How To Market To Inflation-Weary Consumers

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Inflation has been an obstacle everyone has dealt with for the past few years. It’s added challenges to doing business and has put stress on supply chains. It’s impacted where consumers spend their money. And it’s also impacted the kind of marketing messages that brands can tell in order to be successful.

Although inflation has been slowing down, it’s still there. According to the Labor Department’s January inflation report, headline inflation was 3.1%—a decrease from January 2023’s 6.4% inflation rate, but inflation all the same. Maxine Gurevich, senior vice president and head of cultural intelligence at Horizon Media, said while Wall Street, C-suites and investors are praising any drop in inflation rates—and are able to parlay lower inflation into larger business benefits—consumers still seem stuck.

“At the end of the day, what consumers are feeling is that even though experts are saying that things are getting better, they’re not feeling better, and they’re not seeing that prices are that much better for them,” Gurevich told me.

This leaves a huge opportunity for marketers to show consumers that things are better. For the third year running, Horizon Media put together a study that looks at the inflation-weary consumer of right now: how they see the world, and how brands can speak to them in a way that resonates. I talked with Gurevich some more about this year’s study, which was exclusively provided to Forbes. More about the findings can be found later in this newsletter.

And while inflation may be cooling off—with the personal consumption expenditures index showing Americans spent just 2.4% more this January than in January 2023, and new CPI numbers expected next week—it isn’t likely to trickle down to consumers for a while. However, social campaigns and quick messaging initiatives can start now. These can help build consumer confidence both in particular brands, and in the economy as a whole.

LEGAL MATTERS

A new legal challenge to Google’s digital advertising practices is coming from the other side of the Atlantic Ocean. Thirty-two European media companies, including Axel Springer and Schibsted, filed a lawsuit against the digital giant last week claiming they have lost market position due to Google’s “uncompetitive” tactics, Forbes senior contributor Emma Woollacott writes. As a result, the companies say their revenues are hurt, and they’re paying high fees for ad tech services. The lawsuit seeks $2.26 billion in damages.

These issues are not new, and European publishers aren’t the only ones who take issue with the way Google controls digital advertising. In 2021, French regulators fined Google $268 million for abusing its dominant position in ad tech by favoring its own tools. Last year, the European Commission gave Google a warning suggesting the company was breaching EU antitrust rules by favoring its own ad exchange in a selection auction with a publisher ad server. And in the U.S., the Justice Department and eight states filed an antitrust lawsuit in 2023 accusing Google of abusing its dominance in the digital advertising space. That trial is scheduled to begin in September.

NOW TRENDING

Anyone with even a bit of exposure to sports news has heard a lot about Caitlin Clark in the last couple weeks. The star basketball player at the University of Iowa, who became the NCAA’s all-time leading scorer in college basketball this week, and recently announced that she’d enter the WNBA draft in April, has dominated headlines. Clark just signed a new marketing deal that parlays her stardom, her wisdom, and the place she’ll most likely be playing professionally. The deal with Gainbridge, a financial management platform, will promote the company’s new ParityFlex product, a multi-year guaranteed annuity product designed for women. Gainbridge already works with other female sports superstars to promote its products, including tennis icon Billie Jean King and golf legend Annika Sörenstam.

According to the Indianapolis Star, Gainbridge has been pursuing Clark as its newest spokesperson for months, looking at her precision on the court, her sheer athletic talent and starpower. Gainbridge was days from announcing its partnership with Clark when she said she would be joining the draft. And this year’s first WNBA draft pick will go to the Indiana Fever, which plays its home games in Gainbridge Fieldhouse. Gainbridge staff told the Indianapolis Star they are excited that Clark is likely to represent their brand in two big ways. Clark also has existing sponsorship deals with several brands, including Gatorade, H&R Block, Nike and Buick, among others.

BRANDS + MESSAGING

The latest edition of controversy over the social media influencer lifestyle is hitting the internet this week. Cosmetics brand Tarte, which is known for its over-the-top luxury trips for influencers, just sent 30 of its brand ambassadors to Bora Bora. From social media accounts, the trip looks like an incredible dream vacation, and that has set off a wave of influencer fatigue online. Many of the TikTok reactions to Tarte’s multimillion dollar tropical getaway come from consumers who find it over-the-top and too posh, and some posters say the event in and of itself makes them not want to spend any money on Tarte. The company faced similar backlash for a last year’s influencer trip to Dubai, which many said was too luxe at a time that many regular people faced financial challenges.

For its part, Tarte has doubled down on its influencer trips, saying they are a powerful brand-building force. Forbes senior contributor Charles Taylor looked at the rationale behind Tarte’s influencer trips. The brand’s founder and CEO Maureen Kelly said that the company has been doing the trips for about a decade, and they are a chance for Tarte to connect with its key influencers, building deeper relationships and strengthening the brand story. Kelly said that Tarte’s investment in the trips has been “mutually advantageous” through the years. “We get to know our amazing influencers and appreciate their individual perspectives, they get a fun, relaxing experience and they get to know Tarte,” Taylor wrote. “To us, this is far more valuable in the long term vs a one-off media campaign like a multi-million dollar Super Bowl commercial.”

