WITH headlines warning us that the cost of living is rising at an alarming rate, there’s no doubt that we’re in for a period of belt-tightening.
Rocketing fuel, energy and food prices are going to be with us for the foreseeable future, leaving many people with little spare cash to spend.
In these circumstances it’s no surprise that brands which champion value will do well. There is already evidence that shopping habits are changing. Kantar reports are already showing that consumers are switching where they shop with Aldi and Lidl recording their highest market shares.
But new research from the Chartered Institute of Marketing (CIM) reveals that whilst value is important, consumers may not behave exactly as expected as money gets tighter.
The survey reveals that convenience tops the table of the fastest-growing consumer needs (83 per cent), closely followed by value for money and environmental impact tied at second place (78 per cent).
The study, which explores the views of 500 in-house and agency marketing professionals, shows the effects of e-commerce on consumer behaviour.
The ability to be able to buy almost anything we need with the click of a button on our phones or tablets has become so ingrained that we are prepared to sacrifice value for money in favour of convenience.
CIM’s survey also reveals that consumers are concerned about companies’ performance on diversity and inclusion which is in third place (74 per cent), followed by shopping locally (73 per cent). Interestingly, having a physical store to visit is one of the least important consumer needs (38 per cent), highlighting the shift towards online shopping.
What these figures reveal is that despite the tighter market conditions brands can compete on convenience and the values they promote and advocate, even if they cannot match their competitors on price.
I believe this demonstrates a fundamental change in the way consumers think about brands which means it’s no longer possible to simply compete on price. Corporate values are increasingly important.
A pre-Covid CSR study by Ebiquity Global found that 91 per cent of global consumers expect companies to do more than make a profit, but also operate responsibly to address social and environmental issues. Eight out of 10 say they seek out responsible products whenever possible. Whilst 90 per cent said they would boycott a company if they learned of irresponsible or deceptive business practices.
So what does this mean for Irish business? Well in the next 12 months it will still be fundamentally important to offer value. However, if consumers can’t buy from your website or find you quickly and easily online, expect a tough time. Businesses need to invest to ensure their digital offer keeps pace with consumer expectations. You’ll win more sales with features like ‘one-click’ shopping, ‘click and collect’, next day delivery and free returns.
However, convenience shouldn’t come at a human and environmental cost. Marketers have a responsibility to balance the shift towards convenience and ensure they are shaping the right societal behaviours such as sustainable supply chains and good labour practices.
There’s no doubt the months ahead are going to be tough, but brands that recognise the changing nature of consumer attitudes will be the ones that prosper when the good times return.
:: Chris Gilroy is the Chartered Institute of Marketing’s Ireland chair
