Shot of empathy the best way to brew consumer confidence

We are in the midst of the biggest increase in the cost of living in recorded history. Can companies use their brand and marketing to help their customers navigate the growing economic pressures?

Tim Mottau, Dentsu Creative Strategy Partner

“Dear customers, please check the price before ordering and please treat our staff with respect.”

That’s the message on a sign greeting customers before they sit down to enjoy breakfast at a cafe around the corner from where I live. It kindly asks us to be confident that we’ve got enough money in our wallets, and to show some compassion for others who are also just trying to make ends meet. It might just be a sign crudely posted with sticky tape to a door, but it’s a sign of the times.

Who are all these people yelling at baristas, by the way?

We are in the midst of the biggest increase in the cost of living in recorded history. Everything is more expensive and we’ve got less disposable income.

With significant pressure on every dollar and every purchase decision, it just doesn’t feel as good to spend. It doesn’t matter if it’s that long-overdue overseas holiday, a new pair of bootcut jeans for the office, or some overpriced scrambled eggs on toast for my three-year-old daughter.

The economy is at the top of Australians’ minds for a third year running, according to data from Dentsu Intelligence, beating out climate change, war, the housing market (with the exception of Gen Z) and surprisingly unemployment, which recently hit a two-year high.

But things might be looking up.

This month, the Westpac-Melbourne consumer sentiment index hit a 20-month peak. Although the prevailing mood is still one of pessimism, “there finally looks to be some light at the end of the tunnel for Australian consumers”.

What this means is there might be some opportunities for businesses, and marketers, on the horizon, despite some significant challenges that remain.

Perhaps the biggest looming challenge businesses need to grapple with is the unpredictability of shoppers. Much like my daughter’s scrambled eggs that end up anywhere but on her plate, things are a little messy at the moment. And this is unlikely to change anytime soon.

Humans are terrible at staying the course on their stated intent at the best of times, but in the current environment that’s ratcheted up to 100. People are switching away from their preferred brands at the point of purchase. They may change categories mid-journey. Or even walk away from buying entirely. A lack of confidence paired with a tightening of the purse strings does some strange things to people.

This means shoppers are not moving through the sales funnel in any orderly fashion, which for marketers means assuming brand and performance activities can’t play nicely together is not really reading the room at a time when people don’t really know which way is up.

Shoppers are out there constantly looking for confidence that a brand is the right choice at the same time they need the confidence to spend on products and services.

Trusted brands have a bit of a headstart here. They are our old favourites, those menu items we instinctively turn to when we’re uncertain because they provide a sense of comfort and reliability. On the flipside, because we know how good they can be, they also come with our highest expectations and therefore the potential to disappoint us the most. With great power comes great responsibility.

Trust cannot be taken for granted, it must be continually reinforced by turning up consistently. While brand purpose has a lot to answer for, it asks a very important question: Why do you do the things you do, and for whom?

Right now it’s important that the answers to those questions are brought to life in a way that’s grounded in the world of the customer and reflected in everything a business does. When times are tough, the worries of the world (and seemingly those of a barista taking our coffee order) take a back seat to those we’re facing closer to home.

This means prioritising activities that demonstrate a genuine commitment to supporting customers through these personally trying times. This is not about single campaigns or one of those tear-jerking brand executions like the many we saw during the heights of Covid. It’s about understanding people’s spending patterns and struggles, then translating that into something meaningful and tangible that we can do to assist.

Providing confidence to people based on having real human empathy for them – something that for all of its passing the Turing Test-like intelligence test AI has yet to fully master.

If all this makes a lot of good sense, then this is why it really matters: we don’t quickly forget those who help us.

“Anyone who ever gave you confidence, you owe them a lot.” That’s a quote from Truman Capote, author of Breakfast at Tiffany’s. It’s not just a cult classic, but a rather convenient place to find inspiration right now when the general mood is less about diamonds and more about breakfast.

Tim Mottau is strategy partner at Dentsu Creative