How can digital brands navigate a recession? Like any survivalist, knowing what you’re up against is critical to getting out of hairy situations. And making sure you’re stocked well with the right tools and supplies as preparation is the key to maintaining vitality. Because in this climate, it’s cloudy with a chance of digital drizzle.
In this article:
Into the Woods
Running a digital brand is not unlike hiking into the wilderness of the great unknown. Sure, there are those who have come before and marked trails and folks who have set up camp. But when you’re in the territory of a new frontier, there are still dangers that lurk and situations that can catch you off guard and get you turned around. Before you head into the woods, doing what you can ahead of time to pick and pack the proper tools and gather what knowledge you can about what you might face out there can keep your company warm at night.
We’re getting ready. Are you?
Thinking Ahead – What to Expect
During a recession, the lay of the land is in a state of flux. Familiar roads no longer lead the direction you may want to go, and staying true to your old trajectory may have you ending up off the trail. That’s what makes it so essential to take a few notes from doomsday preppers who are prepared for any terrain or disaster.
Thinking ahead means that your digital brand may still experience challenges, yet it also means there are opportunities that you have a head start on. If knowing is half the battle, then shall we get started? Below are a few things any digital company can expect during a recession.
Wilderness, Wildlife & Weather – aka, the X Factors
Less access to resources – Decreased revenue
When the land is drying up, folks start to hold onto what they’ve got and hunker down. In times of economic uncertainty, customers tend to cut back on non-essentials. As digital brands tend to operate outside of the more basic human needs of food and shelter, a decline in sales is almost a guarantee.
Beware the wolves – Increased competition
When it comes to overhead like a brick and mortar location, some business owners may move online to cut those types of costs. If your brand is in a similar market and has already been established in those digital spaces, more traditional businesses tapping into virtual spaces means more hunters on the prowl for those dwindling buyers.
Keep an eye on the sky – Unpredictable consumer choices
Although you may think you know how your customer base behaves, the winds of change can blow in a new pattern. Purchasing lavish or discretionary products that may have been a subscribed staple is a sacrifice that people make as their funds shrink. If your digital brand is a luxury item or experience seller, a decline in sales is likely to start happening early on.
Resourcefulness is Essential – aka, the Ability to Pivot
Utilizing what you have in unusual ways – Opportunities for innovation
If you only have a lemon, don’t make lemonade. (More luxury! [Plus, are we all gunna ignore the fact that there’s no sugar in there?!]) Instead, use that lemon to disinfect your wounds and de-rust the tools you need to survive. Find ways to be more creative and efficient in order to survive. And the more creative you are, the more you will stand out from the competition.
Keeping a positive attitude – Increased emphasis on customer service
A genuine, thoughtful, and happy interaction goes a long way to build rapport and extend the longevity of your business’ life expectancy. It’s scientifically proven that a positive attitude generates more success, and that kind positivity is inspiring and contagious. Digital brands that prioritize customer service tend to see increased customer loyalty and repeat business.
Planning Ahead – Pack Your Essentials
The Bare Necessities
You gotta get your basics covered to ensure your company stays strong, and that means getting the food, water and shelter secured. (Or, the dough $ and processes you need to do so.)
Sustenance – Adapt marketing & pricing strategies
Although you may start with trail mix, in the long-haul, securing food in the wild when low on edibles is a skill that must be developed. Reassess marketing strategies and messaging to align with the evolving needs and financial constraints of your audience. Additionally, adjusting pricing strategies, such as offering discounts or value bundles, can help attract price-sensitive consumers.
Water filter system – Maintain financial discipline
This one may be obvious, but it’s compulsory to mention: strong financial management for any digital company is essential during a recession. Spend will need to happen, and it makes a great difference where through you filter your funds. Closely monitor cash flow, control expenses, and ensure access to sufficient capital or lines of credit to sustain operations. But whatever you do, don’t stop marketing. That would be equivalent to tossing your whole survival kit into a rushing river and watching it float away.
An adaptable shelter – Optimize operational efficiency
You may have needed to give up the comforts of home like you were used to, but that doesn’t mean you have to be at the mercy of the elements completely. Streamlining operations and reducing costs can help digital brands weather the storm of a recession. Explore where efficiency might be improved, such as supply chain management, logistics, or internal processes to keep your head and feet dry.
The Right Travel Companions
With consumers more conscious of their spending during a recession, providing exceptional service becomes more important than ever. And that doesn’t stop when shoppers click “Confirm & Pay;” building relationships with clients and other businesses can be the allyships you rely on as you go through it together.
