Think Forward with PayPal

The Role of Brands: Empathy in Uncertain Times

Through good times and challenging ones, companies stay competitive by embracing new opportunities and staying ahead of consumer expectations. But in an era of constant change and economic upheaval, flexibility and adaptability has become core to business success.

PayPal has teamed up with TrendWatching to Think Forward to the future of business for enterprises. In this, we explore how progressive companies are responding to turbulence and uncertainty. Emerging trends highlight how business reinvention incorporating people and prioritizing empathy is helping to bolster brand value for both consumers and employees.

Savings by design: Value, redefined

Budgeting is important, particularly now. Shoppers appreciate brands that help them save — and that expectation will outlast the current cost of living crisis. Expectations around value are being recalibrated and brands need to demonstrate their product is worth the price. 96% of consumers surveyed intend to adopt cost-saving behaviors in 2023. 42% of those consumers reported their intent to significantly decrease their spending.⁶

Economic uncertainty is forcing many people to re-evaluate their priorities. Brands need to pay attention: 34% fail to justify their current price¹ and shoppers are switching up their behavior — trying private and own-label, or second-hand.

With 34% of global consumers willing to buy previously owned items,² the global second-hand apparel market will grow three times faster than the apparel market overall by 2027.³ This behavior, while born out of necessity, is increasingly reducing the stigma around shopping pre-loved. Although 75% of global consumers agree that environmentally responsible products became more expensive from 2021 to 2022,⁴ the majority say they are at least somewhat willing to reduce their consumption by half to avoid environmental damage.⁵ Brands that are able to help consumers economize and live more sustainability will tap into the new perception of ‘value’.

Tools and services that help consumers economize need to be integrated into existing customer journeys. AI can also play a role here.

Collaborative solutions: Doing good together

Complex and interconnected risks — such as inflation, trade wars and low growth¹² — won’t be solved by just one company. Brands embracing collaboration and forming unexpected cross-sector partnerships are making a difference.

Consumers expect brands to be a force for good: 79% of the world’s citizens think that brands can make money and support good causes.¹³ To meet this expectation, and face the risks and challenges at hand, collaboration is crucial. Partnerships, especially those that span industries and geographical borders, will help brands develop resilience through shared resources and knowledge streams. 26% of organizations are already partnering with established companies/competitors to create new sources of value.¹⁴ It’s time for businesses to explore expanding their scope of collaboration to build cross-sector alliances that could start to tackle both longstanding concerns and new issues.

Partnerships don’t just benefit organizations — they can also benefit the consumer. Forward-thinking companies will collaborate with a host of brands and startups.

Skills for all: Investing in talent

The tech skills and core competencies required for work are changing at a more rapid pace than ever before. With AI and automation changing the workplace, reskilling and upskilling of employees will be key for business reinvention and future-preparedness. Forward-thinking brands are extending these initiatives to future employees too to truly deliver skills for all.

Global C-suite leaders are concerned about labor supply and the availability of critical skills to meet current demand. 38% of CEOs and CFOs plan to accelerate reskilling current employees.²² Talent is a crucial source of advantage and companies that focus on people can perform better in times of uncertainty.

The need for upskilling isn’t relegated to the workplace. Young people are concerned their education is falling short: 37% of global Gen Z think that their school education didn’t give them the technology skills they need for their planned careers.²³ There’s an opportunity for brands to step in to help fill this gap — after all, these students are potentially your employees of the future.

While there is a clear business imperative for upskilling, consumer sentiment is increasingly shifting towards brands that take care of their employees: 89% of global citizens expect CEOs to take a public stand on the treatment of employees (this ranks higher than climate change and discrimination).²⁴

Upskilling the community: Creating opportunity

A partnership between nonprofit Generation Australia and Microsoft was established to help train unemployed or underemployed individuals in cloud computing, data analytics and cyber security. Learners are offered paid internships. To date, over 1,000 learners have undertaken a Generation Australia program.²⁸

Assessing the existing internal skills gap against business priorities is the first step. Learning and development tools can be rolled out to consumers, creating new revenue streams:

• Assessments will help HR and Learning & Development leaders identify skill gaps and develop customized training programs accordingly. Mapping gaps against business priorities will aid business reinvention.
• Sharing programs designed to upskill employees with consumers and other brands builds new enterprise opportunities, including additional revenue streams through monetization.
• The rise in employee-generated content (content created by employees and shared on social media) can mean that what happens within an organization makes waves beyond the office walls. Fulfilled and engaged employees that share stories about upskilling and more can become brand ambassadors that drive visibility and positive opinion among customers and future staff.

Side hustle heroes: The value of passion projects

Faced with job precarity and a rising cost of living, many people are embracing side hustles to provide supplementary income and long-term resilience. Brands can unlock the value of consumers’ passion projects by providing support and mentorship, a platform or integrating their niche skills within the business.

Economic uncertainty is prompting consumers to take on, or consider, a side job. This sentiment is stronger among younger demographics (65% of Gen Z and 60% of Millennials agree), but other generations want to supplement their income (55% of Gen X, 46% of Boomers).³¹ Hybrid working models make it easier to lean into entrepreneurship, and a widespread reckoning with professional fulfillment will ensure income diversification outlasts the cost-of-living crisis.

Online platforms like Shopify and Etsy make it easier for hobbies to be monetized, and social media platforms allow those pursuing passion projects to build out their own personal brands. Of course, social media influencing can also be a side hustle in its own right.

The global influencer marketing industry is set to reach $21.1 billion in 2023, 67% of brands who budget for influencer marketing expect to increase their influencer marketing budget over the next year.³² Influencers can create more relatable and authentic content and help brands build personal — and profitable — connections with consumers.³³

78% of global consumers say they will be more loyal to companies that help them through presently existing difficult times, such as the rise of inflation, aftermath of the pandemic, and the current geopolitical crisis.³⁹

Periods of turbulence present a unique opportunity for companies to lead with empathy. Consumers appreciate, and remain loyal to, brands that help them navigate through uncertainty.

Practicing empathy could mean supporting those looking to economize or staying attuned to customers’ evolving perceptions of value. It could mean helping people and employees prepare for whatever the future holds shocks by upskilling or levelling up their side hustles. Or it could mean new, unchartered ways of supporting people through difficult times. Organizations that support their consumers and employees in meaningful ways can enhance brand value and build loyalty in the longer-term.