Covid-19 and the predicted recession will have a large impact on people’s attitude to risk. As we go into the next recession, successful brands will be those that help people manage these risks.
Society changed so quickly it shocked the world. Things we thought we could rely on proved easily disrupted. Suddenly the shelves were empty. Our support systems have either collapsed or are entirely overburdened. Our health and safety revealed to be more perilous than we thought.
When the panic dies down, and things return to some semblance of normalcy, the vulnerabilities Covid-19 has exposed will remain with us. We’ll know the things we love, depend on and take for granted are much more precarious and fragile than we thought.
This position of vulnerability will only be acerbated as we enter a recession, profoundly affecting how we approach purchase decisions. Most notably, our tolerance for risk will drop dramatically. We’ve seen it before. In previous recessions, we’ve delayed buying big-ticket items, taken fewer holidays, resisted buying cars, invested less, had fewer children and founded fewer companies.
The good news is there are many things that marketers can do to help people feel secure in their decisions, and brands are a powerful way to do that.
Brands can help us navigate an overly complex world and give us confidence when making a purchase. Consistency makes us feel secure; inconsistency increases our anxiety. There are many soft drinks I can buy, but Coke is always the same, and I can trust it won’t let me down. This is not a time to walk away from brand building. It’s a time when brands matter the most.
You can tackle the fear stoked by an uncertain future by providing stability. American carmakers have already begun launching programs to alleviate some of that fear. Hyundai has relaunched its ‘assure’ program after retiring the campaign at the end of the Great Recession. Which promises to buy back your car if you lose your job in six months after your purchase. This is the second time Hyundai is running this campaign. Ford, in a similar vein, has just released a program under the campaign ‘Built to lend a hand.’
But minimising financial risk doesn’t always mean offering a safety net. It could be simply giving people control over their circumstances, and confidence to take the first step. E*Trade, a leader in online trading, was driven to the brink of bankruptcy at the start of the Great Recession. They realised that in order to grow they needed to push people past the fear they had around trading for themselves. The idea that 'there’s comfort in numbers' showed people how easy it could be to take control of your financial future, and most importantly, how many people were already doing it. That social proof gave people the confidence to approach trading on their own.
While some brands are managing risk by wrangling the future, others are focusing on today with messages of reassurance. When the mind wants certainty, messages that promise continuity are soothing. Walmart, Kraft Heinz and Panera among many others have all placed their employees at the centre of their advertising to remind you that when everything seems lost, you can count on them for a full shelf, or a belly full of mac and cheese.
These campaigns offer a glimpse into how our relationships to brands change in times of uncertainty. This is the moment when a brand matters most. And when every purchase carries with it increased risk, they’ll play an important role as markers of quality and trust.
In previous recessions we have seen brands rely on heritage, often wrapped in nostalgia, to reinforce their products as the trusted choice. In 2008 Pepsi created throwback campaigns about old products; Coke Light refreshed its original tagline 'just for the taste of it'; Cotton, Inc. brought back its vintage jingle 'the fabric of our lives'; and Heinz launched the deeply nostalgic 'It has to be Heinz'.
But sometimes inferring trust through heritage and nostalgia isn’t enough to shift behaviour, you must be a bit more explicit with how you frame risk. Stoking the flames of uncertainty can be an effective way to shift behaviour, and drive people towards a less risky choice.
Foster Farms, a fresh chicken producer, commanded a 60% premium over their competitors. In a double blow, store brands had also begun to use natural and organic claims, numbing Foster’s competitive advantage.
Foster’s solution to this challenge was to draw attention to the common private label practice of injecting saltwater, euphemistically called plumping. They launched a campaign to educate the public, under the rallying cry of 'Say No to Plumping'. And by drawing attention to plumping people began to ask, 'what else were they doing to the chicken?' All of a sudden Foster’s Farm was no longer the expensive choice, but the safer one.
As the threat of the recession becomes an inevitability, it’s our job to understand where our consumers' fears, doubts and uncertainties lay and do our best to lessen them. In a world where risks aren’t worth taking, the brand best positioned to offer certainty will not only survive a recession but might even thrive.
- Simon White, president of FCB's West Coast office