This article is selected from the topic of "Economic Stagflation and Changes in the Resurrection Period", and subsequent releases of this series will continue to focus on this topic. Click to go to the special page

Summary

In the difficult environment, marketers will definitely have to "ride the wind and waves" in the next few quarters, and maintain advertising according to the situation. This practice is still applicable in China; at the same time, this kind of long-term work and short-term needs to deal with consumer changes. Need is a work that needs to be balanced. This is a realistic basic skill for enterprises to go upstream.

  • Analysis by Publicis shows that the conversion rate of alcohol brands that communicate closely with consumers keeps rising before and after the lockdown; for FMCG brands that were hit hard at the peak of the lockdown, the difference between their advertising perceptions and purchase intentions Contact remains the same
  • Short-term reductions in advertising can deprive brands of their preferred position in consumers’ minds when spending power recovers, and smaller brands still need to consider the timing of advertising given that the recovery is usually V-shaped
  • In an era where every penny must be put to good use, brands should not link the short-term behavior of consumers that may disappear in the next month with the long-term brand strategy, but identify trends that continue at different stages and adjust accordingly.


With the impact of the new crown epidemic, soaring unemployment, plummeting consumer confidence and other signs suggest that marketing will struggle in the second half of 2022. Repeated epidemic lockdowns have increased the uncertainty of economic development.

For marketing, it is not surprising to grow with the trend when the economy is booming, but if the economy is down, if it can go against the current, it will really excel and stand out. The next few quarters this year and 2023 will be a test for marketers as they must ride the waves and grow against the trend.

From the author's point of view, 2022 has already told us that marketers who are well versed in the laws of market operation can help companies view short-term economic fluctuations (even downturns) in a long-term perspective.

Such companies can also assess the situation and seize the current opportunities to launch group purchase packages, open up logistics channels, and emphasize home use scenarios to successfully market their products and win in the moment. It is also that they can maintain advertising investment, ensure the presence of their brand in the minds of consumers, and even seize the opportunity to seize a larger market share.

We all know today that continuing to cut advertising spending kills brands.

There is a trove of industry data and marketing guidelines for brands to navigate a recession, and in a fast-moving, digital-first, innovation-driven market like China, the principles themselves still hold true.

Looking at different categories, we found that brands with high visibility, strong brand value and advertising awareness tend to be more resilient to the impact of economic downturns, and consumers maintain purchase intentions for this type of brand.

In the beauty industry, we have seen high-profile brands maintain high conversion rates:

In the alcohol industry, the conversion rate of brands that communicate closely with consumers keeps rising before and after the lockdown:

For FMCG brands that were hit hard during the peak of the lockdown, the link between advertising perceptions and purchase intentions remained the same:

When product sales drop sharply, brands tend to cut back on advertising spending, but at this juncture, the importance of brand trust and recognition becomes more prominent. Consumers have become relatively conservative and are reluctant to try new brands, opting instead for brands they already trust. This short-term decision to cut advertising during the lockdown means brands will lose their top spot in consumers' minds when their purchasing power recovers.

Of course, when revenue declines, not every brand has enough cash reserves, so there's no guarantee that they'll be able to keep the business running while maintaining ad spending. But brands should also keep in mind that post-lockdown recovery is often V-shaped, so smaller brands need to consider the timing of their ad placements to ensure consumers will also consider buying their products when the economy improves.

Of course, we also have to make strategic adjustments, which is also necessary.

Lockdowns and restrictions under the influence of the new crown epidemic in 2022 have spawned many new consumer behaviors. However, it’s easy for companies to take nuanced changes in consumer behavior as a sign of impending long-term change, mistaking short-term changes as the norm. In an era where every penny has to be put to good use, brands need to beware of falling into marketing traps and avoid linking short-term consumer behaviors that may disappear in the next month with long-term brand strategies.

