Cost of living Crisis impact
Not a day goes by where we are not confronted by the cost-of-living crisis the country is currently facing. Deloitte predict a squeeze on disposable income of 6.8% in 2023. It will have an impact of course on how brand owners act and succeed with CFO’s intent of prioritising cash and costs. But just as during the Covid crisis, different brand owners will respond differently – and there will be winners and losers. The question is, what determines who the winners will be?
It is worth noting that many marketers that put a stop to marketing activity during Covid are still having to work really hard to build back their marketplace. Conversely, marketers who decided to push harder during Covid, either because they had product suited to the home centric lifestyles we were all forced to adopt, or they were smart enough to pivot to a product mix that was more suited, enjoyed record trading results.
Think ASOS who pushed product lines around leisure wear for home working rather than party fashion items or Furniture Village who promoted home office desks and chairs rather than formal dining or renovation furniture.
What might the changes be this time?
Will consumers delay big ticket item purchases? Will they entertain at home more than seeking entertainment outside the home? Some may recall the “Lipstick Effect” when sales of beauty product soared as more affluent buyers eschewed theatre and concert tickets for more modest luxuries. Will that happen again and if so, what is your “lipstick”? If you were Heals, might you expect fewer sofa sales but more table lamps and cocktail sets as habits or priorities change?
As always, in adversity, opportunity loiters. Product prioritisation is key but also key is how you best address your marketplace with the right offer through the right channel. The answer is Be Agile!
A recent GWI survey looked at how different demographics start the product research cycle when they are looking to buy. Boomers reach for Google. Millennials, Generation Z and Generation Alpha’s go to TikTok, Pinterest or Instagram. Facebook (or Meta) usage seems to have been declining as a research tool for two years now.
Getting the right mix
Prepared marketers are scientifically analysing the full funnel mix of channels available to them and measuring the relative impact of each channel on overall campaigns effectiveness. They are taking a longer-term approach, understanding that branding in social channels today is driving organic or direct brand engagement at purchase time and setting up KPI’s to measure the extent of that interaction. Cross channel synchronisation is being tested and measured to understand the impact of serving display ads to consumers who engage with YouTube and Meta content.
Campaign effectiveness, not only from test to roll-out, but during roll-out activity should, and is, being monitored and measured so that changes can be made mid-campaign. In an uncertain market this level of agility is essential in order to stay ahead of your competitors.
In a marketplace where more brands are competing for active consumers it’s essential to be smarter and more scientific about your marketing strategy. Ensure you have access to correctly targeted audiences, via the appropriate channel and with the right message. And be prepared to amend that activity mid flow if results dictate. That’s what builds resilience against the oncoming challenges.