17 hours ago | By WGSN Insider
Big data meets consumer insights, Experience WGSN.
Nov 12, 2020
By Nina Giglio
As financial anxiety impacts consumers across the world, businesses have the opportunity to add value by going beyond price.
Uncertainty has been the prevailing mood globally ever since coronavirus disrupted the world as we knew it back in January. Now, despite the varying levels of re-emergence and fragmented recovery stages around the world, we know our emotional states are quite unified, for the first time in generations.
People, no matter where they’re based, are craving certainty, stability, security and a sense of optimism in unknown times. These sentiment shifts will reshape our economies, industries and daily lives, and will result in new product priorities, service needs and shopper strategies.
At WGSN, we’re tracking how consumers are spending less, regardless of where in the world they are based. The signs of financial uncertainty are right outside the doorstep of many – shuttered stores and deserted high streets – and, as unemployment rates soar, we see consumer spending drop.
Even as countries deploy stimulus packages, reduce interest rates and offer various incentives to jumpstart their communities, financial anxiety remains a key sentiment. It’s clear that a significant economic downturn is coming, affecting world markets and consumers at every level – even in countries that are not predicted to fall into deep recession.
As consumers are saving rather than spending – even in regions that are starting to reopen – this presents an opportunity for brands to offer value that goes beyond price. Think multipurpose and multifunctional and, for product size, go big.
At WGSN, we have been tracking the value shift around our relationships to products since 2016, when we forecasted a mainstream shift towards buying products with a sense of purpose as opposed to newness. In 2020, we see that financial anxiety is accelerating this trend, as people assess the monetary value alongside the longevity of their purchases.
Although value has traditionally centred around a product’s cost, is also about its worth now. Products that keep people healthy, secure and safe will have a higher value – and will attract more of consumers’ budgets, even in financially impacted households.
For products that don’t deliver health or safety benefits, the key is to diversify with entry-level ranges that target budget-conscious consumers who still want to retain elements of their former lifestyle. Consider diversifying your range to offer more accessible price points and creating value ranges.
One thing is for certain: as consumers and brands alike adjust to the next normal, products will have to go beyond price to deliver value and thrive in the new landscape.
Our global teams have had countless discussions around the many ‘new normals’ and, while challenges differ across regions, one question naturally came up across all: what’s next? Find out on our latest white paper, The Value Shift.
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