It’s safe to say that, this time last year, we would not have predicted 2020 to unfold the way it did. This year, if anything, has taught us valuable lessons on resilience and adaptability. Looking forward to 2021, we are hopeful that it will be easier on us, but we never know for sure what the future holds. Being prepared helps; our predictions on what the new year has in store can help us all prepare for both the best and the worst.
“In our agency’s network, one clear trend emerged. Those who best survived 2020 didn’t do it by sitting back and playing it safe. They took chances, shook things up, made strategic pivots, and pushed increased transparency.”
This approach to economic downturns isn’t new. Franklin D. Roosevelt’s response to the Great Depression, known as the New Deal, was all about creating new programs to kickstart the economy.¹ Failure was to be expected, but when one program failed, a new one was pursued.
“Throw shit at the wall and see what sticks” is not something Frank ever said, but summarizes his approach well.
These are valuable lessons that we can apply moving into the new year as we continue to recover. Yes, there is a greater chance of new ideas failing during economic downturns, but those who do not dare to try anything new are bound to fail anyway. The way forward and the way to success is by being bold enough to give life to new ideas and by pivoting to meet the needs of consumers now.
Thinking back to our college days that our marketing prof laid out the four P’s for us, we’ve broken down one or more predictions for each; Product, Place, Price & Promotion.
Product Predictions
Prediction: Product portfolios will be streamlined.
Businesses will alter their internal processes to streamline product portfolios. The pandemic has highlighted the need to be agile and quick-acting in the business world. Those who couldn’t respond to changing customer demands in real time fell behind and couldn’t keep up with competitors. Increasing numbers of businesses will take note of this and work towards streamlining product portfolios.
This is more than just making hand sanitizer at your brewery. Customers are naturally going to be more cautious with their spend.
“Depressions, recessions and now pandemics cause a knee-jerk reaction to retract spending that lasts for years. We’re seeing our client base strip off services and offerings that don’t resonate, and are trying new things at the same time.”
For example, our client Goldbeck Recruiting is leaning in to their HR services add-on, driving additional value for their clients by structuring new hires better with a CPHR on hand.
Place Predictions
Prediction: Sales people will have to embrace new methods of relationship building, like content marketing.
When we think of salespeople, a social butterfly of sorts often comes to mind. Salespeople are known to thrive in social situations and have strong communication skills. However, the halt of social gatherings of all kinds has changed the game for salespeople. The show must go on, even if the stage has changed. Salespeople must adapt to the current circumstances, finding new ways to meet and build rapport with potential clients. We predict content marketing strategies will be on the rise. Content marketing offers a different way for salespeople to attract attention and initiate conversation with potential clients at the beginning of the sales funnel.
Research shows that diverse types of marketing gain popularity during economic downturns; for example, direct-mail marketing increases.² More businesses will seek ways to create unique and engaging content to draw customers in.
“Even as people start returning to work and sales people their rounds, many competitors will have built robust content marketing systems that are building awareness and trust to support their teams, and this will continue to offer an advantage.”
Price Predictions
Prediction: Retail will continue to discount heavily, but other businesses will not.
The sales are everywhere. It feels like Black Friday came early and never left. It is well known that retail stores, especially for clothing, suffered greatly during the first-wave of the pandemic when brick & mortar shops were shut down indefinitely. The factors that drove extreme discounting in retail don’t apply to the broader business environment. We believe businesses will continue to charge their regular rates, as they should. Economic recovery after the downfall due to the pandemic won’t be built by continued discounting of goods and services.
“Businesses know where they stand at this point. We’ve long past the uncertainty of remote work and new business supply. By late summer most businesses knew if they were going to be able to keep functioning and now in the winter we predict that the pent-up demand will start to be released. Both in our own workflows and by talking to our customers, we’re seeing unseasonably high demand as we go into the holidays.”
Promotion Predictions
Prediction: Consumers will make purchasing decisions based on trust.
