The New Normal Is Expensive: Here’s How Brands Can Still Win

Advertising Week| March 10, 2025 | By Kevin Ryan, Client Success Manager, Nativo

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“It’s not going to get better.”

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This is the new chorus of nearly every conversation about the U.S. economy, whether televised or around the dinner table. The problem is that the hardships faced in the last decade are no longer being viewed as exceptions, but rather as evidence of a new norm. After a brief respite, inflation has returned as a dominant economic force, despite President Trump’s promise to curb inflation on “day 1” of his administration.

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As new tariffs exacerbate the impact of soaring inflation on both consumers and businesses, February saw the sharpest monthly drop in consumer confidence since August 2021.

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And it is having a predictable effect on consumer behavior; a study released by Wells Fargo tells a grim tale of how reality is setting in with consumers:

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• 90 percent experienced “sticker shock” during common purchases.
• 60 percent (up from 45 percent in 2024) are making tough financial decisions due to prices.
• 76 percent (up from 67 percent in 2024) are cutting back on spending.

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Travel plans, weddings, home purchases, education, and retirement are all being affected. The study also details how 86 percent people are tired of hearing the same old advice about budgeting; more than half of respondents feel they have too much debt or have little left to spend after paying bills.

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It’s a tricky environment for marketers. How can you be sensitive to the woes of today’s consumers while still keeping the lights on for your company?

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Rethink Value Messaging: How to Justify Every Dollar

Consumers are increasingly asking, “Is this worth it?” Brands must clearly communicate why their products justify the cost—whether through quality, durability, or long-term savings. Especially for premium brands and big-ticket products, this means shifting messaging from “luxury for luxury’s sake” to investment in quality and identity to avoid alienating the public.

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Expect to see a resurgence of creative messaging around these ideas in fashion, consumer goods, and automotive marketing. A prime example of positioning that will thrive in this context is Mazda’s “Jinba Ittai” marketing, now nearly 10 years old. Grounded in the company’s design ethos, the campaign characterizes cars as more than just vehicles—they’re an extension of the driver’s spirit. This kind of storytelling recasts the decision as a question of identity, not just money. The emotional bond between the driver and the car helps justify a slightly higher price tag and could help Mazda stand out in a market where specs and price are differentiating brands less and less.

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For budget-friendly or “everyday” brands, it’s important to emphasize cost efficiency, deals, and affordability, not just price. Walmart’s “Rollback” pricing strategy does this perfectly by reassuring shoppers that they are making smart financial decisions; it continually reminds consumers that prices are actively being reduced by prominently featuring “everyday low prices” and visually tagging items with rollback stickers. It amounts to a symbolic shorthand through which Walmart signals to inflation-wary customers that they can shop without constantly worrying about price hikes. And it plays directly into the zero-sum mindset: “If I can only buy certain staples, I might as well go where I consistently get them cheaper.”

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For durable goods and pricier products, framing purchases as smart investments, not splurges, will persuade reluctant buyers who would rather “buy for life” than regret their purchase. Lifetime warranties and satisfaction guarantees, like those offered by Columbia Sportswear or Away luggage, promise longevity and dependability at a time when it feels hard to rely on anything.

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Leverage the “Lipstick Effect”: Small Luxuries Still Sell

Even in economic downturns, people crave small indulgences. The “lipstick effect” suggests that while consumers cut back on big-ticket items, they still spend on affordable feel-good purchases like premium coffee, craft beer, or beauty products. Brands should position their products as little luxuries that bring joy without breaking the budget.

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Modelo’s “Brewed for Those with a Fighting Spirit” campaign, for example connects ideas of resilience and cultural pride to its beer, making it more than just a beverage—it’s a reward that you earned. By tying the act of enjoying a beer to personal pride and collective identity, Modelo elevates its product into a small luxury.

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In times of belt-tightening, consumers are more likely to indulge in something that resonates with their values, and more likely to react negatively to wastefulness or excess. Brands that tap into the trend of “treat yourself,” without veering into lavishness will win here—which is why snack, candy, and dessert brands have enormous potential to grow this year. People are cutting out the vacation, they’re but still allowing themselves small pleasures.

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And what about travel? Well, it is already being linked to identity as Canadians cancel U.S. vacations en masse to protest tariffs. For some Americans, traveling internationally could represent an act of protest, or a chance to “test-drive” living abroad. For U.S.-focused brands, the key is going to be offering more weekend getaways; attractive discounts or packages for airfare, hotel, and entertainment package; or compelling arguments for how travel supports locals. Messaging that positions travel as a way to enrich yourself and support communities, like Alaska’s focus on experiencing indigenous cultures, are poised to earn travelers’ business.

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The economic reality has changed, and marketing must change with it. Consumers aren’t just tightening their budgets—they’re reevaluating their relationships with brands. They don’t want empty discounts or tone-deaf luxury messaging. They want justification, trust, and products that add real value to their lives.

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This isn’t about reacting to inflation; it’s about recognizing that consumer expectations have permanently evolved. Marketers who embrace this shift by reframing purchases as smart investments, offering small luxuries that still feel attainable, and aligning with deeper consumer values will win.

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Read the full article on Advertising Week

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