The volatility has resulted in significant demand and supply pressures, leading to substantial market dislocations.
Studies show consumer confidence had gone down sharply to levels last seen in March 2020, when the first lockdown was announced due to COVID-19. With inflation and media reminding customers that their household budgets are rising, consumer confidence is getting further eroded.
While unemployment is low by any historical measure, vacancies are at all-time highs. As a result, the unit cost of labour is rising, and companies must become more proactive in managing costs. Businesses without solid brand positioning will need to drive new and repeat customer acquisition even when the digital marketing costs are rapidly rising.
Though it may sound counterintuitive in an unpredictable trading environment, companies must invest and innovate now. With a long-term view in mind, innovating now will be rewarding for brands as markets adjust to newly apparent realities. The author contends, “not all emerging industries deliver profitable outcomes, but times of economic dislocation have always spawned disproportionate opportunities.”
[4 minute read]