ON MESSAGE

Horizon Media’s Maxine Gurevich On Marketing To Inflation-Weary Consumers

Inflation has been ruling many aspects of people’s everyday lives for the past few years, dictating what they can buy, the life events they can plan and how they chart their careers. Horizon Media has delved into what this has meant to consumers for the last three years, publishing reports that looked both at how people feel about the economy, spending and messaging. The latest report, which looks at the status of the American Dream and how brands can help, publishes today. I talked to Senior Vice President and Head of Cultural Intelligence Maxine Gurevich about their findings. This interview has been edited for length, clarity and continuity.

How are consumers right now different than they were the last time you did this study?

Gurevich: Buy now, pay later has increased exponentially. We’ve seen that in a bunch of other reports. But it’s not just that they’re relying on buy now, pay later. They’re also saving a lot less, we’re seeing that actually across all segments. Since 2022, we’ve seen a sharp increase in dipping into your savings and actually putting less into it, including the…most financially well off. To us, what that really signals is that we’re in a place where the American Dream is being redefined, and it’s really more about immediate desires than it is about future planning. That actually can be an opportunity for brands to kind of help people say: You know what? It’s not just about the now. It can be about your future, and this is the value you get if you’re loyal to us over time. …People are more fickle now, right? We’re not as brand loyal. We’re going a lot for price first. But there is a value, a narrative and messaging that can be really resonant if you’re acknowledging the lack of resources people have today.

At the same time, we’re also seeing this boom in the social marketplace. It’s hard for us to not make this connection. We see [brands] increasing specifically on cosmetics and clothes and apparel, and at the same time we’re seeing an increase in trust among expert influencers. “Shoppable Stars” is a trend we’ve been following a lot. We think that there is a connection there, that people are starting to trust other people as experts more so than they’re trusting big corporate brands. It’s important for brands to see that these “shoppable stars” should be taken seriously. But there’s still an advantage for older corporations who have historical value and can build that trust. Whereas these newcomers, these influencers, they have no background, they’re new to the market. You don’t really know if their products work. There’s an advantage for more heritage brands that really stood the test of time.

Popularity of loyalty programs has been increasing. What new twists on loyalty programs have you found are best resonating with consumers right now?

Because everyone’s really questioning the amount of subscriptions and if they’re worth it, offering up perks within their subscriptions that’s a little bit more surprising is going to go a long way.

There was a brand—I’m not going to mention their name—that offered a discount for date night. The thing about it was that discount actually wasn’t even available for most people. It was gone in 30 seconds and it actually ended up causing a lot more frustration than joy. If you’re going to offer something like a free date night for a year, make sure that it is accessible and that the systems are in place for people to actually feel like they can purchase it or they can get rewarded, versus having to sit by the screen and wait and see if they can get it. People are already very stressed. I think this doesn’t go very far.

What are things you recommend that brands really should be doing right now? What about things they shouldn’t be doing?

Being really careful of the language you’re using as a marketing opportunity. People are very sensitive. They’re also very savvy, and they know that they’re cutting corners, but they don’t necessarily want to be talked down [to], or they don’t want to feel like they’re not getting the value of what they’re spending. [If using] shrinkflation, being more open about that. Surprising and delighting people who do have subscriptions or might not be using it to the fullest potential.

Emphasizing exclusivity to save on offers. Really making you feel like this offer is exclusive to you and making you feel like you’re the only one that can get this kind of offer is going to go a long way. Really personalizing and engaging with rewards. Making it a little bit more fun. Creating a game where at the end you do end up with potentially a buy-one-get-one-free offer.

Anything that a brand can do to uplift is important right now. We’re seeing people still not quite happy. …There’s a lot of comparison of, ‘Well, this used to be better before the pandemic. …I want to go back to the way things used to be.’ Reminding people that we’re going forward. We’re getting there. We’re not perfect. We’re not going to solve all our financial problems right now. But any opportunity to kind of lift their spirits and feeling like we’re going in the right direction is going to go a long way.

This is not the first time the economy has led consumers to struggle. What is different about now versus other points in history when consumers faced heavy inflation?

It’s very [politically] polarizing. You’ll be hard pressed for people who are actually meeting in the middle on why this is happening. The other thing is we’re living in a much more public world. Social media at this capacity didn’t exist 10 years ago. People are able to scrutinize more. People are able to talk about what they’re seeing on shelves more with each other. They’re going to these influencers to help them figure out where they can go to get the best deals, the best prices, and that is what’s shaping a lot of their choices. Versus 10 years ago, you didn’t really have much comparison. You didn’t have access to someone in Ohio shopping down the aisle if you were in Vermont. Access to transparency has really grown a lot.

FACTS + COMMENTS

Marriott International has added an extremely-sought-after perk to its loyalty program: Taylor Swift tickets.

500,000: Loyalty points needed to get a pair of concert tickets (and two nights in a Marriott hotel)

$1,088: Average sale price for a ticket to Taylor Swift’s Eras Tour, according to CNBC

‘We’ve never done anything this global in scale’: Marriott International Executive Vice President and Chief Customer Officer Peggy Roe told Bloomberg

QUIZ

Mattel is planning a series of new partnerships and merchandise for its Barbie line. What is the occasion?

A. Celebrating the blockbuster movie Barbie

B. Barbie’s 65th birthday

C. Selling 1 billion dolls worldwide

D. Commemorating Women’s History Month

See if you got the answer right here.