Opportunities For Your Business During Uncertain Times
It goes without saying that the last 2 to 3 years have been unusual. Almost all businesses across the entire spectrum of sectors and markets will have been impacted in one way or another. The dreaded Covid-19 pandemic bought with it its own unique set of challenges and hurdles, but fortunately, those troubles seem to have subsided. However, the economy and many markets are still feeling the aftershocks of the disruption, and will likely be feeling them for many months and years to come.
Whilst the UK is unlikely to be faced with more turmoil caused by lockdowns and various other social restrictions, as we moved into 2022 a plethora of other unique economic challenges were introduced. With the energy crisis, troubles in Ukraine and the looming recession the business world is far from what it used to be.
Businesses had to respond quickly to the trials that crept in two years ago. Working from home and the big switch to online commerce are two great examples of how many businesses adapted their approach to the market in order to continue trading. Although these actions were taken in response to a devastating crisis, some businesses were able to find great successes in the adaptations they made.
Now that we’re all facing a variety of new challenges, you might be wondering how your business can thrive during financially rough times? In this guide, we’re going to explore some of the biggest influences impacting the business world right now, and how brands are evolving their approaches. In addition to this, we’ve included a handful of easy-to-implement, marketing quick wins that can help your business succeed in economic uncertainty.
Business Challenges & Uncertainties in 2022
Before we take a dive into our current adversities, it’s important to acknowledge that similar instances have occurred throughout our history. The 2008 Great Recession and Brexit are two historic periods that shook the UK economy, causing hundreds of thousands of businesses, mostly SMEs, to close up shop with millions losing their jobs.
In recent days, the biggest negative influences on world trade relate directly to the long-term repercussions of the pandemic and the consequences of war.
The Long-Covid Market
Every single person across the globe has been impacted by the Covid-19 pandemic, both in their personal and professional lives. Each of us has faced a myriad of disruptions to our daily lives. Looking exclusively at the business side, the global pandemic initially hit businesses hard, the blow softened by various handouts by the chancellor.
The spread of Covid-19 and the measures to contain it led to a significant drop in sales, particularly on the high street. Businesses reported that sales were around 30% lower than their initial sales forecasts. The pandemic didn’t affect all sectors equally either, hospitality and entertainment businesses were arguably hit the hardest as these industries require human interaction to conduct trade.
The emergency furlough scheme meant that job retention was higher than expected but around 10% of the UK workforce had their employment terminated. This, tied with a drop in investments across the board contributed to the spikes in economic uncertainty that rippled through the business world.
Six months down the line and it largely seemed as though most businesses were embracing the adaptations of the new normal. During this period there was a huge digital transformation, businesses that were able to offer a superior digital experience for their customers were conquering the market. There’s more on this further down the blog.
Throughout 2021 and going into this year, inflation picked up sharply, largely due to the fact that demand was returning as well as a variety of supply and labour shortages. The emergence of these challenges is a knock-on effect of the post-pandemic recovery we find ourselves in.
The Cost of Living Crisis
Increases in the costs of consumer goods, underpinned by strong demand from consumers and supply chain breakdowns have created the perfect storm for the cost of living crisis. Rising inflation and increases in taxes have left millions worse off going into 2022, people all across the UK are feeling the pinch.
With the majority of consumers tightening their purse strings, what does this mean for the economy and British businesses? Well, first of all, consumers have already recognised that they will be financially worse off this year and as a result, shoppers are holding back their spending. It’s forecasted that retail sales will plummet this year as people are prioritising their energy bills and other essential spending.
In addition to this, businesses across all industries are having to reassess their pricing just to maintain their resources. To make things go from bad to worse, consumer confidence has fallen lower than levels seen throughout the 2008 financial crisis. It’s reported that 1 in 3 families will reduce their household spending this year.
There is no doubt that we should all be expecting a marked slowdown in consumer spending, and what will be a gloomier economy. However, with that said, we must remember that despite an economic pinch, consumers will continue to consume and businesses will continue to operate. Brands, including your competitors, will pursue their goals for growth, consistently evaluating where further opportunities for their business to thrive, despite the economic downtime.
Whilst, 2022 is likely to continue presenting challenges for businesses (and let’s be honest, what year doesn’t present certain challenges for companies?!), there are opportunities your business can seize during this.
For starters, the UK has numerous economic links to Russia, however, trade between the two parties remains limited due to Russia not being closely integrated into the global financial system. Following Russia’s invasion of Ukraine, the UK introduced a number of sanctions on the nation, most of which will have a knock-on effect on other trade links.
Notably, Russia is a prominent exporter of energy, generating around 17% of the world’s natural gas supply and 12% oil, making it the largest supplier of gas to Europe. The disruption caused to the global supply of energy has sent wholesale prices through the roof for the people of the UK. These price-hikes have only exacerbated the cost-of-living crisis.
