Cost of Living Crisis: Providing Value Through Achievement
We’ve been crunching the consumer stories for our forthcoming Hidden Stories of Value report, looking at the markers of value that can help brands navigate price, product and promotion during the cost of living crisis.
The crisis is clearly on everyone’s mind and something consumers are associating with their imagined future behaviors are cost saving strategies. But cost-saving means different things to different people. For some it’s cost-cutting – cutting back, buying cheap and potentially switching to own brands. For others it’s bargain hunting – looking for the best deals when they shop. And for others it can mean a change in lifestyle – reconsidering how lifestyle changes can give the best value.
However, one key element we’ve noticed about when people tell stories of cost saving strategies is that consumers don’t always link good value to price. Overlaid on to good value and budgeting is a behavioral aspect in the sense of achievement when finding a good deal. This can be an important distinction to make for retailers.
For many consumers the idea of finding a visible good deal allows them to feel a sense of achievement. They feel good about themselves and their efforts to budget, and they feel like they don’t have to compromise on quality. The obvious area where retailers can make gains then, is in discounting. Rather than trying to just keeping prices low, or banking on a move to own branded goods, visible strategic discounting can clearly resonate with consumers as a lever in building a sense of good value for a retail brand overall.
That’s not to say that discounting is the only factor in good value when it comes to shopping. Price and affordability, and good quality, are also important drivers in understanding how people perceive value. However, discounting can be a lever that allows retail brands to move up the value rankings with consumers.
As you can see from our ranking here, Aldi and Lidl are perceived as good value for consumers due to a combination of price, affordability and their status as discount stores. The mid-range supermarkets and the Marks and Spencer’s and Waitrose’s of this world are perceived as good quality, but lack perceptions of affordability that Aldi and Lidl have for many consumers. However a discounting strategy in product and communications could be a lever in which those retailers can compete with the cheaper supermarkets and raise their value scores without having to compete on price alone.
To understand more about the markers of good value, and how your brand can navigate the price, product and promotion during the Cost of Living Crisis sign up to our webinar on the 23rd February. Webinar: Remain “need to have” when belts are being tightened.