One could argue that the current tough economic climate mirrors the aftermath of the 2009 recession and yet, surprisingly, marketers appear to be reluctant to adjust their strategies to appeal to a more cautious consumer
Society is becoming increasingly distrustful of political leadership. This is being manifested in the rise of populism in the US, triggered by the presidency of Donald Trump, and locally in the rise of civic activism fuelled by frustration in the absence of equal opportunities for all. The latter is demonstrated in the “fees must fall” protests and the escalating land repatriation debate.
The increasing suspicion is not only seen in protests against governments, but has also trickled down to consumers’ interactions with brands. The “foresight effect”, examined by Olega Urminsky and Adelle X Yang of the Chicago Booth School of Business, shows how economic recession affects consumers’ spending patterns. The study asserts that during times of uncertainty consumers adopt a cautious mindset towards their purchases and brand interactions.
Local optimism encourages consistency in brand and purchase decisions while local pessimism tends to lead to variety and shifts in those decisions.
The concept provides a new perspective for brand strategy during tough economic times. Market leaders can’t assume that consumers will remain loyal to familiar brands, and brands will still need to find new and innovative ways to source growth.
The question is then: how do we convince cautious consumers to buy into our brands when they are pessimistic and seeking novel options and solutions?
In our view, brands that actively respond in targeted and sustainable ways will thrive in this complex environment. Ways brands can do this are by adapting their messages to meet the temperament of the community or by solving a challenge faced by the society in which the brand operates.
During times of uncertainty, it’s imperative for businesses to offer value beyond their products and services. This can be achieved within the business operating model. For example, a publishing company that produces educational material could build consumer confidence by providing solutions to the textbook delivery issue by initiating deliveries to affected schools.
The following are three key approaches from Amazon that marketers can use as a guide to engage with cautious consumers successfully.
1. Does your brand make the consumer feel secure?
Does your brand instill peace of mind? Consumers are no longer passive bystanders. Delivering on your brand’s attributes consistently creates a feeling of trust and security.
We see this in Amazon’s response to the resentment first-time shoppers conveyed towards the “register” button on the company’s website. Their users related negative experiences of being pestered by marketing messages once they registered, and Amazon acknowledged this feedback. It removed the button and replaced it with a “continue” button. According to an article by Jared M Spool, titled, The $300 Million Button, changing the name of the button increased the site’s annual revenues by US$300m.
2. Does your brand share similarities with the consumer?
People respect and admire brands that intuitively deliver on expectations. This can only be achieved if brands have aligned values and interests with consumers that go beyond the product or service. In an article titled Study: Majority of People More Loyal to Brands that Care About Them, Giselle Abramovich argues that 79% of consumers say brands have to demonstrate that they understand and care about them before they will consider purchasing.
Amazon aligned its packaging with the concerns of environmentally conscious consumers by introducing “frustration-free packaging” that is made of recyclable cardboard and reduces the amount of packing materials used.
3. Is your brand consistently sincere?
We tend to trust brands we can connect and forge “human” relationships with. Such relationships are built on empathy and honesty, and so brands that are “felt” are often trusted.
Amazon achieves this by striving to be customer-centric at every touchpoint, operating a “no fuss” delivery system and ensuring short turnaround delivery times and a simple return policy. A more recent innovation is its “dash button”, which monitors consumers’ consumption behaviour and automatically replenishes used items by sending replacements directly to clients’ homes.
Building consumer confidence in brands must be the foundational objective for innovation. This will result in continued consumer relevance and, more importantly, will gain the confidence of prudent consumers.