Higher oil prices directly inflate the domestic ‘pump’ price of both diesel and petrol, in addition to this, higher gas prices have resulted in a hike in domestic retail energy prices. Thirdly, high fuel and energy prices have raised the cost of producing goods and services across the board, affecting other macroeconomic variables. All of which contribute to deepening the grim economic picture we’re all looking at.
The continued economic impact of the war will depend on the extent of the conflict, the severity of global sanctions and how long it lasts.
How Businesses Have Evolved During Crises
Looking predominantly at the pandemic, this period forced a number of businesses to shift their operations online, even if they weren’t already doing so. As expected, there was a significant spike in online transactions and buyer interest.
In the marketing sector, initially, ad spend dropped to unexpected levels, and many businesses were quick to cut expenditure in order to stabilise their cash flow. However, with time and after the dust had settled, marketers adapted their approach to mitigate the ongoing challenges of lockdown. Out of home advertising, for example, saw a huge decline across all environments in April 2020. Rail and underground stations reported a 93% drop-off in outdoor advertising.
Online advertising, however, whilst understandably taking some hit, performed much stronger during 2020. Receiving just a 7.2% drop compared to the previous year, businesses were quick to see the value in promoting their brands online. The UK, which has the most advanced eCommerce market in Europe, generated £693 billion in eCommerce sales in 2020.
The pandemic demonstrated to a vast number of businesses the importance of marketing and their channel prioritisation also reflected this. In June 2020, the CMO survey found that 62.3% of companies saw the role of marketing increase in importance. In addition to this, a number of businesses doubled down on their retention strategies, focusing primarily on building brand value.
The pandemic necessitated a quick transformation for thousands of brands, and this meant going digital. Also demonstrated within the CMO survey, marketing objectives shifted towards providing stronger digital experiences for their users, from improving interfaces to investing in automation technologies.
Fast forward to today, and many businesses are using the pandemic recovery as a new opportunity to accelerate prosperity. The majority of UK based businesses have maintained their adaptations and will continue to do so for the foreseeable. Whether it be supermarket delivery or e-consultations, these transformations are here to stay.
The last 24-months changed everything, from the way consumers seek information to the way that they conduct purchasing decisions. This means, that brands like yours, need to evaluate the way that they market to customers and incentivise loyalty and retention.
With consumers spending more and more time online, and with employees of companies working from home or continuing the hybrid model, it is crucial to ensure that your company has an evolved digital presence designed to capture your target audience based on their buying habits today, not 2 or 3 years ago. The digital landscape has evolved, and we must evolve with it or risk falling behind.
How-to Market During a Crisis
One thing every marketer has learned over the past 2 years is that to succeed, we must remain agile. This agility has enabled businesses to keep their heads above the water, and for some, capitalise on even greater opportunities.
This pace of change has been triggered by the buying habits of users and the rush to keep up and stay ahead in increasingly competitive landscapes. User expectations have changed dramatically during the pandemic with online shopping increasing rapidly. The UK’s top 100 retailers said, on average, their online traffic increased by 52% during the pandemic.
The pandemic influenced tendencies towards ‘nesting’; within which consumers choose to spend more money and time at home. This behaviour trend meant that digital entertainment, food delivery and home fitness sectors boomed. Throughout this period, Netflix and other major streaming platforms saw an influx in subscribers. It also resulted in a huge success for Disney+ which launched in the UK in March 2020, welcoming over 86 million subscribers by the end of the year.
In 2022, with the economic disparity expected to widen throughout the year, consumers will be seeking value. During a time when many families will be feeling the economic pressures, getting your messaging right is absolutely key to securing buy-in from your customers.
Let’s take a look at one of the ‘Big Four’ supermarkets; Tesco. Tesco’s mobile brand seemed to have nailed its messaging with its recent campaign. I’m not sure whether I’m a prime target for Tesco Mobile but I definitely see their ads everywhere, particularly on social.
Leveraging a number of different food puns, Tesco Mobile’s recent campaign aims to essentially ‘call out’ their competitors for hiking up their prices. The new ‘Supermarket Mobile’ promotion ran across social, digital, press, radio as well as out-of-home. The CMO for Tesco Mobile said, “This year, mid-contract price increases are at their highest ever and, when customers are facing a cost of living crisis, they couldn’t have come at a more challenging time”.
As a part of Tesco Mobile’s campaign, it also included an apology letter on behalf of the rival networks which highlighted to consumers that they could see their contracts increasing by £107. The campaign was a fantastic example of how brands can one-up their competitors, particularly when in a crisis, by sharing messages that resonate with their consumers, with a little humour sprinkled in there too.
Let’s take a look at some ways your business could adapt your marketing approach to navigate the current economic climate.