After the first wave of the epidemic in 2020, the stay-at-home measures led to a high level of escapism, and people were more immersed in movies, social media and games. In 2022, when the lockdown measures were taken again due to the epidemic, people had long since noticed it, and paid more attention to how to maintain normal life and how to live every day well. The topics discussed at home every day also reflect the social changes of the new crown epidemic: frequent nucleic acid testing and the improvement of health awareness to strengthen epidemic prevention and control have made fitness a routine.

Here, this article lists some emerging trends from the short-term, medium-term, and long-term, so that the corresponding brands can refer to:

short term

Short-term trends caused by changes in the environment and consumer behavior will quickly return to the pre-sealing normal

Hero "Captain"

With the gradual recovery of express delivery services, people no longer need self-organized community group buying. During the lockdown period, many "heads" played the role of superheroes, and now the demand is no longer urgent. Although some "heads" are still the core figures of the community, most of them have "removed the shirt of heroes" and returned to daily life .

happy currency

Two weeks after the lockdown in Shanghai, the phenomenon of bartering peaked, and now the discussion of this topic has fallen back to the normal level before the epidemic. During the lockdown, nearly 25% of the discussions revolved around Coca-Cola. Everyone used canned Coke as a medium of exchange, and Coca-Cola became hard currency. This is an extension of the trend in 2020 that carbonated beverages began to be called "happy water for fat houses", and it fully demonstrates that carbonated beverages are a source of daily happiness for people in difficult times.

stockpile

Although online discussions and searches for hoarding have dropped significantly, the news of the lockdown will trigger a wave of hoarding, and any trouble will bring the phenomenon of hoarding back to life again.

medium term

The runway for such trends is longer and will continue in the next few quarters

big upgrade

After staying at home for longer, many consumers choose to upgrade and optimize their home experience, such as buying larger refrigerators and small appliances such as air fryers. It can be seen from the search during 618 in 2022 that the overall search volume for home appliances has increased by 1.3 times.

However, given the long life cycle of home appliances and the softening of the real estate market, which reduces demand for home renovations and new home purchases, home appliance sales conditions may return to normal in the second half of the year.

home

With many outdoor activities still restricted and anxiety about contracting Covid-19 still lingering, the recovery in restaurants, travel and retail will be more subdued. While we say retaliatory consumption will undoubtedly come, many people will still choose to stay at home, which means they will spend more time on various media platforms. Brands can seize this opportunity to better connect with consumers by hosting concerts and various online events that can be attended at home.

long

These changes will have lasting and profound effects, and household savings and their impact on consumer spending are also worth watching

Buy another day (maybe)

Consumer confidence is currently at its lowest level since January 2020. Many consumers remain on the sidelines with big purchases, and uncertainty about their future means they will spend less.

The implementation of the current bulk consumption stimulus policy is not as effective as in 2020. Taking car purchases as an example, despite Shanghai's decision to add 40,000 license plates for non-commercial passenger cars and provide tax subsidies, consumers still choose to postpone purchases.

Group buying development

Before this year's epidemic was closed, group buying existed. However, during the lockdown period, the number of group-buying users increased significantly (compared with a year ago, the daily active users of the community group-buying applet “Kui Tuan Tuan” increased by 442%). In addition, as more and more merchants enter the group buying platform, the practicability of the group buying platform has been significantly improved.

While the group buying category is unlikely to continue to grow at this rate, mainstream group buying platforms will continue to have these sizable numbers of new users.

As for the main reasons for people to continue group buying, the first is that group buying can help consumers buy sought-after cheap products, and the second is convenience.

body and mind health

During the lockdown period, the volume of searches/social discussions on mental health increased by 24%, and many people were in a state of high anxiety. Paying attention to mental health gave everyone a more comprehensive concept of health. Looking back on 2020, everyone is more concerned about physical health and diet, while during this lockdown in 2022, there will be more public discussions about mental health.

Summarize

In challenging times, there is no newly developed panacea that will help companies win.

The need for long-term brand building and the short-term rapid adjustment to consumer changes, this topic is an art about weighing the pros and cons and how to balance it.

It's skinny and not sexy, but it's this basic skill that allows brands to thrive and thrive.