What is the single biggest thing weighing down the consumer marketplace right now?
The answer is uncertainty.
Despite the headlines, the biggest problem facing the consumer marketplace is not the weak state of household finances. Not that weak finances are unimportant. Unemployment and debt continue to burden many people with agonizing struggles to make ends meet. But the bigger problem facing brand marketers is the one affecting all consumers, not just consumers with pocketbook problems. That problem is the uncertainty weighing on people’s minds, making everyone overly cautious and guarded in their engagement with brands.
Uncertainty has been ever-present since the economy hit the rocks in 2007. From the very beginning, nobody seemed to know what was happening or where things were headed. Economists were baffled. Politicians and policy-makers lurched from one remedy to the next with only moderate success. The depth and breadth of the downturn caught nearly everyone by surprise. Now the feebleness of the recovery has, too.
Into this void of assurance stepped the media, with every newspaper, magazine and talk show competing for readers and viewers by stoking the general malaise with ever more dire headlines about what’s to come. The general sense nowadays is that everybody who’s supposed to know what to do is stumped, making it up as they go along.
Uncertainty is the only thing people know for sure.
This uncertainty hurts business confidence, making companies less likely to invest. Investments are a bet against the future based on a reckoning of what’s likely to happen. When uncertainty prevails, businesses hoard cash and hang on, which in turn breeds even more uncertainty.
When consumers are uncertain, they, too, quit spending. For all the discussion about consumers saving in order to repair their defective balance sheets, the savings rate is, instead, mostly a measure of fear. People save more when they are uncertain and afraid. This is true both of households hurt by the downturn as well as those unaffected. Weak household finances only affect a portion of households; uncertainty affects all.
Uncertainty is focusing people on the here and now. With no idea about what’s coming, consumers are simply concentrating on the one thing they do know, which is what’s in front of them today. Unfortunately, this creates a self-reinforcing cycle of worry. People have nothing to look forward to that offers them any relief from their concerns.
Even people with financial challenges might make a small investment or two in the future if they could be certain it would be worth the sacrifice and additional hardship. But today’s prevailing uncertainty makes any such thing unlikely, even for people who could afford it.
The uncertainty afflicting the general marketplace is a difficult if not impossible challenge for individual marketers to tackle. But brand marketers can take steps to remove any uncertainty associated with their brands and their value propositions. At the very least, brand marketers should not add to uncertainty by confusing consumers or by leaving too much to the imagination. Now is the time to get tangible. It is also a time to be aspirational in specific ways. Show consumers one future about which they can be certain because it is guaranteed by a brand they can trust.
The Blake Project Can Help: The Brand Positioning Workshop
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education
