Did the Cost of Living Crisis Steal Christmas?
This week greeted us with snowfall in a lot of places in the UK, with families crossing their fingers for a white Christmas. But a good question to ask is ‘At what cost?’. Energy prices and inflations have continued to run rampant up to the festive period, as predictions previously suggested they would. Many of us are resorting to crafting Christmas gifts as the snowfall and negative temperatures force people into spending a lot more on energy and a lot less on… Well, anything else. This turn of events, as anticipated, has affected the advertising sector greatly on nearly all levels, especially during a time in which ads are usually king. From John Lewis’ Christmas spot, to the coincidence with the World Cup and its ad breaks, to people looking forward to advertisement breaks and relishing in new festive films, the communications sector has traditionally reigned over the winter season. It’s no secret that preparations for it from both agencies, brands and production houses start way earlier during the year and always try to keep their fingers on the pulse of public discussion.
With this in mind, it is interesting to look at how the sector has responded to the fact that people might not be down for spending heaps this winter, or just might be genuinely incapable to do so. What we want to find out is particularly how brands, creatives, and strategists have been thinking through the festive season and what kind of considerations went into the creation of this year’s holiday spots. Are consumers looking for fantasies and escapism amidst the economic gloom, or has it been more effective and relevant to acknowledge the tough times and consumers’ need for value? What are the pillars that brands will rely on to keep people on their side and is there even a ‘right’ way to sell to consumers this Christmas?
A trend we have surely observed so far has been the higher reliance on doing, rather than spending. On kind gestures and togetherness, rather than the standard glitz and glam during the holidays. It stands true that some brands did still put the product at the centre of the conversations, but many of them seemed to push it aside for something different - the integrity and relatability of their business, and the way it can communicate the feelings of people watching at home. Just take a look at one of the most anticipated films of the season - John Lewis’ ‘The Beginner’. A story about trying, failing and trying all over again, with a clear focus on ‘thoughtful gestures’, which was a significant change in the brief for the brand’s Christmas spot from previous years, always having been ‘thoughtful gifting’.
That slight change in messaging ended up being the catalyst for creating a story that encouraged audiences to engage with the brand in very different ways than they have previously. adam&eveDDB’s Matt Gay, creative director on the campaign, admits that this wasn’t a small ask. “We kept asking ourselves ‘Have we got the tone right?’,” he explains. “We wanted to make sure we are reading the room. Which I believe in the end, we did. There are things happening in the world that we have to acknowledge, and I feel that is why the campaigns this year overall have a more genuine and authentic feel to them. That said, times will change in the future and I’m sure brands and creative agencies will follow suit.” To Matt, the final message needed to be communicated in a heartfelt yet not a soppy and out-of-touch manner - something to stick with those watching at home. To make them feel part of the John Lewis experience more so than part of a targeted consumer base. This is why, he says, at the end things came down to one simple message: “Sometimes doing can mean more than giving.”
In their own way, brands showed that they can give in to the collective feeling this year, and that was an investment in its own right. The knowledge that the product can take a step back for a greater purpose of humanising the brand was what seemed to be most important. German supermarket Penny also knew that - especially with their long-standing commitment to social discourse and the way they have positioned themselves in previous years during the holidays. “Many people missed out on a lot of joy and happiness themselves due to the rifts,” explain director Seb Edwards from Anorak Films and Serviceplan Campaign’s managing partner Christop Everke when talking about ‘The Rift’, Penny’s Christmas spot for 2022.
“In our film we wanted to portray nothing more than the reality, because we sensed that people needed to feel understood. We showed empathy, without any overpromising, but with a solution that everyone can take: Let’s talk to each other again. Especially as we come together during the holidays, we long for joy and happiness after another year of conflict - so listening and empathy are exactly the right cues.” Similarly to the teams behind the John Lewis film, their biggest challenge was striking the right tonality. “When you work on a subject like this, the end of the spot is very crucial for the success of the whole campaign. You don’t want to overwhelm the viewer or ask too much of them. The simple call ‘Let’s talk’ was therefore exactly the right wording for us.”
If for Penny the right words were ‘Let’s talk’, for UK’s supermarket Tesco they were ‘Let’s party!’. And although that might seem counterintuitive, the two ways to take on the challenge of striking the right tone seem to be not that far from each other. In Tesco’s Christmas spot, viewers were reminded that this year it is important to foster joy and to remind ourselves of the importance of the little moments that bring us that holiday cheer in life. By playing on some very traditional British Christmas moments, like the fog around which day is bin day, watching ‘Love Actually’ for the N-th time, and many others, the brand wanted to remind audiences that these are the things that actually make the festive season festive.
Alessandra Bellini, chief customer officer at Tesco, says: “It was very important that our seasonal campaign reflected how our customers genuinely feel and what we know they are looking for. We understand that it is a tough time at the moment with everyone’s finances under pressure, but we also know that people are still looking forward to Christmas - in fact, our research showed that there is even more excitement around it than usual, with over a third (36%) of customers saying this festive season is more important than ever before.” And if a genuine, fun Christmas is what is needed to cure the blues, Tesco were ready to stand up for joy this season. “We wanted to put a smile on people’s faces as we prepare for a season of meaningful celebrations. We really tried to help everyone enjoy the best bits of Christmas, no matter their budget.” Because, at the end of the day, a lot of what makes the holiday great costs very little.
