- Household budgets are under pressure
Given everything that’s happened this year, people in Spain are being especially careful about what they spend their money on. Kantar research in mid-2020 found that half of the Spanish population had already seen their incomes affected by COVID-19, and a further 26 percent were expecting to face leaner times in the months ahead. Only one in five households felt their income was safe. For brands, this does not necessarily mean they need to drop their prices, but they do need to demonstrate that they represent good value for money because they offer benefits (both practical and emotional) that consumers feel justify the price tag. More people are paying attention to prices when they shop, but they are willing to pay a premium for something special. In fact, 44 percent of people say they still prefer to shop at the most convenient store, even it costs a little more.
2 Consumers feel they’re being pulled in two directions
Having lived through the trauma of COVID-19, many people are emerging with very different priorities and life goals to those we had a year ago. Lockdown has led people to reassess their lifestyles, work-life balance and what makes them truly happy. That’s led to a widespread sense now that “life’s too short” to worry about small problems that don’t matter in the grand scheme of things. Now is the time to focus on what really matters – family, friends, shared goals. Yet at the same time, there’s also “let’s live for the moment” driving impulse purchases for things that simply make people feel good right now, because anything might happen tomorrow. This tension consumers feel between indulging and focusing on what’s truly meaningful is something brands can help them navigate. Brands must be attentive to how sentiment is shifting and help people feel good about the decisions they’re making.
3 The value of agility has been laid bare
If any brand needed proof of the need to think fast and be quick on their feet, they have had it in 2020. The pandemic has turned upside-down accepted norms about the way people work, learn, exercise, socialize, shop, plan and generally live their lives. In the eye of the storm, agile brands were ready to redirect resources, make sacrifices and do whatever was necessary to help. Their efforts will be remembered, whether it was switching production to masks and hand gel, offering free coffees to healthcare workers or making it easier for vulnerable people to get household essentials. What’s important for brands to remember once this is over is that there will one day be another crisis. Brands need to be prepared – not with a prescriptive action plan, but with the flexibility to adapt to pressures that can seemingly come from nowhere.
4 Experiences need to live up to brand promises
Brands are competing not just for a share of people’s wallets, but a place in their hearts and minds, and that is the result of every experience a brand provides, across multiple touchpoints, from a webchat or in-store consultation to a trial of a product or an attempt to make a return. There is a powerful relationship between the way consumers experience a brand and its financial performance, but too often there are big gaps between the expectations brands create through their marketing communications, and the real, lived experience of the consumer. By failing to meet or exceed people’s expectations, brands risk losing sales, loyalty and their reputation. This means that a focus on the consumer must begin at the very top of a business, and organisational structures put in place that ensure that brand promises and consumer experiences are in perfect alignment.
5 Brands need to be willing to take a stance
In a world of high-profile social activism, consumers increasingly expect the brands they make part of their lives to take a position on big issues. They want “their” brands to reflect, support and defend shared values, and that means brands can no longer sit on the fence, or keep quiet because they don’t feel it’s their area. But taking a public position on a potentially contentious issue is not without risk. Even if brands have good intentions, there’s the danger being accused of opportunism or of misreading the public mood. Sharp, timely consumer insights are an essential part of getting a brand response to social issues right, through a range of actions, big and small. Brands should step up and contribute to a greater good; inaction will bring about no good at all.