Retailing During a Recession: 5 Ways to Recession-Proof Your Business

The talk of the town for the last few months has been of a recession. 

‍

Record-high inflation and rising interest rates are signaling an impending one, but the National Retail Federation announced that while the economy’s rate of growth is slowing, we won’t be entering a recession during the remainder of this year. 

‍

Still, brands and retailers are rethinking their strategy for the second half of the year, especially for tackling increased shipping and labor costs, prevailing supply chain issues, and price-conscious customers. 

‍

And it’s critical that they are. Even without current recession concerns, it’s clear from the last few years that brands need to be ready for any type of economic condition. 

‍

What does a recession mean for brands and retailers?

For retail, previous recessions have accelerated emerging trends and widened the performance gap between businesses. According to a Harvard Business Review article, the key difference was preparation.

‍

The aftermath of the Great Recession revealed a stark difference in how businesses performed depending on whether or not they had prepared. The most resilient businesses built their cash reserves, created room for margin hits, expanded into new markets, maintained great customer service, and communicated their value proposition. 

‍

This last point is especially pertinent during a recession because consumers will be reassessing which products they consider to be necessities. They will continue to spend on food, health, and essential clothing—and buy from brands they trust—which means that brands outside of these industries need to reshape their “why”.     

‍

With preparation and agility, brands can turn a recession into an opportunity for driving customer retention, strengthening market position and making the business more efficient. In this article, we’ll explore five innovative ways that brands can recession-proof their business.

‍