Best solution for uncertainty? Remove it
Jon O’Donnell, managing director of ESI Commercial, examines the London advertising market post-Brexit
Last week the Evening Standard hosted its annual celebration of London’s most influential people, the Progress 1000. Held this year at the Science Museum, it is always an eclectic event where politicians chat with film stars, whilst bishops rub shoulders with billionaires. To some this may appear random, but to me this is exactly what London is about, and what makes it great.
London is a city built on collaboration; a melting pot of cultures and ideas, where diverse backgrounds and industries come together to deliver fresh thinking and innovation.
Because of this London is built very differently to the rest of the UK, which means it reacts to events differently. London didn’t vote for Brexit, but it will certainly rise to its challenges. As Sarah Sands, editor of the Evening Standard said, “in the wake of Brexit, our city must be a beacon for the future. It is the creativity of Londoners, from developers to engineers and scientists, which will drive us forward.”
Right now economists and advertisers alike are searching the skies for evidence of Brexit fallout. The signs are contradictory. Permanent hiring has dropped, but so have unemployment benefit claims. Business confidence and business activity has fallen but, after a poor August, there are signs of recovery. Consumer price inflation remains low but consumer confidence has dropped.
How do brands respond to such uncertainty? Well, one certainty is the resilience of London and Londoners.
They are prepared for turbulence, but remain confident. Londoners typically show more consumer confidence than UK consumers in general. The GfK Consumer Confidence barometer shows this to be still true, even after the Brexit vote.
The latest figures, from August 2016, show London to be the first region to climb out of the negative confidence zone. In fact, London’s full time workers never went into the negative consumer confidence zone, unlike the nation’s full time workers overall.
Brands might take heed of this increased confidence in the capital and increase their focus there. After all, there is a high level of physical availability of goods in London to cater for the fact that the capital produces more retail spend than Scotland, Wales & Northern Ireland combined (Mintel).
Londoners are much more comfortable spending money and often have more expensive tastes than the average British worker, particularly when it comes to buying fashion or food and drink on the way home from work.
They are also more likely to shop online on their commute too – Londoners account for two-thirds of all mCommerce spend when commuting (Centre for Economics and Business research).
They are energised, busy people and so much more likely to pay more for goods and services that make their lives easier. According to our audience insight it’s not all work, work, work as they’re also more likely to stop off at a cinema or theatre.
Brexit hasn’t changed London’s role as a national and global powerhouse yet. It probably never will. London’s consumers won’t cease to power the spending and confidence of the nation either.
As for the Progress 1000, we at least now know what the actress said to the bishop; conversations at the Science Museum were filled with optimism about the impact Brexit will ultimately have on the city and its workforce. London has already bounced back and is very much open for business.
If brands want to remove the uncertainty from their marketing they would do well to focus their sights on the capital.