In a slowing economy, consumers are looking for more value per dollar spent over novelty. Though social media, especially platforms like TikTok remain powerful channels of mass marketing, brands must lay the groundwork to ensure their products have longevity in the current market.
Worldwide, customers are changing their spending habits in anticipation of a recession, but that doesn’t mean they’re not spending. Despite annual inflation reaching 5.8% globally, total retail sales is still expected to grow 6.4%. Euromonitor figures show customers are expecting to spend $54 trillion this year and have $64 trillion in disposable income.
How can brands better position themselves to win more consumer dollars under tougher conditions? Several considerations are key, and they’re all based around building a long-lasting brand.
First, businesses must have their omni-channel mix right. Brands may be tempted by TikTok and other social media’s inbuilt shopping platforms, but they shouldn’t put all their eggs in one basket.
The rise of TikTok as the world’s most downloaded app within a few short years may be impressive, but don’t be fooled. The very nature of technology means the MVP apps of today could just as easily be replaced by the star platform of tomorrow.
For instance, in 2023 it’s predicted that Instagram will make a comeback and Facebook live audio chat rooms will become the next big social media trend. Instead of letting the hottest social media app of the day dictate the direction of their e-commerce, businesses should nurture their own selling channels.
Next, brands must recession-proof their products. Now is not the time to experiment with new products and formulations. In a downturn, anxious consumers value familiarity and prefer to put their money into “safe haven” products. More than ever, businesses should stick with what works and create better value to ensure customer loyalty. Looking at each individual product, businesses need to holistically assess the purpose it serves and perform a risk assessment.
Which product sells the best and why? Which ones aren’t performing as well? From pricing to less obvious factors like product quantities, packaging and delivery options — a customer-centric analysis will reveal the chinks in the armour that need to be patched up.
On the business side, brands should rethink their business model. For instance, is trying to compete with incumbents a smart thing to do or is finding a niche and a manufacturer that supports this is a better thing to do? Other areas that bear consideration include taking a closer look at supply chain arrangements and manufacturing processes to better understand their cost. Businesses will often find at least one or two spots of inefficiency along the way. By working closely with suppliers, they can keep an eye on what future costs might be and plan accordingly.
Streamlining operations will also involve looking at how the business spends its money on acquiring new customers. Studies show that it costs five times more to attract a single new customer than to retain an existing one. Growing a generational brand means every aspect of a business needs closer scrutiny with a focus on the future instead of being mired in trends.
Tough times are ahead but the odds are not insurmountable — if brands stay on the ball with each new development. By playing the long game, businesses can create a real brand legacy and lessen the likelihood of failure.
