Brands and consumers are not aligned

In the current, uncertain economic times, consumers have naturally shifted their priorities, becoming more financially cautious. However, brands haven't adjusted their thinking to match.

In fact, while customers are looking to stretch their budgets as much as possible, businesses are focusing on other, less impactful areas. Such a big disconnect could spell danger, making it harder for brands to connect with their customers. Only brands that align their growth strategies with their customers’ priorities will be more resilient, able to navigate uncertainty during the next evolution of commerce.

Global report provides insights into consumers’ behaviors

For the 2023 Evolution of Commerce Report, PayPal commissioned Forrester to conduct two surveys among Enterprise Businesses and Consumers in five global markets: Australia, France, Germany, United Kingdom and United States of America. We wanted to know how businesses and consumers react to the economy, their preparedness and priorities into 2023.

The conclusion is clear: With 66% of global consumers surveyed afraid of a potential recession and more than three-quarters (79%) being financially cautious, brands need to make sure they’re meeting consumer needs closely to win a share of their wallet¹.

But while consumers have reacted quickly to changing circumstances, cutting back on spending and generally behaving in a more financially cautious manner, our survey would suggest that businesses haven’t necessarily kept in sync with their customers’ priorities. This could prove problematic as brands choose strategies that end up resonating less and less with their consumers.

Brands are prioritizing the wrong tactics

For example, brands think that ESG (Environmental, Social and Governance) is important to consumers, with 35% of companies surveyed looking to source ethical materials and a third focusing on their political or social stance².

However, only 20% of the consumers considered ethically sourced materials when looking for a brand, compared to the 60% who look at brand affordability¹. Worryingly, less than a quarter of brands (24%)² think affordability should be their priority. This is a significant gulf in perception at a very critical time.

Brands are sometimes working along the right lines. For example, the surveyed global brands’ think consumers consider reviews when deciding which brand or retailer to purchase from (26%)². This is clearly something that is important to consumers, with 53% of whom surveyed say they prioritize reviews, showing that they want reassurance they’re going to get value for money¹.

However, brands and consumers diverge again, with the former preferring to focus on easy-to-use product recommendation tools (78%) or expanding their social media presence (77%)². With reputation a priority for 35% of consumer respondents¹, brands should be highlighting their trustworthiness, instead of investing in more website tools or social posts.

Consumers have shifted their priorities

Understanding what customers want in a cost-of-living crisis doesn’t mean abandoning previously closely held brand values such as sustainability or stopping investment in customer experience innovations like a better website. However, there is currently a significant difference between what customers want, and what brands think they want.

While seemingly conflicting interests may sound concerning, there are several positives to be drawn. Not least, because answering consumer needs largely means capitalizing on what brands already have.

Boosting reputational credentials, publicizing previous positive customer experiences while working to make sure they have the most competitively priced yet quality product possible will bring brands into alignment with cost-conscious consumers. This will be needed if organizations are to weather the current economic turbulence.

To learn more about how to attract more consumers and increase sales with fresh global insights, check out the 2023 PayPal Evolution of Commerce Report.