Dealing With a Recession

By Tom Gray, Chief Strategy Officer at Imagination

As we move into 2023, the uncertainty and speed of change for businesses that started in 2022 shows no sign of letting up – whether technological change, geo-political risk and the looming recession. As we move into 2023, our survey of 375 senior marketers across four main industries from around the world found that three quarters of businesses plan to refocus their brand in response to accelerating change and a looming recession this year.

Today, these shifts happen more quickly, rapidly opening up opportunities and challenges across every category.

We have seen such changes before, whether it’s the shift from the internal combustion engine to electric vehicles; the increasing sophistication of AI as a tool to better understand customers; or the ructions in retail as transactions shift online and the high street store finds opportunities in experiential retail, high-touch service and brand building.

At the same time, many people are shifting their attitudes and expectations of businesses. Social movements such as Black Lives Matter, Me Too, and Extinction Rebellion have increased demands on brands and businesses to have a vision and social purpose beyond shareholder returns.

Governments are already acting in tandem, increasing regulation across Environmental, Social and Governance (ESG) requirements. Some businesses have responded by creating ESG departments, often with a representative seat on company boards, to better manage new environmental and societal regulations alongside evolving consumer expectations.

These are strategic issues that should equally drive change at the core of the value proposition and business model. For brands, this represents both a challenge and an opportunity.

Businesses see a pressing need to make changes to their brands in order to seize these opportunities. Three quarters (74%) plan to reposition their brand in the next 12 months – up from 53% who did so last year.

This is ‘The Great Repositioning’.

Investing over a recession

A growing body of work shows the correlation between investment in brand building during a recession, and higher than normal returns.

The fact that three-quarters of businesses plan to ramp up their strategic initiatives in 2023 suggests a strong understanding of the opportunity amongst savvy brands and business leaders.

While marketing budgets are often one of the first to be cut in a recession, this leaves a gift for those who do the opposite and expand their reach and share of voice at a lower cost.

Marketing emerging over a recession

In 2022, just over half of respondents launched new products (54%) or services (54%), repositioned their brand or initiated a new strategic direction (51%) or expanded into new markets (49%). Our research shows that every one of these strategies will increase over the coming year

Plans which may have been deferred over the pandemic are now being pursued with vigour. But the conspicuous surge in brand repositioning suggests that businesses are not just tweaking, but overhauling their brand’s place in the marketplace, reflecting their customers’ reappraisal of their value and relevance to their lives.

This also applies to business-to-business (B2B) brands as senior marketers from enterprise technology companies are the most likely to be planning a brand repositioning in the coming year (78%), ahead of luxury, consumer technology and retail respondents.

The Great Repositioning has begun.

Businesses are looking to brands to deal with market changes, societal changes and a looming recession. To understand how to deal with all three, email marketing@imagination.com to sign up to receive a copy of our report – The Power of Experience, launching soon.