Driving positive growth for brands during the cost-of-living crisis

The events of the last couple of years have been challenging for many of us. The future promise offered by a post-COVID world is swiftly being overtaken by one of rising inflation, sky-high energy prices and soaring food costs.

According to our recent Reality Check: Going for Broke? report, in the UK, financial concerns are near universal with 9 in 10 people worried about the rising cost of living. Additionally, only a mere 16% of the population are confident that they can ride the crisis out with minimal to no changes to their everyday life.

Changing habits and behaviours

In order to help ease these concerns people’s habits and behaviours are changing and adapting in response to the rising cost of living. Our research suggest that five different types of activity are now emerging to relieve some of the strain.

We found the highest levels of adoption can be seen around reduced usage. This covers everything from turning down the heating – something that half of us have already done – to managing food waste better, to using less hot water, to simply trying to make things last that little bit longer.

Shaped by changing habits, our study reveals people are switching and looking for alternative ways to live to help manage their finances. 9 in 10 of us expect to cook at home more instead of eating out, and 8 in 10 under 35s are reconsidering how they commute.

Shopping wiser is also another tactic emerging, with 9 in 10 of us expecting to try and stick more tightly to a budget and bulk buying is likely for nearly three quarters (72%) of us. Meanwhile, 85% of the population will be on the lookout for cheaper alternatives when shopping, rising to over 9 in 10 (92%) amongst lower income households.

For some, finding alternative incomes is another area of adoption, particularly among younger age groups. Nearly two thirds are considering overtime or getting a second job to make ends meet. Additionally, almost three quarters of us are thinking of selling the things we no longer need.

Finally, deferred debt. While there are many changes people are willing to make to relieve some of the strain, there’s some measures we are reluctant to take. Least likely to be adopted are those activities which push money worries to the future such as relying on credit cards, deferring mortgage payments and borrowing money.

Loyalty will be the exception

With multiple demands on our wallets, over a third of us are actively changing the brands we buy into. Everyday purchases are the most popular contenders for switching including food items, cleaning and homecare, alongside the supermarket we use, were all mentioned by over half the population as sectors where they are likely to switch, or where the switch to the cheapest alternative had already happened.

Bigger one-off purchases, or those that are more personal to our needs are less likely to see brand switching. cars and alcohol are also likely to sustain best levels of brand loyalty. Personal tech such as mobile phones are also well placed to retain brand loyalty, although when selecting a mobile network people are more likely to choose value and reliability over brand loyalty.

Brand new world

Hitting the right note in a brands messaging is increasingly becoming more important. While it's unlikely that people are looking for doom and gloom in advertising, 6 in 10 of us think that brands appear out of touch with reality when their ads suggest the world is fun and everything is ok.

A further 62% believe that brands cannot get away with saying one thing and doing another with a brand’s values behind the scenes must match what they say in public.

Shifting priorities

We’re seeing people’s overall life priorities shift away from materialistic pleasures to more altruistic values that celebrate spending time with family and loved ones, our health and wellbeing, as well as financial security.

Knowing a brand to be a safe and simple choice matters now more than ever and getting the tone right to reflect changing consumer values may help to provide endurance for brands over the coming months. Our research suggests that brand values around reputation, great service and knowing a brand is high quality are all mattering more as a result.

Similarly, there are different behaviours that brands can adopt to try and keep consumers loyal if lowering prices is not an option. In order for people to continue to use a brand, rewarding loyalty, being honest, transparent and trustworthy, helping products go further, and sustainability efforts such as reducing waste and looking after the planet all came out on top.

Julia Ayling, Head of Research & Insights