In the news
The burden consumers face daily from rising food and energy costs make headlines every day. A report in USA Today noted that food prices in the US rose 5% over the past year, the largest yearly increase in almost 20 years.
Continuously rising prices of daily staples like bread, milk, oil, and gasoline mean consumers might think twice before purchasing goods they didn't hesitate to buy in the past.
Why does it matter?
Keith Hughes, SVP/MD, global marketing communications at Fleishman-Hillard, said the hard times needn't be all bad news.
"I really look at this as a fantastic opportunity to re-engage people with their love affair of brands," he says. "If you don't give consumers a reason to pay a premium for many products where a cheaper alternative exists, they will choose that alternative.
"[Because] consumers are spending much more time actively thinking about what they are going to purchase and where their loyalties lie," he adds, "experiential marketing is critically important" and can help develop a "stronger relationship... for the future."
Maria Kalligeros, EVP and consumer practice director at CRT/tanaka, said PR efforts should address today's reality. "Authenticity, reality, trust. Brands [that] can convey those values to consumers are going to win in a time of contracted spending," she says.
Taking an active approach will help put your brand ahead of another when impulse purchases slow, adds Kalligeros.
"We need to be out there and our clients need to be out there talking about thrift, practicality, and balance," she explains.
1. The US Consumer Confidence Index found economic optimism expressed by consumers based on their saving and spending activities is at a 16-year low.
2. Gas prices rose 5.2% in May, and were 21% higher than in May 2007, hitting a national high of $4.08 by June 16, according to the US Energy Information Administration.
3. Medical care costs were 4.1% higher than a year ago, according to the Consumer Price Index, while fuel-oil costs rose 10.4%, 64% higher than in May 2007.
4. US food and beverage prices in May were 5% higher than a year ago and 0.3% higher than the previous month, based on Consumer Price Index statistics.
5. Ninety percent of US consumers believe the economy is in a recession, according to a Reuters/University of Michigan consumer sentiment survey.