Investing in eCommerce (If you haven’t already!)
Localise Your Marketing
Getting Your Messaging Right
Investing in Impact
Decarbonise Your Marketing
Investing in eCommerce
The pandemic triggered a huge turning point for digital and eCommerce. During a time when most economic activities ground to a halt, there was a huge surge in eCommerce and accelerated digital transformation. The upwards trends in digital sales since the start of the pandemic have shown no sign of slowing down.
If your business doesn’t currently operate online, it’s time you evaluate why. The last 2 years have proven that businesses that can harness the power of eCommerce have the potential to benefit from both local and global markets where the economy is rapidly digitising.
As mentioned previously in this blog, the UK has the strongest eCommerce market in Europe, so you should also expect the competition. Startups, small businesses and well-established brands can all benefit from eCommerce where you can provide a digital shop front for customers to buy your products and services.
Why now? Because consumers have changed. Today, markets are competitive and our buyers have come to expect convenience. Whilst the high street still serves as a valuable asset for many businesses, consumers want the option to purchase from the comfort of their own homes.
Localise Your Marketing
This is one for our international brands. Consumers from all over the globe expect to be marketed to in a personal way. Businesses need to be considering how their marketing material is addressing consumers outside of their vicinity. We’re not just talking about mass translations for each campaign either, it goes much deeper than that.
Localisation is defined as the adaptation of content to suit a specific market. Even in 2022, many brands are still to get this right and it is often overlooked. By localising your marketing, your business can expand your reach and awareness to offer a boost to your SEO. In addition to this, localisation enables your brand to foster more personal connections with your customers as it helps to humanise your brand. Something that could go a long way in a shaky economic climate.
Carrying out the additional work of market-specific copywriting will ensure your brand coveys messages that are both culturally and contextually appropriate.
Getting Your Messaging Right
Linking to our previous points. Our Tesco Mobile campaign exploration is a great example of how brands can accelerate their campaigns by getting their messaging right. Modern consumers are inundated by ads across every medium, so what can your business do to break through the noise. Well, aside from getting your targeting right, you should evaluate how your campaigns could be perceived by your prospects.
In a financial crisis where most UK households will have less expendable income, you need to be able to successfully portray value. This goes for B2B businesses too, the cost of living, manufacturing, utilities and delivery have all increased so it’s likely many businesses will be looking to offset their costs too.
By listening and understanding your potential customers you’ll begin to reveal their priorities during challenging times. This can be done by social listening, focus groups or other forms of persona development. These insights will help your business identify what really matters to your customers and empower you to create messaging around that.
Investing in Impact
In marketing, we often see our budgets fluctuate in line with how much revenue the business generates. So, when the economy is slow, it’s likely businesses will be bringing in less and your marketing budget will shrink in line with this. Making it more critical for your spend to stretch as far as it possibly can.
Focus on the channels you know brings the strongest ROI for your business. Whilst we always encourage testing out other avenues of marketing, during times of uncertainty, you may be better off holding back on high-cost, high-risk investments or gambles.
Where should you invest? Well, this comes down to your business and your customers. Learning where your consumers spend their time, is it online or out and about. What are their needs, wants and challenges? Again, this can all be revealed by utilising persona development.
Decarbonise Your Marketing
Perhaps something that was low on your prioritise list as a marketer. Whilst global carbon emissions fell by around 7% in 2020, we must remember that this was a result of restrictions. In 2022, our global emissions have returned to their upward trend.
You might be wondering how this pays relevance to marketing during a crisis but decarbonisation is about elevating your business’s position in your industry. Decarbonisation can help drive value for your brand, and it can be done at a low cost. Increasingly, customers want to know that the service or product they are purchasing has been sourced ethically and sustainably.
By 2030, it’s looking as though many UK firms will be required by law to publish and follow a plan to reach net zero, so let’s not delay the inevitable. Media planning and marketing are about finding and facilitating the right balance between cost and quality, but it’s likely minimising our emissions will become another factor.
We’re not suggesting that you invest hundreds of thousands of pounds into offsetting your emissions. A simple trick you can immediately implement is refining your ad targeting. At scale, more targeted advertising can reduce the frequency of delivering your ads to users outside of your target market. Reducing the CO2 from your ads, and enabling your business to reinvest your savings back into reaching your target market.
It’s likely the delivery mechanics of marketing will evolve over the next decade but being net-zero now is something that can add to your unique value proposition.
Digital Marketing at Loop Digital
The business world has changed vastly over the last 2-years. Marketing has supported and changed the way businesses promote their brands during crises. Our team has years of experience developing agile marketing strategies for startups, SMEs, and large corporations. Unlock your company’s potential digital marketing. Call us on 01604 806020 or speak to one of our experts today.
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