Now that COVID seems to be fading into the background, marketers are assessing the economic landscape -- and most find it to be a tricky time.
The most salient threat is that a recession will hit. The Financial Times polled academic economists recently and found that about 70% predicted a recession next year.
Still, not everyone is convinced. Notably, U.S. Treasury Secretary Janet Yellen said last week she did not anticipate a recession. Of course, Yellen has been wrong about the economy before. Most recently, she misjudged the path that inflation took over the past year.
Logically, it’s defensible to predict a recession. “Since World War II, we've gone an average of 58.4 months between recessions, or nearly five years,” according to Kiplinger. So it seems we’re overdue for one.
Assuming that we’re on track for a recession, the news isn’t all bad for marketers. Here are some positive aspects of past recessions that marketers can use to get through one that may hit in 2023:
Recessions aren’t bad times for all brands. The history of business is packed with companies started during recessions. A few include Hewlett-Packard (started during the 1937-38 recession), Microsoft (hatched in 1975, during the 1973-75 recession) and Airbnb (started during the 2007-2009 recession.) Even for brands that had been around for a while, the 2008 recession was a time of growth for many. Netflix, for one, started streaming in 2008, a move the propelled it to greater heights. Warby Parker also thrived during the 2008 recession because, as money got tight for many, the idea of buying affordable glasses online became a winning proposition.
The Fed can engineer a soft landing. Though many associate recessions with long, drawn-out recoveries, that’s not always the case. Most notably, in 1994, the Fed under Alan Greenspan guided the economy through a soft landing. But, at the time, inflation wasn’t nearly the factor it is today. In 1994, the inflation rate was 2.46% per year. For the 12 months preceding May 2022, the rate was 8.6%,and it rose 7% in 2021. But if the Fed can’t pull off a soft landing then the U.S. risks stagflation, a situation with high inflation, but little economic growth. Still, some economists believe a soft landing is possible.