Summary
- Midway through 2023, many consumers are still reeling from financial pressures.
- Brands should work to be there for people in this critical moment, offering relevant, personalized content and deals that help them save money.
- If brands want to continue to compete for loyalty, they should make shopping, delivery, and payment experiences as easy as possible for their customers.
While economic indicators continue to throw up mixed signals, the most clever brands are out there creating opportunities that benefit their customer and themselves. Tricky times like this tend to be when greatness shines and iconic brands are built.
The Labor Department recently announced that inflation fell to 4.0% in May after hitting 4.9% the month before. This is encouraging news that can’t come soon enough for a general public still longing for relief from inflation and post-COVID economic malaise. But while inflation is beginning to ease, our latest data suggests some headwinds are still strong.
In studying the results of two new Vericast surveys — one consumer and one B2B — it’s déjà vu all over again. Just as we saw last year, brands are still grappling with rising costs and supply chain issues. And consumers are still hurting from significant economic pressures. Against this backdrop, we are seeing brand loyalty being severely tested.
Vericast’s February 2023 Awareness-to-Action Study reveals a rise in the number of consumers who are financially stressed and living paycheck to paycheck. A significant number of people are shopping closer to home and spreading out purchases. Some 35% report that they are switching to less expensive brands and/or buying more store brands to make ends meet.1
What should your brand be doing to seize the moment? Keep throwing consumers a life jacket via deals and discounts. Keep unifying, enriching and activating your first-party data to uncover opportunities. And keep using that data to inform the human side of that brand/consumer relationship. It will pay off later in the form of brand reputation and long-term loyalty.
Here are three things you can do to make your customers’ lives better while setting your brand up for success.
1. Make their dollar go farther
People are concerned about rising prices and they’re desperate to cut costs. Your brand should keep this in mind and address it head on. Start with coupons and deals. Perhaps brands will never love coupons as much as consumers do but opportunities exist to leverage first-party data so you can deliver the right promotion to the right person at the right moment.
As a discount tool, coupons may have limited upside. But they can serve as an incentive to introduce consumers to new experiences or to try new flavors or packages. That can be a win-win for both consumer and brand. For example, if I give you $1 off a hamburger you were already going to buy, all I’ve done is lowered the price. You’re grateful but the business gains little or nothing. On the other hand, if you are a frequent diner at my restaurant and I send you an invite for a free cocktail with purchase of an appetizer or a buy-one-get-one entrée on the weekend or after 5 pm, that might surprise and delight you and open up new avenues for you to spend more money with me (business win) while you get a new, low-cost-to-enter experience (consumer win).
Most of our coupon-oriented customer data points for 2023 are holding steady from 2022. For example, 67% of respondents agreed that, “With the current economy, coupons and discounts are more important than ever.”1 Coupon redemption saw the first uptick in roughly 10 years for a brief period in Q1.
We are continuing to see a rise in the popularity of private label and the trend shows no sign of slowing. In the April 2023 Vericast Industry Survey, some 76% of surveyed grocery retailers saw their private label brands grow in dollar share vs. the previous 12 months. Some 55% said they expect to broaden the private brand categories promoted in upcoming circulars.2
New private brand launches, dedicated campaigns, increased assortment and coupon offers have helped add fuel to the private brand fire in recent months. Follow that template to success.
2. Make it easy
With loyalty reeling, price and convenience matter more than ever. People are doing more online looking, they are considering subscriptions for some repeat purchases and are opting for discount stores when it saves them a few bucks. Come to the table with a rich, convenient omnichannel experience — from shopping to purchasing to paying — so consumers can feel good about their decision.
If consumers are wanting to get creative with flexible payment options — and they definitely are — your brand should too. We’ve seen a significant increase in the number of people who say they are looking for more ways to finance purchases and delay payments. In our advertiser survey, it spoke volumes that respondents ranked “Increased use of alternative payment methods” as the #1 consumer behavior change that has affected the way they market to people.2
3. Make it personal
A rising number of people say they have become less brand loyal as of late. Some 44% — and 53% of millennials — indicate they are willing to bolt for another brand if you don’t find ways to reward their loyalty.1
If you want loyalty, be there for people when times are tough and they’ll remember you later. Give them more than hype. Be useful. Educate them about your products and your industry. Inspire them to do more with what they’ve got. And glean every insight you can from your data so you can personalize content to feel relevant.
On that note, people expect something from all that personal data they’re sharing so be sure to make good on your end of the deal by creating great shopping experiences, personalize only with great respect for privacy and give the consumer control over how their data is used.
In our new consumer survey, we saw a 4% rise (to 50%) in the number of people who agreed with the statement, “Retailers need to provide more personalized promotions based on my purchase habits and interests.”1 Fortunately, brands seem to be on track to deliver. In our industry survey, they tagged two objectives they said were very important to them in 2023.2
- 90% said this was important to them: “Using advertising that is targeted, relevant, personalized, and data-driven”
- 88% said this was important: “Using strong and relevant promotions & discounts”
One final word on this subject: We would be remiss if we didn’t mention the looming impact of artificial intelligence, which stands poised to transform personalization in ways we never imagined.
Conclusion
Times are tough for many people. By being there for them — and reminding them we’re all in this together — your brand can pave the way for a brighter future and a mutually beneficial long-term relationship.
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