How can brands survive in a recession?
Earlier on this year, Curated’s CSO David Angus sat down to discuss the changing economic climate and how a brand can navigate the challenges brought on by an economic recession. Seven months down the line, we look back at how some brands have followed these steps to not only survive but thrive…
Well, the worrying portents from government bodies and politicians from earlier on in 2022 have rung true. The UK’s disposable income is now being put aside to fund a warm home throughout the frosty winter months, rather than being spent on exciting new products and services. This should only be a genuine fear for those brands who fail to adapt, however. As discussed at the time the predictions were being made, the real issue is a brand sticking its’ head in the sand, ignoring the inevitable shift of purchasing patterns and economic context.
If a brand sits and watches the change happening around them, without reacting, is the cardinal sin, then what does a correct approach look like?
Here’s how one home maintenance store adapted its marketing, operations and sales activities in order to thrive in an economic recession.
DIY home maintenance store B&Q is thriving in today’s climate of economic recession and uncertainty. So how did they do it?
1. Use customer data to inform your brand stock buying
B&Q adapted their buying habits, investing more in the development of energy-saving products: rightly predicting an increase in demand as a result of the soaring cost of energy bills. And they were correct, thermostat demand grew 29% and loft insulation 108% over the course of 2022.
2. Develop a new brand service offering for recession customers
B&Q looked at their surroundings and adapted its offering to include energy-saving appointments as a service. This was based upon what their customers needed, as well as opening themselves up to a brand new consumer base. Whilst these appointments may not have directly provided cash flow, they certainly improved customer sentiment and brand awareness, a feat typically difficult to achieve in these socioeconomic circumstances.
3. Reconsider your outreach approach for new customers
The launch of a new style of home wear ‘ convenience store’ further responds to the changing consumer demands brought on by the recession and beyond. The larger, more costly purchases are reducing in frequency for most businesses. This means that brands like B&Q must adapt to this by providing accessible and affordable products in a convenient manner, through local, smaller stores. These stores are easier to travel to (saving consumer costs purely on travel) but also provide the more inexpensive home improvement (including energy-saving) products that many opt for in the current climate, as well as click-and-collect.
The intention of this case study and analysis is to highlight to the reader how effectively utilising an assurance and data reporting strategy can negate some of the major challenges for brands brought on by the recession.
How can I keep on top of changing customer habits?
The assurance methodology leveraged by brands such as B&Q can allow them to make well-informed, smart and quick decisions to thrive in such a challenging time.
Remember the OODA loop:
Observe — what is happening (economic recession)
Orient — ensure the business or brand stakeholders are aware (plan strategically)
Decide — collaboration to determine the best course of action (making more products from energy-saving product line available to consumers)
Act — deliver the response to the situation (sell these products, provide additional services, recession-proof your activities)
Don’t forget the ‘T’:
Thrive
The bottom line:
Try to avoid panicking, and make well-informed business decisions based on the data and insights you have available to you. Once again considering Maslow’s hierarchy, previous consumer behaviour theory has rung true in the current climate: people will still make purchases to fulfil their needs. Maybe the needs will change, that is where you come in. Times like these cement the cruciality of consumer insights – well-informed business decisions are valuable at the best of times. Still, this value increases tenfold in times of economic uncertainty.
