities of changing consumer behaviour
Impacts will vary by category (essentials, treats, postponables, expendables) and consumer segment, so it’s important to map risks and opportunities by consumer segment.
Understand the risks of specific groups trading down, buying less or trading out and develop strategies accordingly. Fundamental human needs relating to pleasure, and human connection still apply, there are still opportunities to grow and win hearts and minds, for instance by making indulgence affordable.
Covid taught us to focus on what is permanent and what is temporary and also how ongoing trends accelerate (eg ecommerce) way more than fundamentally new behaviours emerge (whatever happened to the “travel reset”?)
View price from the consumer perspective of affordability and experience value
With a “weathering the storm” mentality, it’s easy to focus on cost of goods increases and regard price increases as regrettable but justifiable and inevitable.
From a consumer perspective the natural impulse is to expect more if they pay more, and consider their alternatives if not. So, consider what you can do (in return for price rises) to help make life more affordable and enjoyable.
A great example is Asda’s £1 café meal deals for over-60s and kids – while not profit-generating in isolation it draws people to the stores for their discretionary as well as essential purchases, as well as being a powerful statement of purpose.
Challenge the status quo like never before
The “never let a good crisis go to waste” dictum is evergreen. We may be hard-wired to resist change, but a crisis provides permission to override this impulse in a totally transparent way to the benefit of all.
So, look hard at “business hacks” that reduce cost out in return for keeping things affordable for customers, and “consumer hacks” that help people save money or get more out of what they buy.
The recent campaign from UK charity Shelter has taken the notion of hacks that challenge the status quo to another level.
Foster community spirit and social connection
As Covid has reminded us, times of crisis create community. Brands can contribute to this with tangible actions (such as mobile network Giffgaff freezing prices until 2024) but also emotionally.
Tonally, while keeping it real, people want reasons to be cheerful – practicing empathy does not mean being sad or over-serious.
Remember the cost-of-living crisis is societal. And that includes employees, who need looking after as much as everyone else.
This is not just looking after your most valuable assets, knowing that your brand is helping its people through the cost-of-living crisis inspires customers too.