There are some things we all know to be true.
Like, Daniel Craig never should have made that last Bond movie. (The story arc after “Spectre” was perfect and done.) The Cheesecake Factory is the best restaurant in the world. Beyoncé is overrated.
And perhaps the most obvious: We are in the midst of a recession.
Technically a recession is defined as two consecutive quarters of negative GDP growth, which has already occurred, but no matter how you interpret inflation, the trend line of the economy is clearly going south.
Plenty of profligate politicians will parse their language and avoid using the R-word until after the midterms, but anyone who’s filled up their tank, bought cereal or milk—or even considered going out to dinner—has felt their wallet get squeezed and their effective income slashed. This means consumers are able to buy less, forced to make tougher choices about what goes into their shopping carts.
So what does a recession mean for brands, and how should clients and agencies navigate the rocky road ahead?
The best way to prepare for the future is to study history, and there have been several economic downturns over the past few decades. Therefore, we know what successful brands have done—not only to stay afloat but to get ahead. To wit:
Companies that keep investing in their brands during a downturn bounce back faster
For everyday items, even “loyal” consumers switch their purchases when a competitive brand is on sale or their usual brand is out of stock, and these tradeoffs become common during a recession. Store brands or generics may replace premium brands. This might lead some marketers to think cutting back on the brand now is the right move, to save on media expenditures while demand is lower.
That miser’s logic only leads to misery. Brand awareness builds familiarity, which leads to trust, so if you lose top-of-mind awareness, that precious bond you had with your customers is broken. Once wallets open up again, you’ll be spending your way out of a trough while your competitors build on a base of loyalty they never lost.