The cost of essentials has increased dramatically over the last few years, with a growing number of people feeling the pinch. The cost of living crisis is a worldwide phenomenon, with average global inflation at 6.8% in 2023. The high prices of groceries, electricity and petrol in Australia have led to many people struggling to pay bills and feed their families, with 3.7 million households battling high levels of food insecurity last year.
Several factors have been said to have contributed to the crisis: the COVID-19 pandemic, the Russia-Ukraine conflict and its supply chain disruptions, inflation with the lack of wage growth to match, and stark income inequality, among others. As major corporations continue to reap massive profits by charging more for essentials, average Australians are tightening their belts and spending less. Younger people under 35 have been the largest group to cut back on discretionary spending.
The situation may look dire for both retailers and marketers, but there’s hope. There are signs of economic recovery on the horizon. As economic relief kicks in, spending will increase, and brands will still need to differentiate themselves from their competitors in positive ways. A good marketing strategy has always required an empathetic approach that meets the needs and addresses the pain points of your target demographics.
As a full-service creative marketing agency, Anchor has helped purpose-driven brands grow and reach larger numbers of people who can benefit from their products and services. We’ve seen the strategic differences between brands that flourish in changing times and those that stagnate. Even during a cost of living crisis, we can provide your brand with effective marketing solutions to adapt and thrive.
How the Cost of Living Is Impacting Businesses
According to the Australian Bureau of Statistics (ABS), living costs reached a record high in early to mid-2024, outpacing inflation. Total living costs rose between 7.1% and 9.6% for all households, compared to a mere 7% rise in inflation. Businesses have also been feeling the pinch, with some passing the cost onto customers in the form of higher prices.
Smaller businesses have been hit much harder than large corporations. According to Xero’s eye-opening ‘Money Matters’ survey, small businesses are facing some of the most challenging economic conditions in recent history. Over 60% of businesses that took part in the survey had cash flow problems of some kind, and more than a quarter have had to dip into their own savings to keep their businesses running. Approximately half have experienced stress, anxiety and difficulty sleeping due to their economic situation.
Small-to-medium-sized businesses are facing increased pressure on several fronts: rising operational costs, shortages and delays from suppliers, and difficulty keeping their products at the same prices. Businesses have adapted in different ways: holding higher levels of stock to offer bulk pricing, ramping up their marketing efforts, introducing new low-cost items, and adjusting prices. Some have taken advantage of grants or stimulus packages aimed at small businesses.
Tips for Creating Effective Marketing Strategies for the Cost of Living Crisis
Here are some tips for creating a successful marketing strategy that continues to get results even during the cost of living crisis:
Focus on value for money
While cheaper prices can help, focusing on the value proposition of your product can also be an effective way to appeal to certain demographics. You can emphasise that while you may have a higher price than some of your competitors, you’re also offering a higher level of value that will make a major difference to the kind of experience they have. You can build authority and credibility by emphasising the experience and expertise behind your products, highlighting the lifetime value they bring and providing testimonials from satisfied clients and customers.
Offer discounts
During a cost of living crisis, one of the biggest challenges for businesses is that consumers have limited disposable income. You might worry that offering your services at a discounted rate will hurt your brand reputation and devalue your product in the public’s eyes. But when times are tough, there are several benefits to offering discounts. It can keep your products accessible, give you a competitive edge, stimulate demand, attract new customers and demonstrate empathy for those going through tough times, which encourages customer loyalty.
Use the most cost-effective channels
In the best-case scenario, you’d like your brand to be visible everywhere people look. However, during a cost-of-living crisis, focusing only on your most profitable channels is often the most effective strategy. By using analytics tools to check the conversion rates and other performance metrics of each marketing channel, you can identify which ones currently provide the highest level of value to your business.
Use agile campaigns
When you’re on a tight budget, it pays to be agile in your approach to your campaigns. Agile marketing is about being flexible, adaptable, and responsive to the market’s changes. It means using data and analytics to source promising opportunities or solutions in real-time and rapidly pivoting when required. Agile marketing prioritises opportunities or tasks that are likely to deliver the best possible results in the shortest timeframe.
Provide new products
Launching new, more affordable products can mean providing an alternative to your more upmarket range during a cost-of-living crisis. When launching new products, it helps to emphasise value and affordability, offers introductory promotions, highlights how they can address customers’ pain points, and focuses on the marketing channels your audience spends the most time on.
Innovative Marketing Strategies for the Changing Market with Anchor
Anchor Digital’s approach is to adapt to the changing conditions of the market while staying true to timeless principles that always work. Our flexible approach requires adjusting our strategy for changes wherever they occur, whether in the digital marketing space, society, or Google’s algorithms.
Rather than optimising everything we can just because it’s there, we make sure we have the right marketing strategy in place to communicate the right information, in the right way, about your brand. If you need to build your strategy from scratch, we can help you identify your unique selling proposition (USP) and find vital information on the right demographics. Through services like brand strategy, brand positioning and market research, we’ll help you identify what you do better than your competitors and share it with the world.
You might be offering the best deals and the biggest bargains, but it’s hard to get noticed in the first place without good rankings and performance. Most web users will abandon a page if it takes more than three seconds to load. With our performance services, Anchor can make sure your website is fast and responsive both on laptops and mobiles. We also provide search engine optimisation (SEO) and pay-per-click (PPC) services.
We can build you creative assets that truly showcase your brand identity and values to the world in memorable and unique ways, from copywriting to video.
If you’re ready to improve your marketing and sustain your results even during tough economic times, contact the Anchor team.
