Amidst an Economic Downturn, Have Marketers Forgotten the Golden Rule?
It’s been over two years since a deadly virus disrupted the world, causing, for most, a sudden shift in their life trajectory. Some said goodbye to careers, family members or relationships — and said a cautious hello to an unprecedented new beginning. The pandemic not only launched a new way of living, but a new era of business practices, including working from home, honest marketing, and burnout awareness.
Now, we're nearing another drastic environmental shift: a recession. Will this change once again alter the relationship between consumers and businesses? Is it best to prepare ourselves for the possibility or adapt as necessary?
My gas tank bill is starting to look like a grocery bill,
my grocery bill is looking like a Costco bill
and I cannot afford
to even set foot into Costco.
How is everyone surviving this?
The consistent rise in manufacturing costs, gas prices, groceries, and rent have hinted at the possibility of a recession for the last couple of years. Businesses and consumers alike are struggling under the weight of increased costs and wages that can’t keep up. Consumers are more decisive than ever about where and with whom they spend their money.
2020: AKA the Year the World Stopped Turning
During the height of the coronavirus pandemic, SMBs created a demand for transparent marketing. While major enterprises struggled to decode the latest slang and learn TikTok dances, small businesses introduced consumers to a new level of marketing and brought them into the factory (or, in some cases, the living room), allowing them to observe cleaning processes, product creation, and even live packaging. While the rise of SMBs has simmered since lockdown, their marketing practices have left a lasting impression on the business world and its participants.
Allowing customers to engage in the everyday routine of a small business owner garnered an unforeseen demand and created a sense of solidarity between the business and consumer. When compared to the awkward advances larger competitors took in an attempt to connect with their audience, buyers eventually began to question their blind trust in corporations and realized the true value of their dollar.
After four consecutive monthly declines,
the leading economic indicators
signal that #recession is on the way.
You’ve been warned.
Consumer vs. Retailer: Who Has the Upper Hand?
This realization, combined with near-historic inflation rates, has left consumers feeling betrayed by corporations. Despite reporting a stable to high revenue, companies such as McDonald's and Amazon.com have raised prices, and other large corporations are, some argue, price gouging. In exchange for brand loyalty, consumers have received a lack of sympathy. While the recession may appear to change the business landscape as the pandemic did, the current actions of enterprise retailers are the true driving force behind the next shift in the marketing world.
Large retailers have upheld the defense that they, too, are suffering monetarily due to inflation and that they're raising prices involuntarily. However, according to The Guardian, “the analysis of Securities and Exchange Commission filings for 100 U.S. corporations found net profits up by a median of 49 percent, and in one case by as much as 111,000 percent.” The fabrication of these claims further damages brands' integrity, and if larger corporations continue to take advantage of the unstable state of our economy, they may forever sever consumer confidence in brands.
Hopefully, in the near future, we’ll see an end to astronomical prices. Yet the damage left behind by current company practices will present a new challenge to marketers. Once society is no longer distracted by an involuntary choice to live above its means, marketers will be faced with another impossible query: How to repair the trust between consumers and businesses?
Dynamic #US consumption is often cited
as reason for #recession fears
This is part of "the big confusion"
between nominal and real spending.
US #consumers only spend more on
roughly the same volume of goods.
How long they can sustain that?
Here We Go Again
When the pandemic first struck, we were not given the option to prepare. We were thrust into chaotic new surroundings and spent months scrambling to adjust. While some businesses thrived under the pressure and found a sense of purpose, others couldn’t withstand the sudden change and were forced to close their doors forever. With a recession on the horizon, we're given a choice that was stolen from us in 2020: Prepare or adapt?
There’s no simple solution. As marketers, we know each day is a coin toss. We're constantly navigating from a state of preparation to one of adaptation. Some days we see projects we’ve spent weeks planning, researching, and preparing for finally come to fruition. Other days we’re greeted with a major news event in place of our morning coffee and we’re forced to cram projects that should take us weeks into a few short hours.
Families already worried about the cost of Christmas
as inflation reaches 40-year high.
Mums told us repeatedly that rather than
looking forward to the festive season,
they are - in their words - “sick with worry.”
The pandemic was the first of many events thrust upon us. We must continue to hone and adapt the skills we developed during that first crisis. Among them, empathy and transparency should remain the most prominent. SMBs reminded us how effective and important these approaches are to the everyday consumer. If we're to survive this next period of uncertainty with our community support intact, we must lead with the goal of preserving their trust.
Yasmeen Johnson is executive media relations manager at SalientMG, a strategic B2B technology marketing agency.
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Yasmeen Johnson is the current Executive Media Relations Manager at SalientMG. Yasmeen has over a year of experience in the public relations industry, having interned at London Flair PR and worked at The Outcast Agency. At both companies, they were responsible for creating pitches, press releases, media alerts, and blog posts. Yasmeen also increased client social media engagement across several accounts by 5,000+. In their current role, they are responsible for conducting market research for a variety of clients, including Amazon Fire TV, Amazon Alexa, Amazon Echo, Amazon Auto, Lyft, One Medical, and Hairtelligence.
Yasmeen Johnson earned their Bachelor's degree in Media Communications from Arcadia University.