How should marketers prepare for a consumer spending drop?

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by Samuel Pordengerg Dec 2, 2022 News
How should marketers prepare for a consumer spending drop?

The cost-of-living crisis is predicted to hit London, Oxford, and Brighton the hardest.

The financial landscape in the UK is set to get worse in the years to come. According to experts, disposable income will fall by 9% after paying for essentials, following reports that discretionary spending fell over the last year.

As prices continue to rise and living standards are going to fall, marketers need to be aware of the current financial situation.

According to analysis from Jaywing, the least affected areas are: The cost of living model created this insight. The self-learning tool models a snapshot of income and costs, forecasting this over time using expected mortgage and rental changes, along with food, energy, and travel inflation. When new data becomes available, the model will revise its hypothesis to provide up-to-date insights into how the recession is impacting areas across the UK.

The model is designed to help inform marketing activities by understanding the cost-of-living crisis on a deeper geographical level, as well as providing insight to understand where it would be beneficial to increase spend or targeting, and what regional adjustments to make.

Dave Wood, Director of innovation at Jaywing has shared his top tips for implementing learnings that drive insight and decision-making to enable effective strategies during uncertain times.

It is important to keep an eye on the effectiveness of your media spend to understand where to invest in the current economic climate. Econometric model-based scenario planning gives effective forecasts for clients based on different marketing mixes but also varying macro- economic trends in tandem to enable brands to fine- tune their strategies accordingly.

During a turbulent period, marketers need to use data and insight to reappraise and fuel new understanding of their target audiences. Recessions change how customers behave and are a good place to start. To improve your ability to maintain and increase lifetime value, you need to be able to identify and target high value customers.

During times of financial difficulty, using data to personalize the customer experience has a positive brand-building effect. It's important toOptimise content with personalisation through historic data and predictions to engage more meaningfully.

Dave commented, "We have begun using this model for clients and are acting on recommendations regarding where and how to spend budget over the coming months." We will use the predictions made by the tool to create plans for possible changes to the country's financial situation.