Understanding the Nation: What does the cost of living crisis mean for tech brands?

Caroline Coventry

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As nearly every household in the UK scrutinises spending in the face of rising inflation and increasing cost of borrowing, within recent history there has never been a greater need for support, advice and tools to see us through – what will be – a prolonged reality. 

Overall, the cost of living is growing at its fastest rate in almost 40 years. According to the Office for National Statistics, UK inflation stood at 9.9% in August and the Bank of England expects ‘inflation to stay at or a little above 10% for a few months.’

Walnut Unlimited’s Understanding the Nation, survey of 2000+ UK adults explored the relationship between new technologies and personal finances (carried out between 30th June – 11th July 2022.)

Interestingly, the research found that 30% of UK households use technology more due to their household’s financial situation. 

However, before brands consider capitalising on this, it’s essential that they stop to consider whether their actions are delivering genuine value. Because if the veneer is paper thin, people will see straight through it.

A Reach survey found that 60% of consumers are expecting brands to help them through the cost of living crisis with spending habits changing across the country in order to save money. 

Some brands are, brilliantly, getting it right; driving true value for customers through their communications. So who are they?

Which brands are doing their part in the cost of living crisis? 

Channel 4

Perhaps the most innovative campaign to help support the general public with the cost of living crisis comes from Channel 4. 

In a unique collaboration, the free-to-air broadcaster placed a bespoke ad break featuring seven UK brands, all of which provide offers or services to help viewers save money. The ad break ran during Steph’s Packed Lunch and Gogglebox on Friday 7th October.

Those brands that supported Channel 4’s campaign include:

  • Boots
  • Co-Op
  • Giffgaff
  • GoCompare
  • Lidl
  • Nationwide Building Society 
  • Vodafone

After a brief introduction from the broadcaster explaining the special ad break, each brand listed above aired its own advertisement aiming to help people and families during the current climate. 

The timing of the ads is worth highlighting; designed to maximize reach among families with young children, who might be feeling the pinch more than others. 

Virgin Media

Telecommunications giant Virgin Media announced it is cutting the price of its essential broadband package in response to the ongoing cost-of-living crisis.

The plan is priced at £12.50 pm for 15Mbps speed and is aimed at supporting those on Universal Credit. The firm also introduced a plus plan, priced at £20 pm for 50Mbps fibre broadband. Both plans have no fixed-term contracts or activation fees. 

Chief operating officer Jeff Dodds confirmed recently that Virgin Media has called upon the government to cut VAT on social tariffs, which would reduce the price to £10.93 for 15 Mbps and £17.50 for 50 Mbps respectively.

In addition to the above, the broadband provider is actively working to implement automated checks for customers to help confirm their eligibility for social tariffs with the firm to minimise time spent when reviewing applications with the view of expanding its social tariff schemes to people receiving pension credit and other benefits. 

Where Virgin Media is leading, other telcos are following, with Vodafone announcing just this week that its Essentials Broadband will be reduced by 20%, to just £12 per month. 

Iceland Food Club

Ok, so this isn’t a tech brand but it is a sublime example of a communications campaign that is truly helping people. 

Supermarket chain Iceland launched a ‘shop now pay later’ initiative to support customers struggling with food shops, in partnership with non-profit lender Fair for You. 

The Iceland Food Club provides short-term microloans between £25 to £75, acting as an interest-free loan and a safer alternative to mainstream lenders. The scheme is repaid at a rate of £10 per week.

Following an initial trial in Yorkshire and North Wales, the supermarket reported that 92% of members reduced or stopped their reliance on food banks. This acts as just one part of their ‘Doing it Right, Right Now’ campaign. 

The scheme is now available nationally and anyone can apply, with a preloaded card given to those who are successful, that can be used both in-store and online. 

What can we learn from this about how brands can better position themselves as a company that truly cares?

It’s easy for any brand to push out a press release or publish an advertisement acknowledging the current environment but brands must convince consumers with clear actions of goodwill. It’s so easy to be another drop in the sea of blue.

As we move further into the unknown, many people will no longer be on the lookout simply for good value or bargains, they will be seeking genuine help. 

Truly understanding the need, tailoring your messaging and reshaping your strategies to give consistent support will be vital in achieving brand goodwill. 

As Faric Yakob summarised succinctly for WARC: “Corporate actions speak louder than advertising when so many will be forced to choose between heat and food this winter.”