Brexit: a planners-eye view
VCCP Media’s executive chair, Marie Oldham, outlines the key effects Brexit will likely have on consumers and how media planning will need to change as a result
According to the Centre for European Policy, the average British household will be £2,496 worse off in 2021. It’s our job as planners to predict how that might affect the clients we work with and the potential consequences for their target audiences.
Will consumers reduce the number of takeaways they order as a Friday night treat? Will they ditch that weekend away on a low cost airline, or switch to a lower cost utility provider? Or will they just keep their mobile phone, car or laptop one year longer to enable them to ride out the post-Brexit storm?
If you had £48 less per week to spend, what would you do?
The double whammy of Covid-19 followed by Brexit exposes the UK to far more than a tussle over fishing rights and the end of CAP benefits for farmers. As we move away from a system of frictionless trade with the EU, our manufacturing industries may lose contracts, face higher prices for components and increased wage bills.
This will not only result in higher prices – eating into the disposable income of our target audiences – it will drive unemployment as companies shrink or close altogether.
The North West and Midlands are likely to be worst hit, as they depend on manufacturing and finance for over 50% of the GVA (gross value added) generated.
Consumers living in areas such as Solihull, Cheshire and Telford will be more tightly squeezed than those in Exeter or Swansea, where public sector services may be more protected.
These are just some of the areas identified by the Social Market Foundation as most vulnerable to decline. As planners, we need to become more immersed than ever in the detail of regionality, local influences on consumers, key employers and shifts in the prosperity of cities and towns around the UK.
Of course, Brexit won’t just hit the industrial, hard-working towns of the UK. Financial services is in fact the most vulnerable sector in the post Brexit world.
As the UK relinquishes the financial passport that allows trade across EU markets, research by the Centre for European Reform suggests that even with a free trade agreement (FTA), the financial services sector could experience a 59% reduction in EU exports. This puts consumers living in Swindon, Surrey and even Tower Hamlets in the firing line.
Those dependent on banking, insurance and trading for a living will see entire companies leave the UK, reduced staffing in others and a shift in employment opportunities over the next 5 years.
Covid has emptied the City of London in the short term and possibly changed working patterns forever, but Brexit will have long term negative effects on the sector.
Before Covid arrived on our doorsteps, 7,500 jobs had already moved out of the UK to Dublin, Paris and other EU cities – and this is likely to double over the next two years.
For those of us with clients dependent on affluent adults, personal wealth management and high income families in the South, we are likely to see scrutiny of high tech purchases, further shifts to repertoire grocery shopping and declines in travel; not to mention smaller changes in use of support services such as the cafes, dry cleaners, taxis and gyms that depend on a vibrant financial sector.
However, Covid may actually have provided a test run for how many consumers will response to Brexit and there is much we can learn.
I believe there are behaviours we have seen emerge or consolidate during 2020 that will only strengthen in the face of Brexit challenges.
Focus on British
During Covid we have battened down the hatches and looked to support our own. As we separate from the EU, consumers will want to “build Britain” by supporting our manufacturers, our emerging tech companies and our hero British brands.
In the short term at least, we are likely to see consumers look to product provenance both as a mark of quality, but also as an opportunity to personally help re-build Britain.
Humanising organisations
Again, Covid has opened the door into demonstrating “brand doing”. How are organisations actively helping communities? How is “my money” being used for the greater good?
This is more than just CSR. Consumers want to know who is offering apprenticeships, who goes that extra mile, and who is behind their food, their tech and their environment.
Many brands will approach this as “act local”, as we clearly see a shift towards smaller brands supporting local business and providing local employment.
However, even for bigger brands this shift means understanding the increasing sensitivity around data privacy, employee protection and profitability. The “Rashford Effect” is likely to continue, with consumers unafraid to challenge “bad” behaviours and put their full weight behind “doing the right thing”.
Genuine sustainability
No longer a niche concern, the combined efforts of Greta Thunberg, David Attenborough and Chris Packham have embedded the importance of tackling the effect of our behaviours on the future of our planet across all generations.
Covid may have provided time to think, time to change our consumption patterns and to look again at alternatives to plastic, throwaway fashion and excess packaging. A tougher economic climate brought about by Brexit is likely to focus on reducing waste, re-using where possible, spending wisely and acting ethically.
British brands benefit from fewer miles, smaller footprints and a strong recycling infrastructure.
Now is the time to weave together “Britishness”, brands that care, and brands that act into a strong proposition for consumers who have a heightened awareness that the world is changing.
We have learned much during Covid and it will shape our response to Brexit. Change can be an opportunity to choose wisely, think differently and break out of previously held ideas of normality.