By Jonathan Henshaw, Head of Product & Innovation, Ryvalmedia
The world has recently witnessed a profound transformation in the economic landscape. This shift has given rise to what we now refer to as the ‘new economy.’
The new economy is the economic system that has emerged from the rapid rise of technology, digitisation, and innovation to drive economic growth. It is primarily centred around the disruption created by the knowledge economy, information technology, and the internet. In this “new economy” we’ve seen brands rapidly transform to fend off the competition from new entrants who have changed how we work, shop and live. The pace of change is fast, customer needs are constantly evolving, and organisations need to disrupt or be disrupted.
So how has this come about, and why is the new economy accelerating? Well, we should all know the context. The COVID-19 pandemic created the perfect environment for digital-first businesses to thrive, causing an increased focus on digital acceleration and transformation from more traditional-based businesses. Post-pandemic, we are now operating in a strained economic environment where we are seeing low levels of growth, leading to an increased focus on business results, media effectiveness, and measurability.
To grow in this climate, brands must rely on something other than what has worked in the past and must lean into the new economy to stay competitive in the marketplace. Technology is essential to growth in the new economy, but it’s more than just about onboarding technology; it’s about having the culture, skills & processes internally to harness and maximise the implementation and onboarding of technology.
For brands to navigate the new economy, they must lean into its seven core principles which are:
- Embrace Digital Transformation
- Innovation & Flexibility are Rewarded
- Adopt Customer-Centric Approaches
- Increase Corporate Responsibility
- Collaboration is a Must
- Skills & Training are Key
- You Must Stay Ahead of the Trends
These principles are not ground-breaking; however, clearly identifying them and the work still to be done in each area will allow businesses to not only navigate the new economy but emerge from these challenging economic times as market leaders – not market causalities. As a starting point, the first three principles are critical.
Embracing Digital Transformation
It might appear straightforward, but it is surprising how many businesses need help to embrace this principle and integrate it seamlessly into their operations. It is essential to recognize that transformation goes beyond merely changing marketing practices; it necessitates fostering a transformative culture throughout the organisation. Too often, businesses see digital transformation as just a function of the marketing team and miss out on increased growth opportunities in the new economy.
By nurturing an internal culture that embraces digital transformation, businesses can equip themselves to thrive in an ever-evolving digital landscape. Embracing digital change as a core aspect of their operations will enable businesses to stay competitive, meet customer expectations, and seize new opportunities for growth and success.
Innovation & Flexibility Are Rewarded
It’s clear – the businesses that remain stagnant or do not move at speed will be left behind in the new economy. Their market share will fall, and the level of investment required to regain market share will be even more than the level of investment required to maintain their current market share.
If you asked any business in Australia, they would all tell you that they are currently on their transformative journey; however, by not being innovative or flexible, they simply aren’t moving fast enough. In the new economy, achieving growth goes beyond merely embarking on the transformation journey; it demands moving at speed. Moving at speed requires a focus on innovation and flexibility within the organisation.
Adopting Customer-Centric Approaches
Traditional marketing approaches that are channel focused are no longer sufficient. In the new economy, we know that audiences have become more fragmented than ever before. To thrive in this new landscape, marketing functions and agencies must be customer-obsessed rather than channel-obsessed.
Investing in privacy-compliant 1st party data is essential to this shift. A data-driven understanding of the customer is the foundation for building customer-centric approaches. But this principle is more than just knowing about the customer; it’s also crucial that businesses look to invest in technologies that can activate and harness this valuable resource in marketing efforts.
While these technologies may come at a fiscal cost to businesses, they represent crucial investment, especially with upcoming changes to our landscape, such as the removal of cookies and forthcoming changes to Australian privacy laws.
A ‘two-speed economy’ continues to emerge between businesses who are leaning into the current context of transformation & disruption and those who are remaining stagnant or not moving at speed. For brands that take the lead and lean into the seven principles of the new economy lies an excellent opportunity for new growth, while brands who remain stagnant or do not move at speed will be left behind. As a key starting point, businesses must embrace digital transformation, be innovative & flexible and adopt customer centric approaches.