Despite a surge in consumer sentiment at the start of the year, recent bank runs and continued inflationary concerns have caused an unfortunate boomerang effect back to a sentiment of uncertainty. With the economic outlook for the rest of the year unlikely to be positive, consumers are settling in for a prolonged high-rate environment. Now more than ever, it’s critical for brands to support and guide their customers, including helping consumers reach their goals, putting all of the turmoil in perspective, and offering stability. So here are three tips that can help brands thrive during economic uncertainties:
1. Empower consumers to reach their goals
According to Mintel consumer data, consumers are prioritizing financial wellness with their top three goals around money: saving, improving credit scores, and paying off credit card debt. These goals can be challenging in good economic times, let alone with the unpredictability of this year. Brands can play a significant role in helping consumers stretch their dollars further and make those goals easier to attain, using tactics like improved messaging and product innovation to emphasize value and convenience.
Financial services providers are especially key to making consumers feel supported as inflation persists, with 68% of consumers agreeing that support from their bank is important to help them manage rising prices. Taking a closer look, this support is especially important for Black and Hispanic adults, who over index for agreement at 82% and 76% respectively, meaning a targeted approach with culturally relevant details is an incredibly important element of supportive outreach.
2. Understand the power of nostalgia
Nostalgia is a powerful emotion and during times of uncertainty reflection for better times often takes hold. As tracked through Mintel’s Trend Throwback (client-only link), the cycle of nostalgia has shortened with technology advancing our concept of time and putting our attention spans in a tizzy. The challenge with nostalgia is that our perception of good times are often in balance to extreme crises, which can leave an altered perception of reality. For example, 2019 can now be viewed through a nostalgic lens, as it was the final year in a pre-pandemic world. Yet, a look back at Mintel’s annual Global Trends for 2019 reveals a different story of happiness. In 2019, Social Isolation was an annual trend and occupational burnout (client-only link) was officially designated by The World Health Organization (WHO) as a medical condition.
Despite these challenges, when compared to the pandemic, 2019 is going to have nostalgic associations. Brands like Everlane have even leveraged that, with pricing models reflective of 2019 prices.
So how can brands manage stable associations, regardless of the highs and lows that inevitably shape our perceptions?
3. Offer stability through customer experience
A huge element of stability that brands can offer is customer experience. In particular, 18-34 year old, higher-earning consumers cite a high priority toward customer service in selecting a financial services provider. Especially during times of economic uncertainty, the last thing a customer wants to worry about is a lack of brand help when an issue comes up, so a consumer that finds themselves faced with ongoing problems will be quick to switch to a competitor. While acquisition strategies this year still favor quantifiable metrics like high sign-up bonuses, those non-numerical, experience-based variables will be key to retaining customers and building brand loyalty.
Mintel’s Redefining Adulthood Trend (client-only link) also offers another path forward. The trend highlights a shift away from adulthood being defined by major life stages, focusing on adulthood being shaped by the smaller, everyday moments, aka the chores of adulthood. Brands can respond to this mindset by catering to consumers’ everyday habits, not just the big life stages. The brands that are a stable source of comfort and value can maintain that reputation when a crisis inevitably emerges.
What We Think
Moments of crisis exacerbate systemic issues and bring them to the forefront. While there are greater forces at work with some of those macro influences, it’s important for brands to focus on what they can control, and be proactive in taking care of customer needs. Loyalty and value are key themes of a customer retention strategy that will weather the storm this year.