Ukraine and Germany’s ‘fear economy’

The Ukraine war is contributing to a strong sense of uncertainty about the personal and collective futures of German consumers and leading to the emergence of a “fear economy” – one driven more by expectations and fears than by today’s reality.

That’s the conclusion of research undertaken for WARC, by Dr Peter Steidl of neuromarketing business Kochstrasse, as part of a new Spotlight series on the impact of the war in Ukraine. The report is based on a survey of 1000 people in Germany in February 2023. (Read more here.)

Takeaways

• While some consumers are relatively indifferent or complacent, 33% are overwhelmed with fears about the potential impact of the war on them personally and on their country, both in the near and longer term, and another 27% are mainly fearful of the impact on them personally.
• The greatest fears are for their personal financial situation and quality of life, now and in the future; 30% are strongly convinced the Ukraine war will force them to reduce their spending.
• Consumers are looking for strong leadership, an escape from stress, to support those who speak out and demand action, and the company of others.
• The message for brands is that in times of great insecurity, anything that promises respite from fear, or an even fleeting sense of control, will be welcome.
• This can be achieved through tactical communications and promotions, but the bigger opportunity is for brands to step up and take a leadership position on something that matters. Authenticity and creativity will be key to developing compelling new ideas that offer hope that they will make a difference.

Why it matters

The war – along with climate change, the refugee crisis, political upheaval, inflation and the legacy of the pandemic – is having a significant impact on buyer behaviour in Germany. Dr Steidl suggests that we’re witnessing a shift from a growth economy to a “fear economy” and that marketers need to align their strategies with this rapidly changing market environment and move to exploit significant opportunities for demonstrating brand leadership.