In the current economic climate, ongoing tariff tussles and stock market volatility are creating an uncertain environment for businesses. And to add to the tumult, a potential global recession may cause consumers rethink their usual purchase decisions.
But business leaders still have some control over their brand's destiny. Here are some strategies for navigating these turbulent times, whilst making your brand a beacon of certainty, reliability, and trust for your customers.
In the coming weeks, we'll share our first study on how consumers worldwide are reacting to the unfolding situation. But for now, let's dive into some initial actions to think about to ensure you’re ready for whatever the future might hold:
1. Revisit your assumptions: It's crucial to understand what you're really up against. When costs are on the rise, certain brands and products might become more of a discretionary spend. For example, if you're in the luxury car market and importing into the US, your likely competition is other luxury brands from outside the US who are also facing the same challenges. Market understanding is key, so make sure you’re clear on your competitive set, and your relative positioning.
2. Keep on talking: Investing in your brand equity is essential, through good times and bad. While it might be tempting to “go dark”, research from Kantar shows that reducing your ad spend significantly extends your recovery period. Doing so also erodes awareness and base sales, which will require more time (and investment) to build back up. Understand how your brand can meet consumers’ emotional and functional needs, and how different you are to the competition. By doing so, you will be putting your brand in a good position to emerge from economic uncertainty more quickly and more powerfully.
3. Get a grip on your pricing power: Your pricing power will influence the margins you can maintain if tariffs are imposed on your market. Strong pricing power means consumers are less likely to opt for cheaper alternatives – even if your product commands a premium price tag. The relationship between pricing power and price elasticity is well-evidenced. Don’t be tempted to opt for immediate discounting; constant promotions are often unsustainable and can create negative cycles for many product categories.
4. Make messaging matter: Take another look at how you present the value of your brand through your communications. If it turns out that your competitor's clothing brand is produced overseas at a lower cost, it could harm their reputation. In response, you might upweight your sustainability messaging to highlight your distinctiveness.
5. Find new space for your brand: Assess your brand, market, and audience with a fresh perspective and ask, "How can we approach this differently?" Identify new markets or untapped target audiences where your brand might have a competitive edge. Innovation might be necessary to develop new product variants or to expand into new categories if your brand is already well-established.
These decisions will be influenced by the specific uncertainties your business is facing and how they affect your brand. Currently, with potential tariffs and their market effects, your actions will vary depending on whether you're a US-based brand with global trade, a global brand outside the US, or a local brand in another market. The challenges and opportunities in each scenario differ. Should you increase marketing spend in other markets or lean into your brand's local heritage more?
Good data will enable business leaders to understand consumer behaviour and perceptions: it informs strategic decisions and makes sleepwalking into costly mistakes less likely. Whether it’s market understanding, brand equity, customer experience, creative and media effectiveness or innovation, brands can’t afford to take wild punts.
At all times, but particularly in times of uncertainty, insights and data science support marketers in understanding how consumers think and feel, and helps shape and predict the outcomes of important strategic decisions. Reach out to find out how Kantar’s experts can help your brand to navigate the storm.
But business leaders still have some control over their brand's destiny. Here are some strategies for navigating these turbulent times, whilst making your brand a beacon of certainty, reliability, and trust for your customers.
In the coming weeks, we'll share our first study on how consumers worldwide are reacting to the unfolding situation. But for now, let's dive into some initial actions to think about to ensure you’re ready for whatever the future might hold:
1. Revisit your assumptions: It's crucial to understand what you're really up against. When costs are on the rise, certain brands and products might become more of a discretionary spend. For example, if you're in the luxury car market and importing into the US, your likely competition is other luxury brands from outside the US who are also facing the same challenges. Market understanding is key, so make sure you’re clear on your competitive set, and your relative positioning.
2. Keep on talking: Investing in your brand equity is essential, through good times and bad. While it might be tempting to “go dark”, research from Kantar shows that reducing your ad spend significantly extends your recovery period. Doing so also erodes awareness and base sales, which will require more time (and investment) to build back up. Understand how your brand can meet consumers’ emotional and functional needs, and how different you are to the competition. By doing so, you will be putting your brand in a good position to emerge from economic uncertainty more quickly and more powerfully.
3. Get a grip on your pricing power: Your pricing power will influence the margins you can maintain if tariffs are imposed on your market. Strong pricing power means consumers are less likely to opt for cheaper alternatives – even if your product commands a premium price tag. The relationship between pricing power and price elasticity is well-evidenced. Don’t be tempted to opt for immediate discounting; constant promotions are often unsustainable and can create negative cycles for many product categories.
4. Make messaging matter: Take another look at how you present the value of your brand through your communications. If it turns out that your competitor's clothing brand is produced overseas at a lower cost, it could harm their reputation. In response, you might upweight your sustainability messaging to highlight your distinctiveness.
5. Find new space for your brand: Assess your brand, market, and audience with a fresh perspective and ask, "How can we approach this differently?" Identify new markets or untapped target audiences where your brand might have a competitive edge. Innovation might be necessary to develop new product variants or to expand into new categories if your brand is already well-established.
These decisions will be influenced by the specific uncertainties your business is facing and how they affect your brand. Currently, with potential tariffs and their market effects, your actions will vary depending on whether you're a US-based brand with global trade, a global brand outside the US, or a local brand in another market. The challenges and opportunities in each scenario differ. Should you increase marketing spend in other markets or lean into your brand's local heritage more?
Good data will enable business leaders to understand consumer behaviour and perceptions: it informs strategic decisions and makes sleepwalking into costly mistakes less likely. Whether it’s market understanding, brand equity, customer experience, creative and media effectiveness or innovation, brands can’t afford to take wild punts.
At all times, but particularly in times of uncertainty, insights and data science support marketers in understanding how consumers think and feel, and helps shape and predict the outcomes of important strategic decisions. Reach out to find out how Kantar’s experts can help your brand to navigate the storm.