From the advent of social, through the questionable promise of VR or NFTs, to the infinite possibilities of the metaverse, many have made their way from the edge of the tech world to the slides of an agency deck.
This isn’t to dispute their worth, but to reflect on the fact that for every presentation or panel about how to utilize the virtual reality of the metaverse, how many focus on the very real and current reality for consumers. The people who we talk to, track and temp. The people who buy products and services we advertise. And now, the people who are in the midst of the harshest personal finance crisis in a generation.
The reality can’t be underestimated. UK inflation has hit a 40-year high of 9.1%, driven by soaring food and energy prices, exacerbating the fall in ‘real’ incomes (after tax and inflation) Brits have experienced since 2021.
YouGov found half of all Brits say their financial situation has become worse in the last month, with one in five already struggling or unable to make ends meet. 5% are already saying “I cannot afford my costs, and often have to go without essentials like food and heating”, up from just 1% last year.
Efforts from Chancellor Rishi Sunak to tackle the crisis were labelled by the Think Tank Resolution Foundation as a “big but poorly targeted policy package” which ultimately will still “see a further 1.3 million people fall into absolute poverty next year, including 500,000 children – the first time Britain has seen such a rise in poverty outside of recessions.” So as purveyors of goods and services that we hope these same people will exchange their – increasingly restricted – disposable income for, it’s not a huge leap to say that we should take some responsibility and explore ways we can help.
Even if the human case weren’t enough, it’s worth noting that a third of Brits say they can mostly cover essential costs but don’t often have money for luxuries now. With that picture likely to get worse before it gets better, it’s worth considering how quickly your product or service could become one of those unattainable luxuries. The cost of living emergency is a significant crisis with no single solution. But here are some ways we might all be able to help.
B2B: less about cutting costs and more about adding value
It is crucial to hold fast during the crisis and avoid eroding or undermining your hard fought for brand equity. So where possible avoid price and promo strategies that reframe your product and its value in consumers eyes. When consumer confidence and disposable income rise again, you don’t want to be left behind.
Instead, consider other tactics as a business. Offering benefits or points for loyal customers who have long shopped with you shows that loyalty works both ways. Reducing charges for things such as delivery demonstrates that you understand that every pound counts and your willingness to go the extra mile. Or work with retailers and providers to offer free add-ons or savings with every purchase.
Consumer: less about short term pain and more about long term gain
If your prices go up or your products change (see the reported rise in ‘shrinkflation’) make sure you communicate with your consumers as to why, what it might mean for your business, and what it might mean for them.
If, for example, the issues in European supply chains mean you’ve started sourcing locally and therefore that might push up prices, demonstrate the benefit of that to communities and be honest about the impact – good and bad.
Consider other ways you might be able to help your customers save in the long run. Could you offer your product through a subscription service that ultimately saves them money, but also creates one less thing to deal with day-to-day? Are there small elements of added value you can offer, like gifts or free experiences to collect?
And think about those at the sharpest end of the crisis, who don’t know where their next meal might come from or how they’re going to clothe their families, and consider your scope for offering your help to charities, welfare providers and other partners who can put your products to good use.
Importantly demonstrate empathy with what might be happening, but don’t try to commercialise it or take advantage in any way. Our bullshit detectors are at their most sensitive in times of crisis.
Employer: less about pay and more about care
It might be easy to forget that some individuals within our companies will be feeling the impact of the cost of living crisis too. Those who we’re asking to immerse themselves in the metaverse so we look smart in front of a client, might likewise be worrying about their reality as any pay rises or bonuses are quickly outstripped by rising inflation.
So consider how you might be flexible and ready to work with employees on their needs.
For example some might feel the crunch on their home utility costs meaning they would rather be in the office, while conversely others might be less able to afford transport costs and so would rather work at home.
And consider how the benefits you offer to your teams might be able to help ease costs and pressure in certain aspects of their lives. Pay rises might not always be an immediate option, but there are other ways to ease their cost-of-living.
The future will come, the next marketing revolution will inevitably take hold. But here and now, we must consider the reality for our consumers, and the role our brands can play in tackling a very real crisis.