Brand Authenticity: How to create wins for consumers and companies during inflationary times
Inflation presents new risks for mental health
As of January 2022, inflation was a top concern for a third of Americans, second only to COVID and the general economy.1
The psychological impacts of economic downturns go beyond financial woes. Inflation has exacerbated feelings of hopelessness and burnout in a population that was already emotionally depleted after the COVID pandemic.2
On top of it all, we’re facing substantial uncertainty — when inflation will stop, lingering effects of the pandemic, global politics, climate change, the list goes on. Humans aren’t built for this much uncertainty: we’re wired to eschew ambiguity. It’s not surprising, then, that consumers are seeking a sense of reassurance and rejecting risk whenever possible.1, 3
References
- Smith, J. W. (2022). Inflation and Risk Reduction. Kantar Group. Retrieved June 27, 2022, from https://www.kantar.com/-/media/project/kantar/global/articles/files/2022/inflation_and_risk_reduction-final--j-walker-smith_kantar.pdf
- Epstein, Y. M., & Babad, E. Y. (1982). Economic stress: Notes on the psychology of inflation. Journal of Applied Social Psychology, 12(2), 85-99.
- Ambiguity effect. The Decision Lab. (n.d.). Retrieved July 14, 2022, from https://thedecisionlab.com/biases/ambiguity-effect
- Perkins, T. (2022, April 27). Revealed: Top US corporations raising prices on Americans even as profits surge. The Guardian. Retrieved July 14, 2022, from https://www.theguardian.com/business/2022/apr/27/inflation-corporate-america-increased-prices-profits
- Leonhardt, M. (2022, January 26). Del Taco launches $2 value menu to lure customers fed up with inflation. Fortune. Retrieved July 14, 2022, from https://fortune.com/2022/01/26/del-taco-2-dollar-menu-customers-inflation/
- Chew, S.-C., & Markey, R. (2019, May 13). The power of consumer loyalty in a downturn. Bain. Retrieved July 14, 2022, from https://www.bain.com/insights/the-power-of-consumer-loyalty-in-a-downturn/
- Hooker, C., Capon, A., & Leask, J. (2017). Communicating about risk: strategies for situations where public concern is high but the risk is low.
- Noble edge effect. The Decision Lab. (n.d.). Retrieved June 27, 2022, from https://thedecisionlab.com/biases/noble-edge-effect#:~:text=What%20is%20the%20Noble%20Edge,That's%20the%20noble%20edge%20effect.
- Council, R. S. C. (2021, May 24). 15 telltale signs of inauthentic marketing that could be hurting your brand. Rolling Stone. Retrieved July 14, 2022, from https://www.rollingstone.com/culture-council/panels/signs-inauthentic-marketing-1173668/
- Ogilvy Consulting. (2022, May 20). Value-based innovation: How brands can thrive in times of inflation. Ogilvy. Retrieved June 27, 2022, from https://www.ogilvy.com/ideas/value-based-innovation-how-brands-can-thrive-times-inflation
- Ogilvy Consulting. (2020, April). Advertising during a crisis - ogilvy. Ogilvy. Retrieved July 15, 2022, from https://www.ogilvy.com/ca/sites/g/files/dhpsjz126/files/pdfdocuments/COVID19_Advertising_During_A_Crisis.pdf
About the Authors
Dan Pilat
Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.
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