We believe that consumers will increasingly buy from brands they feel they can trust. They want to have confidence that the item or service they’re choosing will be of quality and will not let them down. Gaining coveted consumer trust requires effort in many domains, but steady contact with them is a non-negotiable. Familiarity is a gateway to trust, meaning that increasing your ad spending is actually a sound move despite the common business practice of cutting marketing costs to save money in the short-term.³ By maintaining or even increasing ad spending during economic downturns, you set yourself apart from competitors and come out stronger.⁴ Building a strong brand that consumers recognize is “one of the best ways to reduce business risk”, according to the Harvard Business Review. ²
“You build trust through impressions and repetition. Being present in a pandemic shows strength and people are drawn to that.”
Prediction: Historical consumer categories will be less important.
Typically, consumers have been grouped based on factors like age, sex, nationality, and class, but we all know there’s nothing ‘typical’ about these times. Moving forward, it may be wiser to section consumers by how they feel about their economic standing rather than who they are. Yes, many are struggling, but there are also those who are thriving during this pandemic. Adjusting your target audience based on consumers' emotional response to the economic situation can be a more strategic way forward.
John Quelch and Katherine Jocz of the Harvard Business Review presented the following four consumer categories that exist during a recession:
1. The slam-on-the-brakes,
2. The pained-but-patient,
3. The comfortably well-off and
4. The live-for-today.²
Each group adapts (or doesn’t!) their spending habits in different ways. Knowing where your product or service stands on the totem pole for each group helps determine who should be targeted with marketing initiatives.
Distribution Predictions
Prediction: Buy local won't work. People will reach outside borders even more than usual.
In the thick of the holiday season, you’ve probably heard the term “buy local” more than once. This year, in particular, the movement has gained momentum as so many local businesses struggle to survive the pandemic. Business owners and community members alike are calling for the public to support their neighbours, but will this yield the results they desire? Although this movement is well-intentioned and seems like a plausible solution to support the local economy, we are not convinced it will work. Many support the idea of buying local...until they see the price tag. Since most local goods are not mass produced, they often cost more, despite travelling a much lesser distance.
Most consumers, facing financial struggles of their own, will be looking for deals and will consequently reach outside borders for a lower price. Additionally, absurdly high Canadian shipping rates can cause a consumer to pick an international option that doesn’t cost as much to ship.⁵
Cited Sources
1. Cohen, L. (2020, May 18). The Lessons of the Great Depression. Retrieved December 18, 2020, from https://www.theatlantic.com/ideas/archive/2020/05/how-rebuild-nation/611704/
2. Quelch, J., & Jocz, K. E. (2014, August 01). How to Market in a Downturn. Retrieved December 18, 2020, from https://hbr.org/2009/04/how-to-market-in-a-downturn-2
3. Studio 30, Ad Age. (2020, May 22). What marketers can learn from previous economic downturns. Retrieved December 18, 2020, from https://adage.com/article/cmo-strategy/what-marketers-can-learn-previous-economic-downturns/2258736
4. Carpenter, D. (2017, December 07). What the Great Depression Can Teach Us About Marketing. Retrieved December 18, 2020, from https://www.huffpost.com/entry/what-the-great-depression_1_b_8116472?guccounter=1&guce_referrer=aHR0cHM6Ly9hcHAuYXNhbmEuY29tLw&guce_referrer_sig=AQAAAD8RJqMLBnQ8p5yEJhGFXFO0E0Alwd7YwqxsYd5lEVf5aUvCLhbdK8lgTkIPs2nC493GOfgcEHVUv6CpY4uOC8EF9eEktYDQottAJ05TnosSxRVAzHJGG2cvtofkp6URU8x2l55yZmxGUIZoEZZyGgYcMOR0__xgGc_o9uYlne
5. Contributor, P. (2018, January 26). Why Online Shopping in Canada Is So Expensive - PlanetWeb.ca: Canada Startup & Tech News. Retrieved December 18, 2020, from https://planetweb.ca/news/online-shopping-canada-expensive-push-lower-costs/