What globalisation’s divided future means for brands

It’s a challenging time to be a global brand particularly when international relations are affecting how people feel about a brand because of its association with a specific country.

Tensions have been rising amid uncertainty on tariffs and trade policy from the Trump administration in the United States, but there are larger dynamics which have been forming over many years, and a lot of nuances to explore in how consumers feel about globalisation.

In our Ipsos Global Trends study, we used the term ‘Globalisation Fractures’ to describe this shift in attitudes and behaviour around the interconnected world.

For the past decade, we have seen a slow rise in citizens around the world believing that globalisation is good for their country, and 60% agree that globalisation is good for them personally.

However, that landscape has taken a sharp turn in the last six months:

• The proportion of global citizens who believe America will have an overall positive influence on world affairs has fallen in many countries over the last six months. Only 46% across 29 countries say the US will have a positive influence, down from 59% prior to the presidential election.
• Half of Britons now think that Britain should prioritise a closer trade relationship with the EU, even if it means increasing barriers to trade with the United States — up significantly from 42% in March, demonstrating the impact of US tariffs on public perception.
• Americans are not aligned behind the Trump administration’s policies on international trade, tariffs, and foreign policy. Half of all Americans disapprove of the way President Trump is handling international trade, and only 31% of Americans believe the US is headed in the right direction on broader foreign policy.

These are all examples of how the geopolitical environment has grown more contested in recent years, with political leaders increasingly asserting the primacy of their nation above others. Immigration policy and the impact on local jobs is part of the issue, but it’s also tied to national pride and the badge values of brands.

How does this impact global brands?

Certainly the volatility and financial impacts of the trade war are impacting American brands at home, who have been warning shareholders about the negative impact on their bottom line.

But consumer attitudes toward a brand’s country of origin will have an impact on performance as well—for example, there is a growing movement in the EU to shift away from buying American, which may benefit other global brands as well as local ones.

Regardless of their origin, global brands were already facing some significant challenges before the splintering began. For years, private label offerings have been increasing their quality and speed to market – and eroding brand loyalty for traditional brands.

Globalism is also reflected in choices between local and global brands. Ipsos trends studies have consistently found that a majority of citizens think local brands make better quality products. In fact, only 33% of Europeans agree that “global brands make better products than brands that are just local to my country”.

So what’s a global brand to do – especially with a growing negative sentiment toward American brands? In light of rising tensions, some brands such as Coca-Cola are already leaning into emphasising the “localness” of their brand in markets outside the US. On the other hand, some brands are holding fast to their identities as American brands and even vowing not to raise prices despite the impact of tariffs, as footwear brand Keen has just done.

But brands everywhere should take note, as this is a complicated and quickly changing landscape.

Think global, act local: Why customer-centricity will drive market successRising sentiment against globalisation may drive preference for “local” products, boosting regional economies and supply chain stability and providing an opportunity to dial up messaging around all local players in the value chain. Even global brands can play up their local ties — while also highlighting the benefits of their scale. Does your brand have a unique story to tell here, either locally or regionally?

Trade conflicts and supply chain interruptions are prompting some consumers to hedge against rising prices, scarcity and trade disputes by stocking up and buying big ticket items. However, they may not be able to due to high prices already being caused by tariffs. How can you balance the need for security with the challenges of a faltering economy?

With the preference between global and local brands becoming tighter and more competitive, it’s worth taking a fresh look at your true competitive set and considering how you might adjust your approach to match shifting consumer preferences. What unique value can you offer that combines the benefits of globalisation with the appeal of local or national products?

What factors are driving this?

In order for global and local brands to strategize within this challenging environment, it’s worthwhile to look at the contributing factors that are driving it forward. As these continue to rise in urgency, power and importance, we should expect to see a rise in divisive opinions about globalisation — and global brands.

Rising nationalism and populism

Globalisation’s winners and losers, tech-fuelled disinformation and the pandemic led to tensions among economic superpowers that could slow or reverse the move to a global economy. Populism has been rising in many countries for a number of years, and was especially evident in last year’s elections around the world.

Immigration, migration and displacement

People are migrating within and between countries due to economic opportunity, political circumstances and climate change. Immigration and its reactions — both positive and negative — affect the destination nation’s social fabric as well as the countries of origin and transit. When local jobs are pitted against immigration in political rhetoric, negative sentiment toward globalisation often ensues.

Rise and fall of middle classes

Middle class incomes are more stretched in advanced economies but growing in others, for example, the Asia-Pacific middle class will account for most global middle class spending. People often link these changes (positive and negative) to the effects of globalisation, and those sentiments are leading to shifts in behaviour.

Pervasive technology

Technology has transformed every facet of our modern lives, creating opportunities in every sector and market — as well as the opportunity to manipulate and create disinformation. The rebirth of industrial strategy and stimulus has led to a search for national champions in strategic sectors, such as microchip manufacturing and generative AI, which changes the power dynamics of global markets.

What’s next?

Each of the factors above are something that brands should continue to monitor, and to consider the implications carefully. Scenario planning is having a moment – though it’s always been in favour with those who understand the benefits of planning for the future and tracking short-term and long-term change. As with all topics where we see rapidly shifting sentiment, the biggest opportunity is to closely monitor how your target consumers feel about potential hot-button issues.

In fact, here in the US the type of polling that we’ve done for decades around political topics is now being used to test messaging territories for brands to help them avoid pitfalls and ensure resonance with consumers. We’re seeing a politicisation of more topics than ever before, particularly when tempers flare around trade policy and the viability of one’s personal and national economy.

The impact of fractured globalisation exceeds potential backlash to individual brands; the economic outlook and the impact of tariff uncertainty is one of the biggest economic concerns for Europe at the moment, and fears of a global recession still loom. In this environment it’s tempting to slash budgets and wait for the storm to pass, but the tactic of slashing costs often fails in isolation and hampers the ability to build long-term growth.

Rather than pulling back spending across the board, we encourage clients to continue investing in research, innovation and strategy that will impact how and where to compete now and in the longer term. When this kind of strategic guidance is combined with targeted pulse checks on consumer attitudes and tracking long-term macro forces, brands and businesses can chart a course toward growth despite the rough seas.

We may indeed see a further merging of political consultants and brand consultants to help brands navigate this changing landscape – and we should expect to see more caution, testing and validation in the future.

Jennifer Bender is an associate partner at Ipsos Strategy3. As the head of our global practice on trends and foresight, she drives the development of methodologies to help clients anticipate and grow from change, and co-authors the annual Ipsos Global Trends study.