Growing your business even in the good times can be difficult but against a backdrop of low consumer confidence, rising living costs and an economy fluctuating between recession and recovery, the possibility of growth can remain elusive.
The standard response of many businesses and brands is to batten down the hatches, cut costs and role out promotion after promotion in the hope of attracting those hard pressed consumers with a deal too good to turn down. But is this the right response to a highly dynamic and fluid situation? Promotional activity in the UK remains one of the highest in Europe according to The Grocer and given the current cost of living it’s no wonder people are looking for ways to make ends meet.
And whilst it is understandable that businesses want to drive volume and need to be pro-active regarding their competitors, constantly selling on discount can have a number of negative consequences. Brand loyalty may well be a casualty of the promotional merry-go-round with consumers being constantly bombarded with price, two for one, fifty percent free and a myriad of other tactics. Is it any wonder that consumers have become more promiscuous in their shopping habits when retailers and brands focus on price instead of proposition?
Brands credibility may also be under scrutiny from consumers specifically when a promotion ends. Asking people to pay twice as much for a product that was on deal last week can erode trust in the quality x price = value mindset.
When once loyal customers abandon their favourite retailers and brands as they re-appraise their priorities it would seem obvious that what is required is a deeper understanding of the customer, their motivations and their new mindset.
In difficult times when business don their metaphorical boxing gloves in order to slug it out for market share it will be the brands that can re-align their relevance and communications quickly that will survive and thrive.