Post-pandemic optimism at the dawning of 2022 was short-lived as Russia’s war in Ukraine stole the headlines. Like a wildfire, the impact on energy prices, inflation, and the cost of living spread around the world. Yet the bleak picture isn’t unshakeable – 2023 can be a year of renewal and resilience for people, planet, and profit. But only if we make green shoots grow among consumer communities.
As 2023 dawns, a miserable greyish pallor has descended over the mood. Covid, Russia’s invasion of Ukraine, the ensuing energy crisis, and now the cost-of-living crisis have all conspired to make us feel pretty damn doomed. Worldwide, the IMF is forecasting the weakest economic growth in twenty years, aside from the 2008 financial crisis.
Having grown weary of constant negativity, consumers are re-focusing on what value means to them, and spending more intentionally as a result. In response to price increases across all categories, holders of the purse-strings are forced to continually re-evaluate their priorities. Many are taking a laser-like approach to cutting household budgets.
Habits are likely to change as consumers analyse what they choose to do, versus what they need to do. This hierarchy of habits-versus-needs will push many to try cheaper brands or go without certain products entirely. Consumers are exploring, comparing, and removing items from their carts to ensure their needs for today and goals for tomorrow can be met.
But the frugal feeling – making sure we only buy what we need – doesn’t have to be all bad. Economic change is already pushing the green agenda by shifting how we use and value products, as well as our energy supply. Of course, the need for clean energy is writ large across the climate change statistics reported daily: the world is losing 1.2 trillion tonnes of ice each year, CO2 is at its highest in 2 million years, and the past decade was the hottest in 125,000 years, says Earth.org.
So, as brands seek to deliver value for money for consumers, they can also do themselves a favour by streamlining their own production lines, rationalising processes, and taking a greener approach to marketing and advertising through movements such as Ad Net Zero.
Brands are opposing the idea that eco-credentials need to result in price increases, with examples of local sourcing and use of the circular economy potentially lowering costs. More than a third of companies surveyed for WARC’s Marketer’s Toolkit 2023 expect to continue with their sustainability objectives despite the economic situation, while 35% foresee only “some small compromises.”
The next 12 months will be intensely competitive as brands seek to gain new or retain existing consumers through value-for-money propositions. But many won’t be taken in by the trickery of price promotions. By dealing sensitively and collaborating with partners to find ways to battle the downturn, brands will not only serve themselves, but also the people that buy their products – and the planet we all inhabit.
Although audience fragmentation has been a long-term concern for marketers, the digital age presents an opportunity to bring people together by meeting them where they are; and providing an antidote to the sombre mood.
And as consumers strive to shake it off, they are seeking out brands that support charitable initiatives and community-based projects which play into their own interests and needs. In the next five years, Mintel predicts that brands will increasingly cater to the niche characteristics of loyal consumers, fragmenting large, legacy brands into more targeted units.
Already, 41% of UK consumers agree that direct-to-consumer brands have a more personal connection with customers than traditional brands. And in future, a new era of social signalling will emerge as consumers become more deeply intertwined with the ethics of the brands they are loyal to.
What people wear, eat and drive won’t just signal economic status, but will be an outward communication of their mindsets and principles. So, when brands find themselves navigating contentious issues, they can look to the values of the consumer communities they serve.
Hitting the reset button
Just like the natural pattern of recovery after a wildfire – where the land, plants, and wildlife work together as a biodiverse ecosystem to return to a state of relative stability – consumer communities will create an ecosystem of mutual support to enable the recovery of our ravaged economy.
It’s like hitting the reset button: it may not look the same as it did before, but it will thrive once more. In this way, forests will, in time, heal themselves.
Let’s hope we can do the same.