SUMMARY: Consumers are quitting high-paying jobs in record numbers to focus on the quality of life, and although they’re still shopping, they’re careful about what they buy. Right now, brands need to be empathetic in their marketing to communicate that they understand how consumer sentiment has changed.
People are quitting jobs in record numbers because the pandemic created obstacles to their employment but, at least partly because it nudged them to rethink the role of work in their lives altogether. Many are embracing career downsizing, voluntarily reducing their work hours to emphasize other aspects of life.
According to the University of Michigan’s latest snapshot of their mood, America’s consumers have suffered a “stunning” loss of confidence in recent weeks. Rising prices may yet have a greater effect on Americans’ willingness to shop, eat out and travel. At the same time, supply chain bottlenecks loom as large over the upcoming holiday season — the year’s most crucial test of consumer confidence.
“We continue to see a very optimistic consumer, certainly shopping with caution, and they’re wearing masks more and more across the country, but we’re seeing tremendous resilience in the consumer today,” Brian Cornell, Target’s chief executive, told analysts. Complaints about rising prices for homes, vehicles, and durable goods are at an all-time high, with consumers’ expectations for inflation over the coming year at levels last recorded more than a decade ago.
Brands that continue to market their products like nothing is wrong will be paying a huge price with consumers. “Consumers are noticing price increases on their favorite brands, and in a lot of cases, they’re either switching to less expensive alternatives or revising budgets to skip their favorite products.”
What can brands do?
1ne: Show empathy with consumers – Understand what they’re going through and ask, “how can we share their pain?”.
2wo: Find ways to take costs out of the supply chain – It might not show for a while, but you’re losing customers by raising prices.
3hree: Promotion = customers – Now is the time to offer coupons online and through FSIs.
4our: Help retailers understand what is motivating customers and what’s selling. -Become the category experts for them
5ive: Consumers buy what’s familiar to them; don’t hide – Don’t reduce ad and promotion budgets.
6ix: Challenge people in your company who believe your brand is immune to the changing consumer. Right now, that’s dangerous.
7even: Growth? How about survival! Brands that are focusing on growth are leaving themselves wide-open for competitors to come in a steal share.
Consumers are changing in perhaps the biggest shift in marketing since TV ads. Listen and prepare or perish.