Economists in Canada have been talking about how the Canadian economy has been rebounding for months now, especially with the increasing employment rate. More people are back to work, and things appear to be stabilizing. That being said, deputy chief economist at CIBC World Markets Benjamin Tal recently reported on the status of the economy, looking at consumer spending, and his predictions are not nearly as promising, especially for CPG brands.
With respect to consumer spending, Tal remarked that “Canadian consumers are exhausted. Worry over housing prices and debt, coupled with the knowledge that economically things are still quite tenuous, has led to consumer fatigue, and Canadians are not spending the way that they used to be.” Tal states that the Canadian debt load has a lot to do with this consumer fatigue. The debt to income ratio for Canadians has risen from around 140 to 165 percent, and as a result the decision to purchase is now heavily influenced by a number of new factors.
This trend is especially challenging for top tier brands whose products may be more expensive. If a customer is looking for price first, then CPG brands who sell bigger ticket products must do even more to entice new customers and ramp up brand loyalty with respect to existing customers.
These trends do represent an important opportunity for brands to be one step ahead of economic forecasts and place an emphasis on strengthening brand loyalty. Ever since the recession hit in 2008, consumers across the country have been paying close attention to promotions, and switching to different products that may offer the same or different benefits. The trend still seems to be price over quality or a balance between the two.
Not sure how to make these trends work for you? Consider experiential marketing. If a consumer has the ability to try a product that may not be their usual brand, and find that they like it, the decision to purchase your brand rather than a competitor’s is an easy one. Furthermore, if the product demonstration includes a promotional coupon, the chances of shifting brand loyalty are further increased.
The fact though that cost is important does not mean that consumers who are concerned about cost necessarily want to skimp on quality. If your brand is great, consumers will continue to purchase even if your price is a little higher. With experiential marketing you get the chance to show those customers why it was that they either chose your product to begin with, or arguably more important, why they should switch to your product and buy it from now on.
For more information about how to leverage experiential marketing to increase brand loyalty, or to find out about any of our merchandising services, please contact Storesupport by calling 1-877-421-5081 or visit www.storesupport.ca.