Almost a quarter (24%) of consumers plan to spend less across six key sectors: travel, luxury, retail, automotive, technology and financial services.
This is according to new research from RAPP and Code (part of Omnicom Precision Marketing Group). Two years of a global pandemic, economic uncertainty and now macro-level global events have unsurprisingly caused consumer behaviour to constantly shift, making it hard for brands to keep up. Now as confidence hits rock bottom, brands are dealt another blow.
The research, which was conducted as part of RAPP Group’s annual barometer of consumer attitudes, surveyed 1,000 individuals to find that as household finances are hit hard, consumers are becoming more selective of where they spend their money. In fact, the survey found that more than three quarters of consumers (77%) say brand values are important when choosing a company or brand to shop with. This figure rises in the 16-34 age demographic to 83%.
Tackling climate change alongside stances on social and political issues are bound to have an impact on how consumers view brands. Interestingly, 45% of respondents cite ‘convenience and clarity’ as the number one brand value (up from 37% 12 months ago) adding credence to the notion that it should be what brands focus on in 2022 and beyond.
When it comes to individualisation, consumers noted that travel, retail and luxury sectors are not hitting the mark when it comes to delivering individualised marketing communications. In fact, these sectors have struggled to perform in comparison to the previous 12 months. When asked which sectors are delivering individualised communications, consumers perceptions of retail plummeted from 33% to 18%; luxury dropped from 10% to 6% and travel fell from 12% to 9%.
However, in spite of the ongoing sense of impending doom, 59% of consumers surveyed say they would spend more money with a brand that treats them as an individual – something which still rings true after 12 months, when the figure was 57%. And crucially, more than a third (34%) would spend 50% extra with a brand that treats them as an individual. Most notably, shoppers aged 16-34 are more than twice as likely to spend more money with a brand that offers experiences made for them individually than those aged 55+.
Due in part to rising inflation levels and living costs, shoppers are spending less and saving more this year which poses a challenge for brands looking to thrive in already challenging circumstances. Travel (34%) and Luxury (35%) are still the hardest hit sectors which shows that though there might have been a positive shift in the last 12 months, this sentiment has dropped back to where we started.
What is clear is that brands should take time and invest in understanding the motivations and behaviour of individual customers as well as knowing them in the context of time. Perhaps crucially, brands need to understand and action the right communication in the right way – from social commerce, email bulletins, print advertising etc., find out where your audience is and meet them there.
Jessica Evans, new business director at RAPP says: “Inflation skyrocketing and the war in Ukraine have taken their toll on consumer confidence. Our findings show that consumers want brands to go the extra mile to secure their loyalty and spend in these challenging times.
In order to survive, brands must focus on what consumers are asking for; Convenience and clarity. Adapting your brand communications based on these wants and needs, is something marketers simply can’t afford to overlook.”
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