Yahoo’s analysis of UK consumer data shows the full extent of the pressures on people’s finances, and reveals how brands can best respond to successfully navigate the year ahead in 2023.
As we enter 2023, and the sparkle of recent festive celebrations fades a little, it is obvious that the UK, along with many other major markets, faces challenges ahead – not least the cost of living crisis biting into people’s incomes.
According to YouGov, rising costs mean that 66% of Brits have reduced non-essential spending, more than four in 10 have cut back spending on “essential household items”, and a quarter of UK adults have less than £100 set aside in savings. Yahoo search data also reveals searches for “food banks” have increased by +17% in the past three months, and searches for “warm banks” are up +49%.
It is also apparent that advertising budgets are under pressure as businesses look to make savings too. Yet all the effectiveness research says that brands who continue to advertise, and innovate during downturns, will perform better in both the short- and long-term.
This was highlighted at the recent EffWorks Global 2022 event in London, where Les Binet, group head of effectiveness at adam&eveDDB, offered a strong reminder of why keeping brands strong is the best defense against economic headwinds. Other key messages included the need to better understand sales attribution, and the positive impact of optimizing marketing budgets rather than slashing them.
With this in mind, brands that focus on understanding consumer needs through the lens of value are set to prosper.
Deliver value and shopability
Yahoo’s research into consumer motivations demonstrates that 66% expect retailers to freeze or offer cheaper prices, 69% are shopping around for lower priced or own label brands, and 48% are looking for deals and discounts.
In this context, it’s important that brands work to find ways to help consumers manage the financial and emotional impact of the cost of living crisis. That includes the clear opportunity to capitalize on emerging tech to develop novel ways to help consumers find value, tailoring how they allow them to get more bang for their buck.
“Budgets and priorities will vary significantly by household, and brands must tailor their communications to offer relevant and meaningful value to each audience,” says Carina Moran, head of strategy, UK at Yahoo.
While consumers have adopted a mindful and price-conscious outlook, and price, ultimately, is more important than ever, when looking to shop, consumers no longer follow a traditional path to purchase. A typical shopping journey now involves both bricks and mortar and digital interactions, regardless of where the sale is ultimately made.
Moran advises: “As we move into 2023, brands should aim to facilitate both product discovery and purchase by showing up in unexpected places, capitalizing on intent by integrating frictionless point of sale mechanics into each consumer touchpoint.”
For example, businesses can work to improve the quality of at home shopping by innovating with new tech such as artificial intelligence (AI) and augmented reality (AR) to familiarize consumers with products that they cannot physically access.
Helping consumers to escape
Innovation may also present an opportunity to help keep people entertained within the home. Modern day escapism is underpinned by relaxation, and the need to unwind. However, it can often cost money. Yahoo found that financial constraints have led 66% of consumers to recently cut down on at least one external leisure or entertainment activity, choosing instead to stay indoors.
One thing that is clear is that this at home escapism varies by age. Millennials and gen Z immerse themselves in gaming and podcasts – while more traditional activities such as reading and radio are important among gen X and baby boomers.
Therefore, it’s vital that brands understand how and why an audience is consuming escapist content, and then work to integrate themselves in a way that feels organic. Curation, participation and gamification can each be used to deliver “light relief” content designed to engage the consumer in a way that turns them from a passive audience into an active participant.
Enter the ‘videoscape’
As technology advances, video will become an even more effective way for consumers to become immersed in a brand’s world.
The challenge will be to seamlessly capture the audience with the best format and message depending on the platform they are viewing on. No easy task given that in the past 12 months the fragmented “videoscape” has grown to the extent that the average person in Western Europe had 9.4 devices and connections in their home in 2022, compared to 5.6 in 2018.
To achieve this level of connection, brands can focus on going back to basics, and landing a really clean video strategy across touchpoints. Enhanced interactivity means that video assets can also work hard to drive conversions, with Yahoo’s studies showing that video content is twice as effective at shifting lower funnel metrics/purchase intent than non-video creative.
For brands to succeed in 2023, it has become clear that they must innovate while not losing sight of the basics. A channel centric planning process must become a thing of the past, with an audience-first approach taking central focus instead.
Read more about Yahoo’s 2023 Consumer Trends here.
Source By https://www.thedrum.com/news/2023/01/19/understanding-2023-s-big-consumer-trends-convenience-value-distraction