4 ways brands can stay relevant as inflation eats disposable incomes

Inflation has broken into people’s top three concerns / Photo by Towfiqu barbhuiya on Unsplash

With rampant inflation hurting incomes across the board, Kantar has released a new report exploring how marketers can minimize their exposure by addressing the loss of comfort, peace of mind, security and assurance characterized by rising prices.

An erosion of our standard of living

  • In the US consumer price inflation stood at an eye-watering 7% in December 2021 according to the Bureau of Labor Statistics – the highest rate it has recorded since 1982. There’s been more of the same since.

  • Driven by surging prices for energy and vehicles, the skyrocketing cost of goods has raised fears that inflation could be here to stay and is not just a short-term byproduct of present crises.

  • A Conference Board survey of global chief execs found that 55% were resigned to rising prices through mid-2023 and beyond.

Inflation is a growing concern

  • Unaccustomed to high levels of inflation, consumers are responding with mounting concern with worries over rising prices (33%) now greater than either healthcare (26%) or mental health (23%), according to a Monitor survey.

  • Breaking into people’s top three concerns, inflation was beaten only by the economy and Covid-19 – both cited by 41% of respondents.

  • Kantar closed its gloomy prognosis with four pearls of wisdom for brands to leverage to get themselves out of a tight spot, principally by leveraging equity and scale as consumers seek comfort and familiarity.

  • It claims that a financially insecure world makes scale and brand equity more important than value, providing an opportunity for brands with the clout to reduce risk in the eyes of consumers.

Mental wellbeing is paramount

  • Price as the yardstick by which brands define their competition is likely to give way to mental wellbeing considerations as anxious consumers yearn to be put at ease.

  • Citing mental health as a greater challenge than consumer confidence, Kantar warns that consumer tolerance for stress and irritations, no matter how trivial, is now at ‘breaking point.’

  • Brands are thus advised to look again at their services and experiences to cut out unnecessary annoyances.

Avoid knee-jerk discounting

  • Cautioning against a race to the bottom, Kantar recommends brands find ways to deliver greater value now, or risk ceding market share during an inevitable recovery.

  • This is best achieved through ‘meaningful and significant’ innovation, as opposed to prioritizing investment over slashing costs.

The importance of certainty

  • During times of turmoil, the value of certainty is amplified, prompting Kantar to call on brands to deliver guarantees by shouldering some of the risk burden previously borne by consumers.

  • Offering new forms of warranties and guarantees is held as being the surest way to win over increasingly cautious consumers and spiralling ad prices.