The Context: A World of Uncertainty
The world has entered an era of pronounced volatility, as evidenced by the World Uncertainty Index. From the turn of the century onwards, uncertainty – whether economic, political, or social – has been a persistent force. This era of turbulence has been punctuated by events such as global financial crises, pandemics, climate protests, and trade tariffs. Consumer sentiment, shaped by this backdrop, reflects a heightened sense of vulnerability and demand for change.
Tariffs are not the issue, per se: they are simply compounding a general sense of unease. Consumers are grappling with economic pressures and a broader sense of volatility in their lives. This sentiment has translated into evolving expectations from brands, pushing them to become beacons of trustworthiness, value, and innovation in these challenging times.
Key Findings from the Consumer Sentiment Barometer
The Consumer Sentiment Barometer reveals crucial insights into how consumers perceive and respond to current economic conditions:
1. Awareness and Concerns Around Tariffs
The study found that 84% of global respondents were aware of changes in tariffs, with awareness slightly higher in markets closer to the US, such as Mexico and Canada. When asked who they held accountable for the economic challenges associated with tariffs, over 70% of global respondents pointed to the US Government. This sentiment was especially pronounced in neighbouring countries like Canada and Mexico.
As the saying goes, “it’s the economy, stupid”. Tariffs were seen as a significant contributor to rising prices, particularly in markets like South Africa and Canada. However, consumers’ top concerns extended beyond tariffs, with the global economy, inflation, and geopolitical conflicts dominating their anxieties.
2. Shifting Consumer Priorities
Economic pressures have prompted people to re-evaluate their spending. Pragmatism is the order of the day. Many are cutting back on discretionary expenses such as luxury goods, entertainment, and holidays. For instance, 43% of global respondents reported reducing general expenditures, while 38% were actively seeking discounts and promotions. Notably, the desire for cost-effective solutions is shaping consumer behaviour across categories.
The Path Forward: Implications for Brands
Against the backdrop of shifting consumer priorities, brands must act decisively to remain relevant and resilient. Five key strategies brands should do now:
1. Be meaningfully different to more people
Strong brands – those that are meaningfully different – are better equipped to weather economic storms. These brands not only decline less during downturns but also recover more quickly. By consistently meeting both emotional and functional consumer needs, brands can build enduring relevance.
2. Don’t go dark
Cutting back on marketing spend may seem like a quick fix during economic uncertainty, but it often leads to long-term damage. Brands that continue to invest in advertising and maintain awareness are more likely to sustain consumer loyalty and recover faster when conditions improve.
3. Get a grip on your pricing power
Understanding the relationship between brand equity and pricing is critical. Brands must find a balance between price increases and perceived value. Over-discounting can erode category value, while excessive price hikes risk alienating consumers.
4. Make your creative count
High-quality advertising and innovative marketing content are crucial drivers of brand profitability. Tailoring messages to resonate with consumer sentiment – such as emphasising local provenance in certain markets – can enhance brand appeal.
5. Find new space for your brand
Brands must look for opportunities to innovate and meet emerging needs. Whether through new product variants, expanded price architectures, or entry into adjacent categories, incremental innovation can drive growth and differentiation.
As volatility persists, brands are uniquely positioned to act as stabilising forces in consumers' lives. By remaining agile, investing in meaningful differentiation, and responding thoughtfully to evolving consumer priorities, brands can navigate the uncertainty of today while building a foundation for long-term success. The era of volatility demands resilience, and with the right strategies, brands can turn challenges into opportunities, becoming trusted allies in the lives of their consumers. Read more here on the five actions CMOs can take now and how Kantar can help, or watch on-demand where Jane Ostler and J. Walker Smith shares their expert view on this topic in more detail.
