THE cost-of-living crisis is not showing any signs of easing as many Australians continue to struggle under the weight of high interest rates and persistent inflation.
This is reflected in the latest Westpac-Melbourne Institute Consumer Sentiment Index, which shows consumer sentiment dipped 0.4% to 84.6% in September from 85.0% in August.
“Under any top-line figure of consumer sentiment or spending there is always a broad mix of consumer behaviours,” said Lyndall Spooner, founder and CEO of Fifth Dimension
“Many consumers are doing it tough, but they have not stopped spending completely. Rather as budgets are squeezed, we see the savvy consumer emerge who chooses carefully when and where to spend.”
Mr Spooner is a leading authority on brand trust, and Fifth Dimension’s groundbreaking Trust Matrix centres on the premise that trust in brands has its foundations laid in two traits – the capability of the brand to do what it promises, and the character of the brand to operate in an honest and ethical manner.
Fail on both trust traits and brands risk losing a customer they have let down for life and weakening brand growth due to the legacy of a proven poor reputation.
PRICE VS VALUE
Over the long-term, value always beats price. Value strengthens brand loyalty and sentiment while price can undermine brand equity by increasing commoditisation and belief that the full ticket price is not worth it.
There are many ways to add value; ideally you want to stand out for offering tangible benefits that assist consumers with the overall process of having to shop for and source items for Christmas.
Have consumers considered what they need at Christmas? Help them understand and juggle all the things they need to do at this mentally challenging time or create wish lists with reminders of when items they want to purchase are low in stock,
Beyond the ease and convenience of online shopping or extended shopping hours can you help them save time in other ways such as unique Christmas wrapping or personalised cards for direct delivery; and
Can you reduce the risk of making a poor choice by extending your returns policy to after Christmas so that they can make their purchases earlier and feel more at ease with their decision.
PRACTICAL VS INDULGENT
Christmas will be the key time when consumers will want to break out of this conservative spending and treat themselves and their loved ones.
It doesn’t matter what the category is, consumers will be looking for opportunities to trade up to a higher quality item at this time of year. Hence your promotions should focus on higher value and higher quality items that are more aspirational.
CONVENIENCE VS EXPERIENCE
Brands are encouraged to go bold, it’s Christmas. People want to feel good but are often exhausted at this time of year.
Think through the experience of interacting with your brand at this time of year
Are your customers likely to be shopping with kids and be distracted? Can you give them a break for five minutes?
Did they forget wrapping, gift cards, sticky tape, Christmas pudding?
For more on Fifth Dimension’s Trust Matrix, visit fifthdimension.consulting
