Consumer Confidence Plummets in Europe
Consumer confidence in the Euro Area plummeted in March. The
monthly decline in confidence was similar to the drop recorded in April 2020,
when European economies were shut down in response to the pandemic. Does this
mean that the economy will plummet along with confidence? It’s too early to
tell, say Marketing & Communications Center Leader Ivan Pollard and
Economist Klaas de Vries. While it is certainly not a positive signal, it
should be assessed in conjunction with other indicators that point to some
strength on the consumer spending side, including a tight labor market and
healthy household balance sheets.
Yet, for many consumers, the essentials like food, energy, and transport are
already taking a larger slice of disposable income, and the opportunities to
market new, higher priced, experience-led discretionary products and services
are narrowing. Marketers should build brand preference now by communications
and actions that reflect the sentiments of each particular country. At the same
time, they should manage expected returns on brand and promotional investment
in the context of decreased spending.
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