Hispanic, Black, and Asian Americans are also adopting different purchasing strategies.
August 17, 2022
Quintin Simmons – Public Relations & Communications Manager
It’s no surprise that in Collage Group’s recent consumer survey on the economy, a whopping 93% of respondents said they have noticed that items they ordinarily purchase are now more expensive, and 78% said they are “a little” to “very worried” about their current financial situation.
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Data from the analysis, “Guard Against Recession with Cultural Insights,” also reveals that brands should avoid certain language about the economic outlook when addressing consumers, including using terms like ‘the economy,’ ‘recession,’ and ‘inflation,’ as these phrases may trigger unexpected responses from consumers.
“These words polarize buyers, and once they hear them, there’s a tendency to absorb the message as loaded or too political,” explained David Evans, chief insights officer at Collage Group. “I recommend brands avoid playing into the economic anxiety.”
Brands need to concentrate on what they can control, he says. “They need to focus on solving consumers’ real problems.”
Evans instructs brands to connect around personal finance issues and look to address everyday problems such as paying down debt and managing escalating costs.
“So, it is imperative for brands to refraining from giving too much attention to the economic-narrative headline, and more important to explain how their products and services would be helpful,” Evans continued.
To that point, another 93% of consumers want brands to do something to help them. At the top of the list: offer discounts, cut prices, and provide lower cost versions or packaging.
Additionally, it is equally critical for brands to recognize that consumers are navigating the waters differently, especially across racial and ethnic segments.
Hispanic Americans are worried and changing behavior: Collage found that 35% of Hispanic Americans say they are “very worried” now, much higher than other groups. As a result, they have already begun adjusting their purchasing across virtually every category, including purchasing more generic or store brands and shopping more frequently at discount stores.
Black Americans are far less concerned than other segments: Remarkably, Black Americans are far less worried about what’s to come, and in fact are holding steady on purchasing behaviors. Evans attributes this poise to Black Americans’ tenacity over time, citing the segment’s higher levels of optimism and courageousness, two of a variety of cultural traits which Collage Group tracks across all demographics.
Asian American are adopting a wait and see approach: Asian Americans are a bit in the middle of the spectrum. They are not yet worried, according to the study. However, Asians said they are planning to adjust spending in the future in order to be safe.
“Every segment is feeling the pinch, and brands need to respond with empathy and show they are prepared to do something,” said Jack Mackinnon, senior director at Collage Group and the author of the study.
“At the same time, it is essential for brands to avoid attempting to adopt a ‘one-size-fits-all’ approach to the multicultural segment,” he added. “Brands also need to recognize the variety of responses consumers are having to inflation.”
Top action steps brands should consider:
- Avoid political anxieties by steering clear of the headline economic narrative: Our highly polarized national media causes many to view the economy through their own political lens. Brands must be mindful of playing into this polarizing dynamic.
- Embrace the realities of consumers’ real financial challenges: Show empathy about what’s happening to consumers now, especially with respect to managing credit, delaying purchases, shopping and driving habits.
- Explaining cost savings opportunities: Tell consumers how products and services can save them money.
- Emphasizing steadiness/predictability: Seize those consumers who have strong brand loyalty. Position your brand as steady and willing to provide what’s needed.
- Being willing to sacrifice: Those brands in particular that have generated record profits should reward their devoted consumers by supplying coupons, by discounting prices, and by offering layaway or delayed payment options.
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Public Relations & Communications Manager
Quintin Simmons is Public Relations & Communications manager at Collage Group. He has over two decades of journalism and communications experience, having written and edited for a variety of publications, and servicing as media rep for a number of national outlets. Quintin, a communications and media relations expert, is always looking to connect and engage with writers and reporters.