Every recession is different than the other; the causes are varied and but the effect on consumers is the same. We find ourselves revaluating our financial situations as consumers, and for marketers, it becomes essential to align a brand’s strategies with the consumers.
The effect of a downturn is different for different businesses, while cheaper food options may thrive; many fine-dine restaurants are severely affected. A typical consumer stops buying vacation packages, luxury items like watches and bags, new appliances, new clothing, and anything that is expendable. So, when sales start declining, many businesses begin to cut costs, and marketing expenditure is scrutinized or even axed to a great deal. However, some companies see this as an opportunity to diversify and acquire underperforming brands. During the recession of 2008, The J. M. Smucker Co. acquired The Folgers Coffee Co. from Proctor and Gamble for $3billion and also absorbed $350 million of Folger’s debt. The top-selling coffee brand improved the brand equity of Smucker and also enhanced its stock-market reputation.
As we face the COVID-19 induced downturn now, we see a lot of businesses coming up with unique ideas to survive. Panera bread, which is appreciated for its organic and healthy food, is now selling groceries with curbside pickup options. They need to repurpose their raw materials, which is not getting used due to slow business. Also, grocery stores are thriving as people have started cooking at home, and schools and colleges focus on e-learning options. All the challenges that we face now and the brilliant ideas we are coming up with is because we are forced out of our comfort zone.
Companies should avoid straight-up cost-cutting or price wars with competitors. They should try to invest in re-education programs for unemployed to help them re-enter the job market or cross-function training programs for employees to make them have a sense of job security, this will create loyalty among consumers and employees. Increasing accessibility to the brand, e.g., taking an omnichannel approach, will also improve brand loyalty.
These days I am watching a series of cookie-cutter advertisements with empty roads, parks, and restaurants accompanied by somber music. Then with lively music, we see family meet-ups over zoom-sessions, dancing tik-to videos, happy faces, and lastly, the company’s logo saying that ‘we care and we are there for you.’ These are suitable ads for times like these, but a brand should also take string steps towards fulfilling those promises because consumers are watching our every move, and they are smart and informed more than ever.