Speaking of surprising outcomes of surveys, global online marketplace Fiverr, in their latest research found that over 71% of UK retail businesses expect an astounding increase in sales this Christmas season compared to last year, despite the cost of living crisis. Although financial issues grip nearly everybody in Britain, and over half of retail owners plan to offer steeper holiday discounts to convince consumers to keep on track with gifts, a lot of businesses do not actually expect the economic downturn to be the greatest challenge for their business during the winter season. Only 37% anticipate this and instead, according to Fiverr, 43% of them expect that supply chain disruptions or inventory shortages will be the biggest barriers to a successful Christmas retail period.
That said, Bukki Adedapo, UK country manager for Fiverr, says that “It’s been made very clear to both consumers and businesses just how tricky this Christmas period is going to be. With money tighter than ever, businesses need to thread carefully to ensure they strike the right balance in marketing to an increasingly cash-strapped public.”
He continues, “On one hand, our research found that consumers are still looking to spend as 71% of UK retail businesses expect a rise in sales this Christmas, despite the cost of living crisis. On the other, businesses and marketing teams need to make sure they don’t seem out of touch with the reality of the gloomy economic outlook. The findings of our survey show that, generally speaking, small businesses are understanding the need to offer consumers as much value as possible and, as early as possible. Offering generous discounts may well prove to be the best strategy for retailers and commerce brands this year.”
Sid McGrath, chief strategy officer at Wunderman Thompson, however, believes that there is something bigger than generous discounts that needs to come into play. He explains that what is crucial for brands is to save face and not be seen as encouraging consumers to overspend. “Some escapism at Christmas is always welcomed, but to stay relevant, brands will also need to show an awareness of what people are going through and demonstrate the meaningful role they can play in their lives.” Not only this, but according to Sid, businesses should be genuinely looking into what they can do to help communities and consumers cope on the ground. To him, supermarkets have been leading in this area with Iceland offering interest-free loans, Tesco providing free children’s meal deals, and Lidl selling stunted fruit and veg at lower cost.
“Mindsets have changed around second-hand products and shopping for pre-loved items has become more socially acceptable,” he reminds us, “So there should be a bigger focus on making sustainable as well as affordable choices. Also, when it comes to the Christmas table in ad campaigns, rather than the turkey stealing the show, the spotlight should be on cheaper supporting cast side dishes and vegetarian or vegan will be the shrewd choice, not just the sustainable one.”
Another brand that has realised the need for this on-the-ground help and has delivered has been O2. Simon Valcarcel, marketing director at O2, Virgin Mobile & Virgin Media O2, reminds us that it is vital for a marketing team to take this need for help into consideration. For example, O2 launched the National Databank in 2021, and 12 months later it has become ‘even more essential to helping those in need than previously imagined’. Simon says, “As a business we’ve implemented a range of measures to support our customers through the cost of living crisis, from the launch of Essential Broadband to extending our list of data-free sites, so it was a natural decision to design our Christmas campaign with the cost of living in mind and the National Databank at its heart.”
Simon Wassef, chief strategy officer at whiteGREY, also knows the importance of data when it comes to calculating progress in terms of sustainability in the past year. "Progress is the data showing us that people are buying into - and not buying into - brands based on their sustainability agenda and actions," he explains. He also sees it as something that has grown beyond the original one team's responsibility, into something that is more likely to be embedded on an organisational level. "But there is tension here," Simon admits, "Our industry is an industry built on delivering polish, precision, perfection. But we're also in a climate emergency. Aussies look out their windows and see fires and floods, they are being told their homes are uninsurable, they are seeing their energy bills go through the roof. They do not have time for perfection."
Looking at things through brands perspective, Tomas Gonsorcik, chief strategy officer at DDB North America, believes that although 'the advertising business is, by definition, relatively low in its carbon footprint', there is a lot of progress waiting to be made. He looks particularly at brand experiences, which according to effectiveness authority Karen Nelson-Field, don't get much attention. "70% of all brand experiences get zero attention. That’s an awful lot of people’s time, energy, flights, productions and ultimately assets that go to waste. We need to take this seriously and re-examine what we do, collectively as agencies and advertisers, through the lens of effectiveness," says Tomas.
He continues, "Is the work we do adding value to people’s lives? Are we creating a lasting emotional memory structure in their minds? Are we meeting consumer needs at peak moments versus trying to do everything, everywhere, all at once?"
We must not forget, however, that the cost of living crisis is not the only possible catalyst of brand awareness. Social issues such as sustainability and the continued disregard for the health of our planet, as well as LGBTQIA+ related issues and racial prejudice in advertising, are just a few of the reasons that consumers have become weary of the integrity of brands.
It has been reiterated that today, the mindful customer, more so than ever before, looks for brands to identify with, not just ones to buy from. The brands that don’t just see the zeitgeist as a bandwagon to jump on, but truly take the time to understand it and how it defines a whole generation, will be those to stay and the ones that gain consumer trust. And as people seek to buy less and think more about what their support really means, gaining trust will be just as important as selling out on Christmas used to be.
The financial crisis undoubtedly has added to the pressure experienced by businesses to stay authentic during the hardship of Christmas 2022, but it might be worth thinking beyond generous discounts, into banking on relatability that can win over customers now and for years to come.
