As Cost-of-Living Rages On, New Dentsu Data Unveils How Brands Can Stand Out

As UK consumer confidence falters under persistent economic pressures, global marketing group dentsu's latest ‘EMEA Consumer Navigator Report’ reveals new opportunities for brands to adapt and grow by understanding the evolving consumer mindset.

With four in five (80%) Brits perceiving the economy as being in poor shape and nearly half (46%) struggling to afford some essentials like food, utilities, and rent or mortgage payments, consumers are shifting their spending priorities - forcing brands to rethink how they engage their audiences.

This transformation in consumer behaviour is not just about spending less but spending differently. The report outlines actionable strategies for brands to navigate this complex landscape, delivering impactful customer engagement and business growth.

Adapting to changing spending habits

Consumers are prioritising essentials like groceries while postponing larger, discretionary purchases such as technology (66%) and luxury goods (70%). However, they are still indulging in affordable comforts with increased spending on dining out (33%) and fast food (32%). Brands must seize these opportunities by:

- Targeting "Affordable Indulgence": Develop messaging and products that align with consumers' need for small but meaningful rewards.
- Ensuring Contextual Relevance: Tailor advertising to moments when consumers are most receptive to engaging with brands, particularly during treat-seeking occasions.
- Delivering Seamless Digital Experiences: As consumers make more careful spending decisions, convenience in online and app-based interactions becomes a non-negotiable element of engagement.

Harnessing the power of social commerce and apps

Dentsu’s data reveals that the shift toward digital interactions is accelerating, with one in five (21%) consumers expecting to shop via social media in 2025 - a number that jumps dramatically among gen z (67%). Apps are also becoming indispensable tools for managing purchases, though the report highlights the surprising demand for in-person reassurance among younger consumers for complex transactions, such as financial services. To grow in this space, brands should:

- Invest in Social Commerce: Seamlessly integrate shopping experiences on platforms like Instagram and TikTok, where gen z and millennials are increasingly active.
- Create Short-Form Interactive Content: Prioritise snackable, engaging storytelling to capture the attention of younger demographics.
- Strike a Balance Between Digital and Human Connection: Build trust by offering a hybrid approach, combining intuitive digital interactions with accessible human support.

Building loyalty through trust and values

Economic challenges have magnified the importance of loyalty and trust, but these attributes are evolving. The report reveals generational divides, where older consumers value rewards and loyalty schemes, while gen z emphasises ethics, sustainability, and brand purpose. To strengthen relationships, brands need to:

- Personalise the Consumer Journey: Leverage AI-driven insights to tailor offers, loyalty programs, and experiences to the priorities of different generations.
- Emphasise Brand Purpose: Clearly communicate values and demonstrate authenticity to resonate with socially conscious younger consumers.
- Prioritise Transparency and Trust: Especially critical in sectors like financial services, trust remains a cornerstone for older audiences, while convenience and ease of use appeal to younger generations.

Transforming for long-term success

The report stresses that economic uncertainty is not a fleeting challenge but a permanent reality, requiring brands to embrace transformation at every level. Future-ready strategies include:

- Embedding AI and Predictive Analytics: Anticipate consumer needs and optimise marketing efforts with data-driven precision.
- Expanding Retail Media Capabilities: Allocate advertising budgets more efficiently by investing in retail media platforms.
- Delivering Connected Experiences: Ensure a seamless flow between online and offline touchpoints to meet rising consumer expectations.

What brands must do to thrive

The ‘EMEA Consumer Navigator Report’ makes it clear: brands must evolve or risk falling behind. In this new era, winning over consumers requires focusing on affordability, convenience, and authenticity. Brands that embrace these principles, coupled with data-driven decision-making and business agility, will not only survive but thrive.

Dan Truman, chief strategy officer UK&I at dentsu said, “Against the current economic backdrop, it’s unsurprising that consumer habits are shifting. As consumers look towards newer purchasing channels, like social media, it provides a unique opportunity for brands to meet them where they are. To be successful across these channels, brands must listen to their audiences, understand the pressures they are facing and be able to respond quickly. It’s only then that they’ll unlock the insights and services that sets them apart and drives long-term engagement.”

Kenyatte Nelson, chief membership and customer officer at Co-op said, “As consumers continue to battle the cost-of-living crisis, the retail industry needs to step up and meet them halfway. At Co-op, we firmly believe in the importance of understanding and responding to the needs of our customers - our recent price match initiative, both in stores and online, was a direct result of this. Dentsu's Consumer Navigator Report provides further evidence that truly listening to the voices of those who shop with us day-in, day-out will set us apart – in both today’s climate and the future.”