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The cost of living crisis is having both long and short term impacts on the lives of consumers
The 2023 IPA TouchPoints data published today (21 June) has unveiled the stark impacts of the cost of living crisis impacting consumers both in the short and long term.
The data finds that almost 40% of Britons aren’t coping on their current salaries meaning that they are spending over an hour longer indoors while 60% are looking for the lowest prices when shopping, and putting longer-term plans on pause such as changing jobs or moving out of parent’s homes.
The nationally representative survey was carried out on over 3,000 British adults aged over 15 between January and March 2023. It aimed to uncover the habits of British consumers’ daily lives and how their media usage has adjusted in relation to the changing socioeconomic environment.
“The latest TouchPoints data highlights the struggles some people are facing with the cost-of-living crisis. This is impacting their daily lives not only in terms of what they can afford, but what they do, when they go out, when they socialise and crucially for our industry, how they consume different media channels.” explains Belinda Beeftink, Research Director, IPA.
According to the data, 37.6% of consumers aren’t coping on their current salary. A figure which is up 15% from pre-lockdown 2020 (32.6%) and up 22% since the lockdowns in both 2020 and 2021 (both at 30.7%). For the lowest income and disadvantaged groups this figure stands even higher at 60%.
As a result of this, the TouchPoints data reveals that the percentage of people staying in has increased by 66 minutes per day since pre-lockdown 2020. In pre-lockdown 2020, the mean hours spent inside the home was 17 hours 37 minutes per day, which has now increased to 18 hours and 43 minutes per day.
With consumers spending more time in the home, time spent shopping has gone down. The data shows that this is a decline since pre-lockdown 2020. Supermarkets attract the greatest weekly reach of all shopping outlets at 63.3% but down 7% since pre-lockdown 2020 (68%). The weekly reach of the high street has fallen 17% in this same time frame. Online shopping is up slightly, by 3% since pre-lockdown 2020.
As a result, consumers are looking for deals and low prices when shopping. Three-fifths of consumers look for the lowest possible prices when they go shopping, over half of consumers, 52.9%, say they will gladly switch brands to make use of a coupon and almost a third, 32.6%, of consumers often check the comparative online price of a product they are looking at in a store. Brands looking to engage with customers during this difficult time should therefore make use of price reductions and loyalty schemes to gain favour with their audiences.
As financial burdens increase, halting both our short and longer-terms plans, it is imperative that brands and their agencies are mindful of these challenges and work to understand the role we can play in helping to add value to consumers’ lives at this tough time.
Josh Krichefski, IPA President and CEO, EMEA & UK, GroupM
With the economy leaving people feeling uncertain, the data reveals that all generations are increasingly putting long-term plans on hold. The number of people planning to start a university course has fallen 53% and the number of people planning to move out of their parent’s home in the next 12 months has dropped by 29% (from 4.1% to 2.9%).
For people in the midst of their career, the number of people planning to move jobs in the next 12 months has fallen 31% as plans lack stability and the number of those planning on starting a new business in the next 12 months is down 20%. For people at the end of their careers, the number of those planning to retire in the next 12 months has fallen 40% (from 2.1% to 1.3%).
“As financial burdens increase, halting both our short and longer-terms plans, it is imperative that brands and their agencies are mindful of these challenges and work to understand the role we can play in helping to add value to consumers’ lives at this tough time,” says Josh Krichefski, IPA President and CEO, EMEA & UK, GroupM.
The cost of living crisis is impacting consumers up and down the UK as the sentiment is one of worry and mistrust. For brands, communicating with consumers with care and understanding is imperative. Being mindful of the turbulent times people are facing whilst creating campaigns means providing consumers either with the price slashes or value they need. Yet equally providing much-needed escapism and joy can also create moments of respite and connection. As the cost of living crisis leaves many uncertain about their short and long term plans, brands must be prepared to act flexibly and adapt to changing circumstances.
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