Sponsor Impact report and Depop have built businesses around this, brands out of 10 countries less than half feel they are on a and retailers are now getting in on the act as seen financially sound footing. with Cos Resell and Selfridges Resellfridges. Michela What is interesting about the current food and Graci, strategy partner at design agency Coley Porter energy price crunch is that all sorts of organisations Bell where she works across clients such as Tesco, from charities to brands to central bank governors Mller, Foxs and Premier Foods says this is are interested in how people are reacting and sustainable behaviour; it builds brand loyalty, behaving, says Ipsos CEO Ben Page. A key finding potentially brings in new shoppers, and there is the is that, in most countries, consumers are still halo effect of being seen to do the right thing. underestimating how bad it might get. Of course, we can see people switching to private brands, moving to the discounters and cutting their discretionary spend Staying relevant and connected on eating out, big-ticket items such as cars, and on But what of luxury brands? How should they behave major household goods but, so far, not asking for given their well-heeled target market is far less likely wage rises. These remain well below inflation; we will to have to cut back on spending? be tracking how this changes. The COLC is an interesting issue for the luxury The cost-of-living crisis is only just beginning and end of the market, notes Graci. While luxury its consequences are unpredictable. For countries brands tend to be well insulated from the impact of that import fuel and food, it may be existential. the mass population having to tighten their belts, they Much of North Africa and some Asian countries do have to be cautious about coming across as face much more severe problems than the UK, a still insensitive and tone deaf. In this social media age, relatively rich country. The long-term political that is quickly jumped on and lambasted, which can consequences, as with the [financial] crash of 2008, damage brand value. are not immediately visible, but they will For some luxury brands, this is an be in years to come. opportunity to come across as more Page rightly points out that charities relevant and better connected to local are taking a keen interest in the COLC, The disconnect between markets or communities. It requires which is understandable given the the hipster marketers and an inclusive, rather than exclusive, potential revenue squeeze and rise in CEO-billionaires bubble and approach and can help luxury brands costs that many are facing. Research the rest of the country has appear more culturally relevant among 547 charity leaders, conducted rarely been more apparent especially to Gen Z. by YouGov in April on behalf of the Laurent Mans-Murphy, general Charities Aid Foundation (CAF), found manager for new markets at customer that one-third fear for their survival, and 86% are agency C Space, says consumers have different worried about the impact that rising living costs are mental wallets when it comes to spending. By which having on people who rely on their services. he means people still need moments of indulgence Responding to the findings, Alison Taylor, chief and seek status, while being prepared to compromise executive of CAF Bank and Charity Services, warns on more functional items. Mans-Murphy makes the that the sector faces a perfect storm, with tightening point that its easy to be simplistic and assume that household budgets impacting donations and rising people are cutting costs across the board and looking operating costs and, sadly, this means some for cheaper versions of everything yet, decisions are charities are unlikely to survive this year. Many are on often more nuanced and emotionally driven than that. tenterhooks, waiting to see how far the squeeze on Sustainable options are definitely feeling the pinch consumer finances erodes charitable giving and trying among those customers who are in transition between to figure out how they can mobilise those least less and more sustainable living, down to those who affected by the crisis to do more. still see it as a premium-driven enterprise that is out of In the private sector, brands are responding to some reach completely, Mans-Murphy remarks. clear consumer behaviour shifts in several ways. Whether it be EON sending socks to customers, Smart frugality is a mindset being championed by SSE advising them to keep bills low by cuddling pets, brands from IKEA to Barclays, where taking a more or the CEO of Utilita suggesting people wear jumpers prudent approach is encouraged as the way all instead of turning on the heating, some brands have sensible shoppers should head. This has the double made gaffes when addressing the spiralling costs of benefit of being positioned as financially astute and their services. There is clearly a need to build sustainable, as it better protects the Earths resources. customer empathy among marketers and leadership Continuing with this theme, several brands are to help them better understand what their consumers embracing the second-hand marketplace. While eBay are going through. The disconnect that exists 24 Impact ISSUE 38 2022_pp20-29_Report.indd 24 22/06/2022 15:31