The big squeeze
The real impact of the cost of living crisis
As the post-pandemic landscape continues to evolve, consumer brands need to work harder than ever to stay relevant and distinct. Brands are seeing huge shifts in consumer behaviour as patterns that emerged during the pandemic are no longer relevant.
Everyone is feeling the squeeze. The cost of living is going up, and everyone’s talking about it.
It’s not just energy prices that are set to continue to soar. With a hike in business taxes and UK inflation now risen to 9.1%, the highest rate in 40 years (with warnings of it hitting 11% by the end of the year); everyone’s experiencing a big squeeze. Tighter purse strings mean brands have to engage and excite their customers in new ways to weather the storm.
The rise of regional. Whilst many big businesses are ‘encouraging’ their people to head back into offices, regional cities have seen a significantly higher footfall than central London (7% vs 3%). As some businesses embrace the flexibility of hybrid working, huge living costs looming mean it’s just not feasible, or desirable to settle down in the big smoke. Where people work has implications for how and where they consume. Are brands maximising and supporting this shift?
New distribution strategies. Brands are engaging with their customers and communities in new ways; some traditional ‘city brands’ hope to become new cornerstones of small but thriving communities. (in 2021 Pret announced over 100 new franchise stores to open outside of cities). Similarly, last year, Lush transformed its High Street stores into “dark stores”, repurposing their once busy retail units into distribution centres to exclusively cater for online shoppers. The influx in demand for dark stores is in turn driving huge increases in rent for urban industrial units — charging high street rents for distribution hubs. What are brands doing to engage with the changing needs of their communities?
Sustainability and value are the leading factors for conscious consumers. The pandemic saw customers reward brands that prioritised their peoples’ wellbeing. Since then demand continues to rocket for goods that have a positive environmental impact. Inevitably, consumer desire to buy sustainably will be challenged in light of general increase in living costs. What role, therefore, can brands play in helping to reduce the choice gap for their customers, making green products the most economical?
Meanwhile the pressure on big businesses and their owners is mounting. Employers are being squeezed from both sides with hiked up business and an increasing responsibility for the organisations to take more of a holistic approach to employee experience. Matching up people needs with the ever-changing business landscape is a crucial part of designing better, more resilient futures for organisations.
Let’s talk about money. Despite a plea for pay restraint from the governor of the Bank of England, employers are set to increase their wages at the fastest pace in almost a decade. 46% of companies struggling to keep hold of their workers have already raised the pay of their staff. What’s more, pay transparency is quickly becoming an identity for responsible employer brands. Buffer, the social media manager for SMEs, has led the way in pay transparency. It’s an effective way of building trust among employees as well as a means to showcasing how employer brands are achieving their DEI goals.
The employer’s responsibility is expanding. Your Employer Value Proposition (EVP) encompasses everything your business does to attract and retain brilliant people. It matters now more than ever. People will continue to re-examine the role of work in their lives in 2022. Taking control and making a big change in your personal life, for many, has been accomplished by resigning from their current work. It is not just about leaving one job for another. Employees have developed an all-encompassing view of their lives at work and at home- are employer brands keeping up with that?
Varied experience and wellness. With our work and personal lives bound closer than ever before (especially with greater uptake of flexible working) — financial stress will inevitably affect peoples’ performance — be that mindset, productivity or manner. The cost of living crisis will affect people differently. 94% of companies making significant investments in their wellbeing programs in 2020, only 40% of employees have taken advantage of any wellbeing offerings in the last year. That said, the ‘employee experience’ is not homogenous. Organisations and their leaders will have to adopt new measures to assess financial, physical and mental health in order to define accurate and personalised people’s experiences to look after their people.
Join us on Wednesday 9th November at 8.30am for a 60 minute virtual discussion, to share your point of view on how the cost of living crisis will impact our Net Zero ambitions. Expect a variety of cross-industry perspectives and experiences. Register for your free virtual seat here.
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