At present, there are many external factors that are having an impact on the economy and thus on consumer sentiment: be it inflation, which has not yet leveled off in many countries, instability of political systems, or tensions within societies and climate change. These uncertainties do not really stimulate consumption. And this is also shown by the figures of GfK: in January to April 2023, total sales in USD in the consumer goods market fell by -8.5%. For the full year, a more stable result is expected though, but still no growth.
A remedy for uncertainty: trust and security!
Uncertainty puts a strain on every relationship. Be it a personal or a business one. And just as strong personalities can radiate trust and security, strong brands also have the possibility to win over consumers with these factors. Brands are thus becoming a strong asset and are currently the strongest growing sales argument. According to gfknewron Consumer 42% of consumers have recently decided to buy a product because of a brand – that is 4% more than in H2 2021. Price certainly remains the strongest factor, but it is not reliably stable. Prices are likely to change rapidly and eventually it will lose importance as a purchase driver.
Brand trust provides orientation
The reputation of a brand provides orientation and supports the purchase decision. In analyzing point-of-sales data, GfK was able to evaluate that, of dominating and leading global brands, once they have more than 10% share in their market* they are outperforming the market. Jan Lorbach, Senior Director Strategic Insights at GfK, comments: “Building and expanding a brand credibly not only pays off from a marketing perspective but can have a significant impact on sales in times like these. Communicating consistent brand values to consumers is more important than ever.”
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Based on a new partnership between GfK SE, gfu Consumer & Home Electronics GmbH and IFA Management GmbH, we are providing regular information on market developments and trends in the consumer electronics and home appliances industry. Interesting insights, current market figures, consumer trends and much more will be professionally prepared for you from the sources of the three expert partners.
* in one region for one of their portfolio product groups