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Brands and the Budget.

Brands and the Budget.

The latest decline in GfK’s consumer confidence index and a tough Spring Budget remind us that brands must work harder to meet the needs of the UK’s Marginalised Masses.

Over the last three years, BJL has been monitoring a group of increasingly squeezed UK consumers, labelled the Marginalised Masses. These are people resorting to extraordinary lengths to pay for everyday essentials; using credit, dipping into savings, or borrowing from family and friends just to make ends meet.

Our research project began in 2014 when then Chancellor, George Osborne, talked about seeing “the green shoots of (economic) recovery”. It seemed at odds with our own experience, so we decided to investigate — to uncover more about the real state of the nation’s finances and find new ways for brands to respond.

The project found that people were indeed struggling – and modifying their spending in response. A whopping 61% of the consumers we spoke to identified themselves as belonging to the Marginalised Masses. When we questioned them again in January 2016 their behaviours were becoming entrenched, with 61% still belonging to the Marginalised Masses, rising to 62% in December 2016. It soon became clear to us that this new consumer group is here to stay.

Published just before this week’s tough Spring Budget, which included measures set to hit the self-employed and savers alike – GfK’s data points to the same conclusion as our study; it shows the extent to which people think their personal economic situations are continuing to slip. Consumers feel their finances have taken a turn for the worst over the last 12 months and worry this trend will continue in the year ahead. As a result, they reveal they are less likely to make a major purchase in the near future.

What’s really interesting here, is that people are feeling this personal financial anxiety despite the fact they think the overall economy has improved in the last 12 months — and will continue to do so. This juxtaposition is creating a feeling of being ‘left behind’, adding a sense of isolation to consumers’ practical financial difficulties.

Against this unsettling backdrop, people are looking to brands to ’be on their side’ and deliver real value.

Our Marginalised Masses project has included qualitative research, which has helped us to work out in more detail how brands can do this.

As you’d expect, it confirmed that good pricing is key for this group. They now make time to seek out value. Whereas in the past, this might have caused embarrassment, in these straightened times, bagging great deals has become a badge of honour.

But brands need to look beyond pricing, to more sophisticated dimensions of brand value. We found seven other ‘dimensions of value’ brands can leverage. Critically, they give brands that wouldn’t necessarily see themselves as ‘value’ brands the means to deliver to this audience — looking at everything from providing utility to tapping into the emotional value of experiences and memories.