Making PR and comms recession-proof and being ready for the ‘Great Wealth Transfer’
What’s not to like?! Historically the definition for public relations is: “the activity of keeping good relationships between an organisation and the general public.” But it is of course so much more complex than that, and purely gaining a better, different or elevated brand positioning is not enough in a challenging economic climate. In board meetings, in-house comms professionals (or marketing individuals working with external PR agencies) are expected to demonstrate commercial impact or some sort of contribution to the sales funnel, whether it’s a big or small company. As PR professionals, we might not have sales KPIs, but we need to take stronger accountability for supporting the sales teams’ objectives in more economically turbulent times.
The marketing and communications budget is often one of the first to be cut when an economic downturn hits because we’re perceived as a ‘cost centre’ rather than revenue generator. However, as we all know, reducing marketing spend means fewer sales and less revenue, ultimately compounding the problem.
In a recession, companies will be looking at purchases more carefully, weighing up perceived value for money. PR is not a luxury, it’s a prerequisite for a brand to attract new customers and stay at the forefront of existing customers’ minds.
‘New School PR’: Partnerships with commercial impact
Beyond some of the immediately impactful marketing tactics, such as tightening up tech stacks and reviewing the digital strategy, brands should practise ‘new school PR’ and ramp up their focus on modern, future-focused partnerships. Recession or not, beyond media relations, we put a strong emphasis on collaborations with like-minded brands for two key reasons: to access new databases and inform exciting, new angles for media relations.
We explore tie-ups from fashion brands to financial institutions. In luxury PR, it’s very easy to stay siloed in the world of lifestyle, rather than cross-pollinate with the corporate world. Corporate brands offer a whole, newset of potential clientele, with an often higher net-worth. Therefore, we make it our business to investigate private banks, wealth management, and family offices, as much as the luxury lifestyle brands that others are instinctively drawn to.
The ‘Great Wealth Transfer’
In the UK, over 80% of household wealth is held by the over-45s, and over the next 30 years, a record £5.5 trillion is set to be transferred between generations, in the form of either inheritance or gifts (according to the Office for National Statistic). To target a younger demographic, there needs to be considerable thought put into who to partner with – brands with purpose; Environmental, Social and Corporate Governance (ESG) considerations; progressive in the virtual Web3 world of the Metaverse, gaming and NFTs; and strong Diversity, Equity & Inclusion (DEI) principals.
Millennial & Gen Z Purchasing Drivers
To some, the luxury industry connotates excessive consumerism, disposable income, and guilty pleasures. Yet Millennials and Gen Z consumers expect brands to be aligned with their values. The younger, more affluent generations are acutely conscious of the environmental and social impact of their purchase decisions and are more likely to buy from a brand that resonates with their own personal values and ethos.
With these evolving purchasing drivers, brands need to always be authentic in marketing and communication as consumers are savvy to the prevalent and almost ubiquitous greenwashing. There is also a balance to strike for younger consumers between balancing transparency with exclusivity – in a digital age of TikTok and Instagram in particular, consumers are hungry for more information from real people, therefore companies have to open their doors and let people have a glimpse behind the scenes, to see and hear from artisans and the craftsman working, for example, something particularly unnatural for usually polished brands.
The race is now on for luxury brands to shed some of their outdated traditions and join Gen Z’s ranks, to become early adopters in an entirely new, ever-evolving landscape.