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In the last month of 2007 the subprime mortgage crisis took place. It led to the collapse of many of the United States' largest financial institutions, including Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers and AIG, thus, kicking off a global slowdown which still persists, though to a much lesser extent.
Slowdown has now become a way of life. Consumer spending has gone down, leading to a decrease in demand of products, which in turn, leads to a decrease in production. As a result, companies try to cut costs which invite a negative response from the stock markets, resulting in pay-cuts, lay-offs etc.
One of the ways of how people adapt to such a scenario is by postponing their purchases. If you were to look at life, you cannot live without the essentials. But the trick lies in defining what are those essentials and how do you prioritise them. Therefore, it becomes imperative for every brand to make a case for why people can't live without it. This is where the game lies in making the consumers place their 'wants' in the 'needs' list. The focus should be to make consumers evaluate your brand in a different light, leading them to put it in their priority list.
Marketers need to figure out the logic and tell people why they need to spend. For instance, Apple and Samsung are luxury phones which supposedly lie at the bottom of a priority list. But they came up with exchange offers that asked people to bring their old phones and get some discount on a new phone. These offers also gave them an option of pay most of the amount in EMIs, all in an effort to drive them up the consumer's priority list. Similarly, compact SUVs are being positioned as 'essential luxury'. Afterall, as petrol prices rise, diesel becomes essential.
Its time brands in other sectors too change consumer mindsets by their offerings from 'Buy Later' to 'Buy Now'. Unless brands make that transformation today, they will continue to lose shares and revenues tomorrow. To make it to the wish list in the cart, the need of the hour is to be on that need-list.
The author is National Creative Director, Leo Burnett
