With the cost-of-living on the rise, consumers and businesses are making choices that could be considered more ‘sensible’ than the pre-pandemic halcyon days. The key to brand longevity during these uncertain economic times lies in the ability to connect with customers, understand their needs, and provide support when times get tough.
With expenses putting the squeeze on budgets, consumers and businesses are becoming increasingly savvy with their spending choices. The era of economic uncertainty is set to continue into 2024, challenging brands to adapt to shifting consumer preferences and financial constraints. In this turbulent landscape, the brands that will continue to thrive are the ones that genuinely listen to their customers and stand beside them during tough times.
One such example of a brand and agency partner understanding the assignment, is FCB and the work it has done with PAK’nSAVE, and more recently, Four Square. With people paying close attention to their weekly outgoings, it has become more important than ever for retail brands to communicate clearly what these brands offer above and beyond their competitors.
Matt Kingston, FCB Chief Strategy Officer, says one of the benefits of having a long-term relationship with a brand is riding the ups and downs with it and building brands that are resilient and rolling with the punches.
He says that in the case of PAK’nSAVE, its clear market position and focus on providing low food prices, put the brand in a strong position when Kiwis are feeling the pinch.
“Foodstuffs’ overall commitment to brand building over the many years prior to this moment has meant both of the brands we represent are in great shape to handle this situation. So our first point is: planning for market downturns should start well before the downturn itself,” he says.
Because of this planning, it’s mostly “business as usual” for these brands at a strategic level, however they have been looking at ways to “double-down” on ways the brands can help Kiwis save money.
Listening to customers is the cornerstone of effective advertising in these times. Brands that invest in market research, gather feedback, and truly understand the needs and preferences of their target audience are more likely to succeed. Tailoring products and messages to address these needs can build trust and loyalty.
“The best example of this is our recent work creating the Savey Meal Bot for PAK’nSAVE. This is a tech solution that uses AI to help Kiwis create meals through whatever’s left in their fridges and cupboards, ensuring no food (and therefore money) is wasted. This is a great example of activating a long-standing brand mission using the most relevant tools of the day,” Matt says.
As for external forces he sees as having an impact on the work Foodstuffs does in 2024, Matt says there are many things that affect the retail category and these are hard to predict.
“If there’s one thing the last few years has reminded us, it’s that trying to predict the future is a pretty futile exercise. When you’re on the receiving end of so many economic, social, and increasingly global drivers, you can tie yourself up in knots playing trend-spotter instead of marketer.”
In terms of external forces, he lists the usual suspects of interest rates, employment, and supply chain challenges that will impact people’s feelings about finances and purchasing decisions.
“You also can’t ignore the power of technology and – it has to be said – AI in shaping a range of opportunities, from automation, to uncovering strategic insight, through to unlocking new creative possibilities.
“But regardless of any one particular external force, our approach is to remain staunchly open to what’s going on in culture, and having the systems in place to both react and adapt to change when we need to, or better still,
use the conditions to create our own momentum.”
In terms of advice for other brands wanting to be considered during a cost-of-living crisis, Matt says it’s important to remember that while strategic fundamentals don’t change in a crisis, your exact tactics should.
This can be done by prioritising and investing in both brand marketing and finding smart ways to retail and creative ways to stay front of mind for your potential customers.
He says another piece of advice he would give to marketers is to remember that short-term success is not just about advertising the product and price messaging, although this is an important part.
“The cost-of-living crisis is a very real issue for the vast majority of New Zealanders, but the specific ways it manifests will vary.
“For many, it’s a price and cost challenge pure and simple. But for many others, it’s a crisis of confidence as much as a money issue. With that in mind we must think creatively about the levers we have to pull to unlock the permission people need to give themselves to spend with you over someone else.
“Things like guarantees and assurances, your ranging across different price levels, new and novel ways to bundle things together, and even things like the good-old returns policy can be the gentle nudge people need. While these things may look simple, and even a bit dull, with a bit of imagination you can elevate these types of things to a more exciting level.”
Matt also urges marketers to remember that people don’t lose their sense of humour in tough times. “Being sensitive doesn’t have to mean playing it safe. Taking the situation seriously shouldn’t have to mean taking yourself seriously.”
He stresses that standing beside customers during the hard times shows that brands are committed and means a lot.
“Brands that offer support, whether through financial relief, community engagement, or simply empathetic communication, are the ones that will be remembered and appreciated. These actions not only enhance brand reputation but also foster long-term customer relationships.”
Advertising in times of economic uncertainty demands a shift in perspective for marketers. It’s not just about promoting products but about adapting to the changing consumer landscape and demonstrating a deep understanding of their needs. With savvy spending expected to continue into 2024, brands that prioritise customer-centric advertising by listening and supporting their audience will find themselves better equipped to weather the storm of economic uncertainty in the future.
This article was first published in our December/January 2024 issue.
