As the country’s eyes turn toward 10 Downing Street today awaiting the contents of George Osborne’s red briefcase, consumers will be keen to hear how the Governments raft of financial plans will benefit them.
And with good reason. According to research published by Which? yesterday, 55% of consumers feel that their household is worse off now than in 2007, and 39% claim a decrease in household income since that time. Just under half of those surveyed (43%) say that they are coping with their current income.
The survey suggests that those worse off, unsurprisingly, are low to middle income earners, 57% of whom report lower earnings than in 2007. Also hit hard are 45-54-year olds, and, interestingly, women – 42% of whom claim to be earning less than five years ago, compared to 31% of men.
Worryingly, more than 25% of consumers say that they have had to dig into their savings to purchase items like food and petrol and even more alarming is that one in five consumers have gone into debt to be able to afford these everyday essentials.
But with 30% of consumers anxious about what the next financial year will bring, what can brands do to ease their concerns? Obviously value propositions and fair price points will be more important than ever in the coming year, but in times of financial insecurity brands that can make consumers’ lives easier will surely win market share.
Research conducted by Siegal + Gale, which will be revealed by Marketing Week in next week’s issue, suggests that it is simplicity, both in customer experiences and marketing campaigns, that is the key to reassuring customers and ensuring stable growth.
It is nothing new to suggest that people gravitate towards trusted or well known brands in times of tightened budgets, a trend seen last week in Britvic’s Soft Drinks Report which found customers are maintaining their recessionary spending habits and gravitating towards “staple brands”, but perhaps the success of these brand lies in their simplicity. Customers at least know what they’re getting.
Not only did the research claim that 87% of the UK population are more likely to recommend simpler brands, but it found that consumers are willing to pay a 5.2% premium for simpler products and services. A portfolio of the brands at the top of the simplicity chart also performed better than the FTSE, Dow Jones and DAX indexes, showing simplicity really can pay.
So as we digest the most anticipated budget for a long time, smart marketers will be thinking about how they can build transparency, simplicity and usefulness into their brands to build back consumer confidence.