As the ‘Eat Out To Help Out’ scheme comes to an end, figures from the first 3 weeks show that Britons used the scheme over 64 million times. This staggering number accounts for people who have moved their chosen evening out to earlier in the week and those who would not otherwise have gone out. The offer has represented a real change in the UK’s restaurant behaviour; OpenTable, the online reservations platform, reported a 61% rise in Mon-Weds bookings vs 2019. This spending takes place against the backdrop of the worst UK recession since records began. Therefore it seems strange that consumers are so keen to spend their disposable income. However, the lipstick effect helps explain this phenomenon and provides an opportunity for brands to offer real value to consumers through this difficult period.

For those who have not come across the lipstick effect before, it is an economic theory that suggests a reduction in big-ticket luxury expenditure in times of a recession leads to an uplift in small ticket luxury expenditure. This explains why people are looking for affordable ways to treat themselves. ‘Eat Out To Help Out’ aligned the core aspects of the theory – treat and low price point – and combined them with ease of use to create value in the mind of the consumer.

As we’ve been confined to home for large portions of 2020, treat has become synonymous with being out and about, and with holidays less accessible than they once were, eating out is filling this gap for the time being.  the7stars quarterly tracker of UK adults, highlighted this month that Brits are planning to spend less on long holidays (24%) and short breaks (22%), while 8% plan to spend more on eating-out and takeaways in the year ahead. Food is, in fact, the only surveyed category that has seen an increase in plans to spend. Nonetheless, price, offers and deals are the most important factors reported for grocery selection over the next six months. It stands to reason that this price sensitivity effects their out-of-home food choices too, with the government framing the ‘Eat Out To Help Out’ scheme as a saving representing a powerful, time limited offer of value to consumers.

In combining high value propositions with messaging that speaks to the current moment, brands can steer consumer behaviour as they start to look for small luxuries. Recent research from TVSquared demonstrated that TV ads explicitly mentioning the Coronavirus Crisis are three times more likely to resonate with viewers. What that ‘value’ is for a brand will depend on the price sensitivity of their target audience, but combining this messaging with products that are considered an indulgence is an impactful way to acknowledge the challenging times we face and enable consumers feel good about treating themselves to life’s smaller luxuries this year.

https://www.bbc.co.uk/news/business-53911505

https://www.theguardian.com/business/2017/jul/15/the-lipstick-effect-britons-treat-themselves-as-budgets-tighten

The QT, August 2020

https://tvsquared.com/tv-talk-the-halo-effect-with-effectv

 

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