The baffling Brexit

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Brands will need to expand their strategies to better support, help and service a sizable consumer group, Britain's low-income workers, writes the worldwide director of the Innovation Group at J. Walter Thompson

To look at Facebook and Instagram, it’s easy to suspect you’re living in an alternate reality. At least you’ll be baffled as to how the Brexit decision was able to occur.

The shock, ridicule and humor — sometimes outrage and dismay — is virtually immersive in its unison. Josh from Peckham "cannot bloody believe it." Charlotte from Islingon is "moving to Australia." Richard Branson — in a rapidly shared note — is encouraging British citizens to sign a petition for a re-referendum.

If "we" all feel like this, then how could it have happened? We’re all on the same hymn sheet, surely?

But then, as a middle-class, educated, urban, young adult (originally from London), with the same set of peers and influencers as most middle-class, educated, young(ish) Londoners out there, that’s part of the problem.

We’ve all been talking to ourselves.

It’s also a problem for marketers, because it bares an uncanny correlation with how brands and marketers tend to view consumers or at least focus their attentions.

Certainly trend forecasters look to small groups of young, educated, well-off (or solvent) urban groups because these historically are the earliest adopters of trends. It filters from there. They’re the ones that dye their hair pink first, or buy groovy new Vegan lubricant (currently being touted on Goop by Gwyneth Paltrow) and organic shampoo. Eventually it filters out to the shelves of Walmart. In the Innovation Group, we also talk about "Millennial behaviors," not just millennials, because increasingly "millennial behaviors" are being adopted by baby boomers, Gen Xers and beyond.

However, as we’ve seen from Brexit, there’s a large disparity between big groups of society and the homogenized idea of affluent Millennial culture, which has somehow become pervasive and accepted as the norm. It’s a very specific "norm," and there are big groups that sit outside this who are also increasingly influential, politicized and eruptive.

In Brexit, the two dominant groups who voted to "Leave" were older Brit nostalgics mourning our loss of manufacture and eroded NHS, and groups from Wales to Northern England (outside the affluent South East) who have been left behind by the UK’s economic transformation into a service economy.

The latter economically challenged groups — leaving politics to one side — are also a sizable consumer segment. And one that is set to grow even more following last week’s decision. Brands will need to expand their strategies to support, help and service them.

According to The National Institute of Economic and Social Research in the UK, low-income households are set to be among the hardest hit if the U.K. leaves the European Union. In the worst-case scenario, different categories of poorer households could receive between £1,861 and £5,542 ($2,692 and $8,018) less in tax credits and benefit payments in 2020.

Brands are being held to account for how they treat groups outside the typical wealthy urban targets. Amazon was recently criticized for rolling out its much-vaunted same-day Prime delivery service to 27 US cities, but only to selective ZIP codes that tend to have fewer minority residents. It hastily promised to correct this, but the fact that same-day delivery services were seen as a political issue underscored their relevance to wide swaths of the population, not just the affluent.

The plight of America’s low-income workers has been in the headlines repeatedly for the past two years — the spotlight of the Internet and social media means brands are being called out publicly for their treatment of staff. Dunkin Donuts received criticism in 2014 when a New York shift worker, doing four jobs, died in her car sleeping between shifts (she left the car on to stay warm and died from carbon monoxide poisoning). McDonald’s is currently under attack for its low salaries, with the "Fight for $15" leading large protests. Brands that are part of the on-demand app economy have also been under fire for their reliance on cheap labor, and classing workers as contractors not employees so they do not receive typical employment benefits.

It’s part of a growing trend in which consumers — increasingly politicized in general — are starting to call out brands for any number of things, from their product, tone of voice, sustainable behavior to marketing and product chain.

Including how they treat their workforce.

But there are opportunities in servicing and championing this group and it involves thinking beyond "cheap" by any means. (Let’s not forget, big global food chains have also been criticized for their highly processed GMO, Corn, and sugar-laden goods.) The antidote is pioneering healthy fast food chains, such as California-based LocoL, founded by Roy Choi, who has innovated to create healthy, affordable fast food using local suppliers for low-income consumers.

Winners in the UK budget supermarkets Aldi and Lidl are fast-growing success stories, offering low-priced fresh produce and food. Both are undercutting competition further by introducing highly competitive, cheap private label groceries. Ikea has also been working to elevate the design standards of its affordable, sustainably produced furniture.

Successful brands in the future will work hard to deliver on price but also quality, becoming mission-led benefactors and innovators. Because, if the signs are anything to go by, low-income consumers in the U.K. will need all the help they can get.

Lucie Greene is worldwide director of the Innovation Group at J. Walter Thompson.

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