After several years of a growing economy and an optimistic environment in the country, 2016 was a year when uncertainty about the future began to show in Colombians.
On the one hand, it was a year of good economic growth, progress in the peace process, and infrastructure development. On the other, it was also a year impacted by the fall of oil prices, the Boy Phenomenon, which influenced the internal dynamics, border problems with our neighbors Ecuador and Venezuela, and the sharp increase in the price of the dollar.
Economic growth (GDP) was 3.1% in 2015, a figure below the goal set by the national bank —3.6%— but above the average growth of Latin American countries. Commerce and the public sector (infrastructure works) benefited from this dynamic.
While the economy grew, inflation did too. There had not been such a high inflation level in the country (6.77%) since 2008. This generated an atmosphere of mistrust among consumers, and an apparent reduction in their purchase power. In 2016, this showed in the fall in the volumes of some goods and a lower frequency of visits to retailers.
This is when uncertainty began getting hold of Colombians, reducing consumers’ trust and their willingness to buy durable goods.
In addition to this, there was political pessimism, a polarization of opinion surrounding the peace process, and constant speculation concerning the price of the dollar.
Undoubtedly, 2017 and the coming years represent a big challenge for brands. How can they get the attention of consumers and be significant to them amidst such a volatile environment? How can brands engage consumers with a reduced purchase power, when they are worried about their immediate future, and distracted by so many issues?
Today, Colombian brands need to find a purpose that is relevant to today’s Colombians, one that helps consumers’ make their lives better and easier. Brands need to give consumers reasons beyond functional needs, to make sure their brand is chosen over the competition.