The past two years have been marked by non-stop disruptions to the status quo, from the coronavirus pandemic and political strife to Russia's invasion of Ukraine. Now, consumers also face an inflationary cycle for the first time in decades, further complicating a fraught period for all parts of the global economy. For brands looking to engage consumers amid inflation, the key will be reducing risks -- not just increasing value -- by focusing on the losses the economic phenomenon causes, according to "Inflation and Risk Reduction," a report by J. Walker Smith, Kantar's chief knowledge officer for North America.
"This moment in time is a little bit more about the broader dynamic of risk exposure in the broader context of volatility, and I think brands have an opportunity to be responsive to that," Smith said in an interview with Marketing Dive. Inflation may be the latest in the long line of disruptions -- and a novel one for many consumers -- but research into consumer mindsets and examples from recent history show a way forward for agile, sophisticated brands.
How this disruption is different
While consumers have faced economic disruptions such as the recession caused by the 2007 financial crisis and the pandemic, many generations have never faced inflation, with the last such period happening from the late 1960s until the early 1980s. The disruptions of the last few decades have mostly caused unemployment, not inflation, which is expected to change how consumers respond to economic pressure.
This economic disruption comes amid a global mental health crisis, with anxiety at some of the highest levels measured, including three-to-four-times higher than previously measured in the U.S., Smith explained. Beyond straining wallets, inflation exacerbates the anxiety consumers are already struggling to deal with. "People seem to be feeling a greater sense of risk exposure right now -- not just the pressure of higher prices, but the feeling like the world is exposing them to more and more volatility, and more and more uncertainty," Smith said.