The Current Outlook on Business: Dealing with Economic Uncertainty

Written by Kelsey

September 10, 2020

Throughout the past few months, many states across the US are forging a path forward to help businesses get back to normal. For businesses that had to close their doors or alter their operations, this allowed them to breathe a sigh of relief before facing the uncertain future.

On the surface, it’s back to “business as usual,” but brands and executives are still facing unprecedented and unknown challenges. According to a US Census Bureau survey taken in April, 31 percent of US small businesses expect that it will take up to 12 months before they can return to a normal level of operations.

Most of these challenges for business owners revolve around how the economy will behave moving forward. With a record-breaking number of workers filing for unemployment this year, it raises questions of the economic damage companies will face long-term. In April, a special report from the US Chamber of Commerce found 54 percent of small business owners would rate the health of the US economy as “poor.”

Although many businesses can now officially reopen their doors, there’s no guarantee the customers will return on their own. Here at Radius, we’ve learned firsthand how businesses in our community are addressing these challenges. “From our daily conversations with business owners, we’ve seen that those who were hit hardest by the pandemic are still struggling to find a clear path back to normal operations. On the other hand, businesses that only mildly felt the impact are just waiting for the other shoe of the economic slowdown to drop,” said Radius Founder Doug Winegardner.

With conversations swirling about the state of the economy and pandemic, some customers still feel unsafe leaving their house or overspending in an unstable job market. A recent Statista survey found about 30 percent of businesses have already seen a sales decrease due to the pandemic. Even companies that were able to take advantage of the Paycheck Protection Program loan are still feeling the strain. Rosen Hotels & Resorts, a Florida hotel brand, received a $6 million loan toward the start of the pandemic, but revenues continued to fall so much that they were forced to lay off nearly 2,000 employees in July.

In the midst of the adversity and chaos, business owners are understandably feeling overwhelmed. In addition to the obvious concerns around safety and sanitation, business owners are also preparing for a potential coronavirus resurgence, navigating supply shortages and repaying their PPP loan. They understand the challenges, but during such a turbulent time, many aren’t sure how to most effectively safeguard their business.

The companies that are performing best during the pandemic are the ones taking proactive and creative steps to address the economic concerns. Many restaurants have managed to stay in business (and even earn new customers) by promoting family meal packages and partnering with delivery services. Meanwhile, traditional brick-and-mortar stores have implemented online checkout and curbside pickup. In Connecticut, a toy store called Necker’s Toyland had the idea to offer Facetime browsing appointments and extend their delivery services. This strategy allowed the store to both protect their customers and successfully keep their company in business.

When facing this kind of uncertainty and adversity in the market, one of the best things a business can do for itself is make strategic marketing decisions. Over the years, companies have found that continuing to advertise during an economic downturn helps keep their sale numbers high and produces a higher net income than companies who slashed their marketing budget. Companies who maintained or increased ad spend during a 1985 recession experienced a 256 percent higher increase in sales than companies who paused their advertising, according to McGraw-Hill.

“As a marketing agency, our biggest challenge is to keep businesses from letting uncertainty paralyze them from taking action today. With an aggressive, ready-to-adapt approach, we believe businesses can find pockets of growth and quickly change course as the unexpected arises. This strategy could be the difference between surviving this moment and having to close down your business altogether,” said Winegardner. For a deeper dive into how marketing can support businesses facing adversity, check out this article.

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