With constant warnings of an impending recession and inflation continuing to impact prices on everything from rent to food, things are no longer the norm, they’re the focus of attention.
With economic changes occurring almost daily
consumers are reacting. With the cost of goods and services reaching all-time highs, will spending habits change in the near future? For business leaders, it’s time to pay attention and make sure your brand is prepared.
Expenses are taking another direction
Data from HubSpot and other surveys indicate that the possibility of a recession has affected spending habits across all demographics. Continued warnings of a US recession show that 30% of respondents during the summer of 2022 shopped less and paid more attention to how they spent money compared to previous months.
At the start of winter 2022, 30% of
respondents said they made few or no purchases due to recession warnings, while 24% were more conscious about spending money than in previous months. The number of respondents whose spending was not affected by the news also fell from 17% to 13%.
What does all this mean?
For brand leaders or marketers faced Argentina Email List with the challenge of getting products off the shelves, it’s time to get creative . They need to stay in touch with those who are tightening their wallets but can still afford to purchase items within their new budget or have a decent return on investment. Now is the time to consider discounts, promotions, deals or offer freemium marketing to provide experiences these consumers can’t resist.
Making our way through the new budgets
Brands need to take into account the significant shift in consumer spending that can occur during the first three months of a recession, or as the cost of goods and services continues to rise. 64% of consumers surveyed over the summer said they would reduce or continue to reduce their household budget. Interestingly, this percentage has dropped to 57%, with 27% saying their budget will stay the same and only 15% saying they will increase it.
Brands need to consider products that are key to people maintaining some semblance of their lifestyle. But a set of surveys shouldn’t be the sole basis for completely revamping the entire marketing strategy. Necessities should be the current focus rather than luxury or high-priced items.
There were many reasons for consumers to
curb spending in recent years, including the pandemic, concerns about recessions and changes in quality of life. Consumers surveyed in the summer and winter indicate that essential items, such as basic food items for preparing meals, rank first, followed by rent, mortgages and housing bills. Personal care essentials come in third, and finally, healthcare and medications.
Although leisure, shopping and other
non-essential items and services are not completely off the list, people are spending more on digital or online leisure rather than going out. However, 9% of respondents are still going out to bars and restaurants and 16% are spending on clothing and apparel.
It’s time for marketers to build meaningful connections
with customers to improve their loyalty processes. This means paying attention to what consumers buy and how they buy it. Recessions create bargain hunters, so it’s crucial to capitalize on these consumers. Instead of pushing them to other brands, create opportunities where the brands they love are competitively priced. This reinforces brand loyalty and meets their needs.
When will things get back to normal? Who really knows? This is a great opportunity for marketers to re-evaluate their strategies and focus on the tried-and-true products that consumers know and love. Ramp up content marketing, offer tiered options, and stay the course. Set realistic goals, invest in what’s working well, pay attention to the competition, help consumers save money, and focus on new sources of profitability.