Committed following – Focus on customer retention
During a recession, acquiring new customers can be more challenging, not to mention costly. Instead of continuing to chase leads down rabbit holes, brands need to invest in cultivating strong relationships with their existing customers. As prioritizing customer retention is crucial, implementing loyalty programs or exceeding customer service expectations encourage repeat purchases and foster loyalty.
Trustworthy trail mates – Build strong partnerships
You don’t have to go it alone. In fact, you shouldn’t. Collaborating with complementary businesses provides additional support when things are rocky. Partnerships can enable shared marketing efforts, access to new customer bases, and combined resources that benefit the whole caravan.
Navigation Tools
Any wise pioneer will tell you that failing to plan is planning to fail. You may be heading into unfamiliar places in the imminent future, so do your part to ensure that your footing will serve you.
Use a compass – Follow a strategy
When things get foggy and the future is unforeseeable, proactivity conserves energy that reactivity burns up quickly. Map a long-term vision with the steps that make sense to get it there. Use mini goals as a navigator to then determine at the succession of those goals what is the next logical step. Check your position and adjust accordingly if the trajectory needs tweaking along the way.
Look to the stars to guide you – Diversify revenue sources
In what ways can you expand your monetary yield? Brainstorming possibilities and having them as points on your map can direct your path. Relying on only a couple of products or services makes brands vulnerable, inclined to get left behind and lost. Laying out a plan to offer complementary products, explore new markets, or expand into related services reduces reliance on a specific segment and mitigates the impact of economic downturns.
Emergency Pack
No survival kit is complete without some thought put into recon–aka a contingency plan. Even if you don’t know what kind of hit you’ll take before it happens, a selection of gadgets and supplies in your pack only helps if you have it.
Utility knives & sewing kits – Embrace agility & metamorphosis
Adapting to changing circumstances and being open to innovation is pivotal during a recession. Never stop collecting tools and knowledge to make sure your first aid kit is up-to-date. Continually explore new tech, trends, and consumer preferences to keep a sharp eye for opportunities for innovation and brand-distinguishing possibilities… even if it looks different than what you expect. Being agile and responsive to market changes as they arise could be your lifeline.
First aid items & emergency rations – A contingency plan
What if the worst happens? Having a Plan E may seem extreme, and hopefully it never comes to it. But there’s not much worse than needing one and having nothing. Because we know, anything can happen when you’re in uncharted territory. Lean into your team to create an all-hell-breaks-loose situation response that covers as much as possible.
Emergence
See, you can come out the other side. Not unscathed, but certainly stronger or more resilient. Below are some digital survivalists who faced adversity during economic downturns as examples to help get your adventurer brain in gear.
Lessons from Those Who Made It Through
Airbnb
During the 2008 financial crisis, Airbnb was born in the fire. They built a business model that could offer affordable lodging options to the budget-conscious. Realizing that many people were looking for ways to travel while penny-pinching, they founded a platform where folks could book a place to lay their heads that didn’t charge hotel prices. This approach not only provided a more affordable option for travelers, but it also opened a new era of homeowner income by renting out spare rooms or properties. As a result, Airbnb grew rapidly during that recession and became one of the most successful digital brands of the past decade.
Uber
Previously disrupting the taxi industry and offering cost-effective, greener transportation options, when the 2020 pandemic-induced recession took hold Uber diversified. With people staying home and avoiding public transportation, demand for ride-sharing services declined sharply. To offset this decline, Uber snapped to action and pivoted its business model. They made connections and partnered with local restaurants and stores to offer on-demand delivery services for groceries, essentials, and other offerings. This pivot helped Uber continue to generate revenue and remain relevant during the recession by helping people get things without leaving their homes.
Shopify
Shopify survived both the 2008 and the 2020 recessions. Founded in 2006 as an e-commerce platform, in June 2009, they launched an application programming interface (API) platform and App Store that kept their heads above water. And when the pandemic led to a surge in e-commerce, Shopify was quick to develop and introduce new features that made it easier for companies that were uploading their business online. With the tools they provided to set up online stores, process payments, and manage operations, Shopify secured their livelihood and beyond as well as made it possible for many small businesses to survive and thrive in a challenging economic environment.
Easier with a Guide
Remember those right travel companions we talked about earlier? Someone who is experienced and has continued not only to scrape by, but to thrive and grow while crossing great expanses, mapping along the way makes a perfect traveling buddy. We like to think that we are one of those ‘someone’s. Actually, we kinda know we are. And here are 6 things we are doing to turn business survival into an art form.
Here at Fullmoon, we’re a tight-knit team. If you’re with us, we’ve got your back. We’re not selfish, though. We’re extending a hand to you now. It’s a jungle out there, so why not let us guide alongside you? There’s a spot in our pack we’re saving for you.
