News and Insights
What the cost of living crisis means for brands and how PRs can help
June 22, 2022
With 2022 seeming to be the year of healing and growth after two years of crisis management, the resumption of everyday life brought back a sense of pre-2020 normalcy. However, with the culmination of supply chain issues due to Brexit, the economic disruption of the COVID-19 pandemic and now a raging war in Ukraine, it’s no surprise that the cost of living crisis has put basic socio-economic rights in the spotlight. We have seen a ripple effect amongst consumers, dishevelling buyer behaviours and causing serious strains for brands.
Why is there a cost of living crisis?
Since the economy reopened after months of global lockdowns, coupled with Brexit causing mass disruption, inflation has mounted to its highest rate in 30 years.
The return to normality saw a demand for goods and services as prices fell dramatically during lockdown and people found themselves saving money due to long periods of economic inactivity. Supply has been unable to keep up with the demand and this has resulted in an increase in prices.
Uncertainty surrounding the impact of the war in Ukraine is also causing pressure. The war has left humanitarian and economic certainty hanging in the balance. Questions about the true effects of the war are driving inflation further over concerns of supply chains.
While households across the UK are being affected by the current crisis, the poorest families in Britain are the ones being hit hardest by the increase in energy bills, with energy spending rising from 8.5% to 12% of their total household budget according to the Resolution Foundation.
The Bank of England has warned that inflation could reach 11% this year as the rising cost of fuel and even food puts further pressure on household budgets. With questions surrounding how long the cost of living crisis will last, consumers have no choice but to change the way they manage and spend their money, with many saying goodbye to their staple products and moving to cheaper alternatives as a result.
According to research conducted by BritainThinks, more than a third (38%) of shoppers say they have already started swapping their trusted brands for cheaper, supermarket value products. 19% say they will ‘definitely’ move to cheaper brands as the year progresses, and a further 28% say they will consider it. Only 4% of consumers say they will ‘definitely not’ swap their staple brands for cheaper alternatives.
How can PRs help their clients’ brands?
The importance of value
It is clear that value has never been so important as consumers try to find ways to save across multiple aspects of their lives. With UK ministers encouraging the public to opt for value brand products to manage household budgets, it’s important, as PRs, to communicate to the public the value of your client’s brand.
When consumers can find value in your client’s brand, they can in turn develop loyalty towards it, thus affecting brand perception. Your client’s brand values sit at the centre of its existence in any economic climate. However, during a cost of living crisis, distinguishing your clients from their competitors in the minds of consumers, and ensuring they meet the beliefs and values of customers, is essential in ensuring brand longevity and survival.
The power of making an impact
In order for brands to win people’s trust, they have to create meaningful experiences around their products and services. In PR, it’s our job to inject creativity, relevance and inspiration into the mindsets of existing and potential customers. Thinking outside the box and creating content that both disrupts yet remains relatable to multiple audiences, is critical in maintaining and gaining people’s trust.
In this, don’t confuse the word ‘impact’ with ‘big-budget’, even the smallest and simplest idea can have a meaningful impact and leave a lasting impression.
Listening is key
The last few years have been incredibly tough on people. Listening to and observing consumers’ buying behaviours and understanding their priorities will make communicating your client’s products and services not only easier but also more authentic.
Customer expectations are constantly changing and, with the uncertainty of the state of the world, PRs have to be reactive to the elasticity of the current climate and advise clients accordingly. Understanding what matters, and why, to your client’s customers will help shape brand messaging and, subsequently, perception.
How can we beat the cost of living crisis?
There isn’t one solution to ending the cost of living crisis, and unfortunately, this will likely be ongoing for some time. The repercussions of shutting the world down for two years, the ever-increasing struggle with trade due to Brexit, and now the ongoing war in Ukraine that we haven’t seen the full effects of yet, have clearly accelerated and exacerbated the current situation.
Most of our clients will feel the impact of this current crisis, and it’s our job to ensure that we are communicating our client’s brand value which will set them apart from their competitors and drive customer retention, as well as newfound loyalty.
Making brands famous is still at the core of what we do, and therefore we mustn’t compromise impact and creativity despite the current environment. Good ideas are there for the taking and getting cut through in a busy and loud market is only harder in times of crisis. Finally, and most importantly, there’s no business without its customers, and therefore listening to their wants and needs and observing their purchasing decisions will make meeting their expectations easier in this ever-changing world.
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