How Uncertain Times Can Impact Your Brand Choices

In times of uncertainty – which, with COVID-19, we’re all familiar with these days – consumers often buck the brand choices they’d normally make and gravitate toward the opposite, finds new research from Maryland Smith. For consumers that pin themselves as usually global-minded, uncertainty pushes them to local brands. The converse is true for people who usually shop local.

Smith marketing professor Ali Faraji-Rad worked with Sharon Ng of Nanyang Technological University in Singapore and Rajeev Batra of the University of Michigan on the research, published in the Journal of Marketing Research. They ran five studies to look at how consumers see themselves as global or local citizens, and how uncertainty – like the upheaval caused the COVID pandemic, or political unrest – impacts their brand preferences.

The researchers found in “normal” times of certainty, consumers prefer brands that align with their self-identities – think “citizen of the world,” or “proud American.” During normal times, global citizens gravitate toward global brands, and people who identify most with their home region prefer local brands. But that flip flops when uncertainty erupts: Global citizens buy local and local folks try global brands.

“We find that under conditions of certainty – when things are pretty stable – people go with their identity,” says Faraji-Rad. “But when there is uncertainty, like what we have with COVID, for example, or when there is economic uncertainty, people actually go opposite what they usually identify with.”

It’s a bit counterintuitive, says Faraji-Rad, because usually in times of uncertainty, people want to affirm who they are. So why the opposite effect?

“These identities are not either/or – they are a little bit more versus less,” he says. People don’t see global and local as opposites – they can have different identities, simultaneously. And uncertainty pushes people to think differently, tapping into that other part of their identity, he says.

“When uncertainty comes into play, it creates a need for creative problem-solving and that pushes people to try something new. Let’s say I’m global; normally I would go with the global brand, but now I want to be a bit creative, so I’ll go with the local brand.”

However, the researchers did find one scenario where this didn’t happen – when participants were told it is not possible to identify as both global and local, that these two identities are incompatible. In that case, people stuck with their stronger identity in brand decisions, even during uncertainty conditions.

Faraji-Rad said these effects could play out with other facets of identity beyond just global and local mindsets, and beyond branding decisions.

Faraji-Rad says marketers can use the research findings:

“It’s not as straightforward as ‘I’m a global brand; I’ll go with the cosmopolitan consumers, who are probably more global; or I’m a local brand, I’ll go with the local consumer. But the paper suggests, in times of uncertainty – like right now – actually, the opposite might be better.”

Read the full research, “Uncertainty Evokes Consumers’ Preference for Brands Incongruent with their Global–Local Citizenship Identity,” in the Journal of Marketing Research.