Charlie reveals how the nation is reacting to mounting economic challenges and how brands could respond to their needs.
Recognising the needs of consumers equips brands with the tools to connect with audiences authentically and with empathy. Knowing how the nation is reacting to the economic challenges they face can inform brands on how best to provide their customers with solutions.
Charlie Makin, the Managing Director and Founder of Pintarget, a Location Marketing Agency part of the What’s Possible Group, has put together a report to take the nation’s pulse and measure how consumers are reacting to the economic challenges they are facing.
Consumers’ concern over the energy price cap and inflation may lead to several knock-on effects on how they spend their money.
The research asked consumers the same four attitudinal questions across May and July. They were asked if they have been worried about paying their home energy bills and how much personal debt they take on in the remainder of the year. They were also asked how much they expected to spend on luxury items and treats over the next six months. Lastly, the consumers were asked if they had been searching for alternatives on their monthly ‘essential’ items.
In May, the first report revealed that 61% of people were worried about paying home energy bills. The consensus is that little has changed since then. However, due to warm weather and the promise of government assistance with paying energy bills, there was an increase in the number of people who were ‘not very worried’ about paying their energy bills.
Charlie expects that while consumers might have been slightly encouraged and found better ways to cope in July, there could be significant changes to the consumer outlook when the price cap is altered in October. With two-thirds of the population worried about paying energy bills and a quarter being ‘very worried’, Charlie offers some brand advice.
“Our view is that brands need to be empathetic, but not try to scare consumers. Smart brands need to be on consumers’ sides. This is an unprecedented territory on the back of three pretty tough years. A lot of consumers will be making choices they haven’t had to make before,” Charlie said.
Charlie cautions that it’s not only the revision of the price cap that brands should be aware of. He says the next 18 months could be hard on consumers due to a perfect storm involving more energy price cap revisions, the rise in interest rates, mortgage rates going up, and the appointment of a new prime minister.
With the knowledge that most consumers are worried about how much energy may cost them in the near future, brands should prepare for changing consumer behaviour. There is a real chance that consumers will be switching brands.
Although many are concerned, some consumers believe they won’t be taking on any debt. On the upside, UK households saved an extra £190 billion during the lockdowns. Some consumers, therefore, have more disposable income – but are looking to get a bang for their buck. In fact, 69% of the nation says they are cutting back on their luxuries or treating themselves. And 61% of people searched for cheaper groceries and other alternatives to their essential spending.
“For challenger brands coming to the marketplace who have a strong consumer-focused proposition, this is a really big opportunity,” Charlie said.
With few brands messaging from an empathetic perspective, Charlie believes now is the time to begin tailoring messaging and targeting the right consumer groups with the right messaging by October. Alternatively, brands can target groups that feel less affected by the energy crunch with different kinds of advertising.
“I think one important thing in this period is for brands to really understand their consumers. They should get into some of the granular data on who their highest value customers are. What they’re likely to be doing, and what their attitudes are,” Charlie said.
According to the report, mid-aged families seem to be the most concerned at the moment. Charlie cautions brands targeting young families; the last quarter could see that cohort significantly cutting back on gratuitous expenditure. They will be budgeting to make it through to Christmas.
Charlie’s main advice for advertisers during this time: