In a time of great financial uncertainty – and the most significant economic shock since the 2008 credit crisis – the consumer’s perception of what offers ‘value’ has become mission critical, especially at the point of transaction.
The evolving nature of value in today’s cost-of-living crisis is part of the reason why marketers and brands need to double down and dive into creativity as they redefine what the word really means to consumers.
VMLY&R Commerce global ecommerce director James Galland explains why brands looking to offer value must take bold investment steps – and make sure they wrap creativity into every touchpoint – in order to win in the long-term.
A cost-of-living crisis
Although it is now beginning to stabilise, inflation remains high, with the UK leading the way at a gangbusting 6.8% and still projected to top the G7 pack for the next two years.
As such – and while overall inflationary pressures are falling – the squeeze on the consumer wallet continues to be keenly felt. This is particularly true across everyday essentials, with food inflation sitting at almost 15% year-on-year and more than half of shoppers spending 21% or more of their monthly income on rent or mortgages.
This non-discretionary squeeze is piling pressure elsewhere with 78% of shoppers buying cheaper brands and 50% sampling private label over a three-month period.
Consumer resilience and hunger for value
Yet, it’s not a doom and gloom scenario for brands. Some 81% of shoppers expect to spend the same or more than they did last year over the holiday season.
The truth is, in the face of massive financial adversity comes greater resilience in the form of consumer hunger for ‘value’, with McKinsey highlighting value as the single most important factor (above price alone) in driving purchase behaviour.
Rather than cut spend, people are simply more selective about when and where they buy and willing to purchase even earlier to secure gifting ideas if perception of value is achieved. No less than 50% of consumers kicked off their holiday shopping well before the end of October.
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This holiday season, winning online is critical. EMarketer highlights that 48.5% of all incremental holiday spend will come online with 54% of shoppers turning specifically to Amazon for last-minute Christmas deals. Why? Because its ecosystem goes far beyond pure sales…
- Insight: 61% of product search begins on Amazon
- Inspiration: Amazon is the number one source of inspiration
- Influence: For every £1 spent online, up to £7 can be spent elsewhere across the Amazon ecosystem
There is no question that Amazon is an important ‘shop window’ for brands and those that win visibility and unleash creativity on this platform will see the benefit ripple across their full commerce ecosystem.
One watch out: winning visibility is not easy on a digital shelf where the first three products in search win 60% of clicks. In the digital battleground for eyes on a page, creativity is critical to stand out.
Digital transformation: creativity will bring stand out on the shelf
In the algorithmically-powered world of modern marketplaces, winning share of voice doesn’t happen overnight. Visibility is half the battle and requires significant backing from the C-Suite, all the way through to the tactical executors.
Pre-Covid, this need to drive visibility may have been lost but times have changed and the C-Suite is not just listening but fully engaged to drive transformation. The Conference Board C-Suite Mid Year Survey found that CEOs were most likely to invest in digital transformation when challenged with a difficult market.
The holiday season is the perfect opportunity for brands to be bold, dynamic and buckle in on the battle to win eyeballs. It may feel like an anathema to spend more in a challenged market but brands that win ESOV (excess share of voice) during financial crises have been shown to enjoy multiplier effects in following years.
Bold practice will pay dividends if the fundamentals for digital transformation are in place, enabling brands to shape their own perception of value through creativity to distinguish from competitors.
A brilliant example of harnessing Amazon in this way comes from our US team with the General Mills ‘Press Play for Nature’ campaign.
Building creativity through every touchpoint, General Mills combined a compelling promotional campaign around Earth Day with ‘Stream It Forward’ through Amazon Prime, where every hour of nature-streamed content led to a donation to the National Park Foundation. Pushed through the Fire TV feature rotator, inline banner and screensaver ad placements, the campaign came together on a tailored landing page. The campaign recently won Amazon’s Creative Brand Building Award at 2023 unBoxed.
Iconic auto brand Volvo has also looked to drive brand share of voice and redefine the role that retailers play in its consumer ecosystem by pioneering non-endemic brand building. It has designed a brilliant dedicated virtual showroom at Amazon Japan to enhance engagement on a non-traditional platform where people are actually searching. It then drove value offsite across the shopper journey.
In summary, we are living in a highly challenged financial climate where people are feeling intense pressure on non-discretionary spend.
Brands that truly transform how they go about digital marketing, driving brilliant brand experiences through creativity, will help shape their own definition of ‘value, ultimately unlocking spend in the moment and fueling the foundations for long-term brand gains.
