With inflation pushing 3% and wages flat lining, what are the implications for brands? Our latest trends research into behaviour shifts reveals that more than 70% of people are making some changes already to their spending patterns with a further 7% expecting to do so soon.
It would be a reasonable assumption that this signals bad news for brand owners and retailers but, as always, the real picture surfaces the deeper we dig.
Almost half of people are only buying what they need, which is good news for staples and utilities, but nearly as many are cutting back on luxuries, which is a bit of a problem for big ticket purchases and non-essentials. Big winners are the retailer brands, discounters and entry level lines as a third are buying cheaper versions of the things they normally buy.
With a third of people saying they feel worse off than a few years ago, it’s not surprising that debt providers are potential winners in these inflationary times; 11% are putting more things on credit and 15% are dipping into their savings to pay for things.
Wherever your brand sits on the staple to luxury spectrum, you’ll be pleased to know that a fifth of people feel inflation-proof saying they haven’t made any changes and don’t plan to. But, how do you know if these people are your customers, consumers or shoppers and how do you position your brand to the people who are making changes? How will you create real growth not inflationary growth?
If you’d like to talk about how we can help devise profitable, sustainable strategies in these changing times, please get in touch.