With the current pace of change, it’s easy to be out of touch given current economic conditions and rapidly changing consumer behaviour. If you’re using research from six months ago or longer, it may not reflect how your customers feel today.
The latest Kantar polling shows that public confidence in the economy is at the lowest level in more than a decade. This is having a profound effect on the way people are acting. Kantar research shows a variety of ways people are changing habits in the wake of an uncertain economy:
- 54% of people are cooking at home more often
- 41% have decreased their fast-food purchases
- 31% report buying in bulk more often
- 38% say they are increasing visits to budget stores
Each of these data points indicates a significant shift in the way people think and act during inflationary times. This is an especially important trend to note for brands that are marketing eco-friendly and sustainable products. Despite people wanting to use environmentally friendly products, the majority now say they are favouring price over sustainability.
These are just a few examples of how attitudes and behaviours are changing. Without current data, brands can easily make missteps in their marketing. Even when companies have to tighten their belts and minimise costs, research is one place you can’t afford to cut.
For example, many companies have had to raise prices in light of supply chain issues and inflationary prices. Do you have a strong grasp of how price increases will affect your brand in today’s economic climate?
Leveraging your understanding of shifting mindsets
During times of change, consumer mindsets are often dynamic. As people’s needs, perceptions, and priorities shift, there can be wide swings in behaviour. COVID-19 was a case study on how retailers had to shift quickly to online, curbside pickup, and focus on sanitation in physical stores in a way they’d never had to do before.
You may have based marketing plans on traditional norms, but the emotional triggers used as foundational elements may no longer be valid. It can also be dangerous to make assumptions about behaviour. In the fast-moving consumer goods (FMCG) industry in certain regions, we found that most consumers are choosing cheaper products, but not in every category. While lower prices may be the right strategy for marketing some products, it could be a mistake in others.
Facing the potential for recession and stagflation
“For many countries, recession will be hard to avoid,” wrote David Malpass, President of the World Bank in its latest global economic forecast. “Even if a global recession is averted, the pain of stagflation could persist for several years.”
Either way, this has the potential to change the consumer dynamic for some time to come. Brands that have a handle on how people evolve their habits will be best positioned to survive and grow even during an economic downturn. Historically, companies that did not cut back on their market research and marketing activities bounced back faster and better than their competitors.
In many cases, companies that reinvested during downturns saw significant share gains both during and after recessionary periods. Conversely, companies that cut back saw substantial share losses to competitors, which they were unable to recover as the economy stabilised and grew.
The past is not always an indicator of the future
Today’s inflationary cycle is new to an entire generation of consumers. People and companies haven’t experienced this kind of economic turmoil in several decades and the lingering effects of COVID-19 continue to play a role in the way people think and act.
While we may be able to generally assume that an uncertain economy will have people cutting back on discretionary expenses, that may not be true across all segments. At the same time, the pandemic caused fundamental shifts in consumer behaviour that may make previous inflationary cycles a poor indicator of future intent.
In other words, it really is different this time around. So, the lessons learned during previous downturns may or may not be applicable now. Organisations need a strategy to assess consumer behaviour in today’s environment. One place to start is with your own customer data. Brands should look for trends and patterns and may need to reassess key metrics.
Another is accessing real-time data to feed into ever-evolving central marketing and business strategies. Kantar can help you collect data with speed and scale (without sacrificing quality) - ensuring you stay current on what’s happening in your industry. Reach out to our experts to learn more.