Economists, businesses and consumers alike are feeling the pinch of the cost of living crisis across the UK and beyond. “Usually recessions sneak up on us. CEOs never talk about recessions,” says economist Mark Zandi of Moody’s Analytics. “Now it seems CEOs are falling over themselves to say we’re falling into a recession. ... Every person on TV says recession. Every economist says recession. I’ve never seen anything like it.” (CNBC, 2022)
But what does this mean for brands? Surprisingly, research of three historic downturns found 9% of companies come out of a recession stronger than ever, meaning that despite fears of hardship, companies have the opportunity to not only survive but thrive in economic uncertainty.
As recession becomes increasingly likely, how can retailers and brands ensure their business continues to engage customers when purse strings are tightening? What technological investments should they be considering to facilitate this?
How have brands navigated turbulent times in the past?
During the past few years, brands have been faced with what feels like an endless number of threats, from the coronavirus pandemic to the war in Europe, and supply chain complications. Yet, with impressive resilience, numerous innovative ideas have grown out of these challenges in response to rapid changes.
With an unprecedented growth in online shopping, brands were forced to embrace a digital, hands off customer experience, implementing services like curb-side pickup and try before you buy. Retailers extended return periods, supply chains ramped up production, and customers demanded online experiences that imitated the in store environment. And whilst brands are seeing a slight return to more traditional shopping methods, these new behaviour changes have altered the way customers engage with brands.
Companies are now no stranger to change and are preparing themselves for another tumultuous period. Leaders are considering smart technological investments with capabilities that enable the business to do more with less.
Technology can make or break your business
In the wake of the Covid-19 pandemic, “Gartner analysts said that composable business means architecting for resilience and accepting that disruptive change is the norm.” (Gartner 2020) Why is this important? Because brands with more agile and flexible technology are able to navigate the challenges and uncertainties that come with disruptions, responding quickly to customer demands. Brands with modular architecture are more likely to flourish as we navigate economic downturn.
In a fluctuating market, digital teams with composable architecture can add and remove functionality to respond to trends and customer desires, ensuring customer satisfaction stays top of mind. Smarter investments in capabilities that allow your business to do more with less reduces the total cost of ownership by eliminating anything you don’t need and pulling in new features as and when you need them.
Where opportunities open, brands can quickly adapt and open new revenue streams to be first to market in as little as weeks. Brands are in control of changes on a micro level, and can adapt to different markets, geo-locations and demographics depending on what they need.
Conversely, brands using heavy technology risk a bumpy few months as competitors speed ahead. Digital teams should be proactively planning their approach to composable, deciding now exactly which microservices they will need to help them keep up with the market.
(Fortunately, a move to composable doesn’t have to be done in a big-bang approach, and can be an ongoing process until you are completely free of your old monolithic technology. Read more about switching to composable here)
And how about internal operations?
Paired with economic downturn often comes staff redundancies. At the end of 2022, Meta cut 11,000 jobs in response to “macroeconomic downturn” amongst other issues, and businesses are looking to do more with less. Automations across teams including content processes, legal checks and operations can help brands become more recession resilient, particularly as teams shrink.
Brands are also looking for solutions to immense pressures on smaller sales teams. Automating the buying process and integrating an ecommerce function can mitigate this issue, giving reps the time to deal with bigger and more complex projects. This is particularly important in B2B commerce, where brands are migrating to self-serve options to enable smooth and efficient service without the need for human interaction. Automated workflows across channels can support a consistent and strong customer experience with fewer resources, helping brands refocus their staff on more long-term value projects and innovation.
So what’s next?
Composable DXP is a promising technology that can help businesses build and maintain digital experiences more efficiently and effectively. Its modular and flexible approach allows companies to be more agile and responsive to changing needs, and can provide an advantage during a recession by giving companies more control over their digital investments and reducing costs.
But technology alone isn’t the solution. Even with the best in class tech, brands need to take a holistic view of their business strategy and consider where technology is best fit to support this. This is where we come in!
Our global team of experts can look at your business strategy, the trends, and your budgets and design your tech stack in tandem. This approach enables you to select the best technology for YOU rather than trying to fit your unique business into a pre-made solution, which can end up working against you in a period where flexibility is absolutely paramount.
If you’d like to have a quick chat, we’d love to hear from you. You can either book a call online or schedule time to meet with our team in person. Book your slot here.