The year 2022 has so far unfolded in three stages. It started with a sense of déjà vu, with a major wave of Covid, strict sanitary measures, and the beginning of the Russian invasion in Ukraine. Slowly, the measures faded away to give way to a full recovery of activities. Combined with various factors (war in Ukraine, containment in China, etc.), this recovery unfortunately contributed to a pronounced increase in inflation.
Business recovery: winners and losers
Gradually over the course of the spring, sanitary measures were relaxed, allowing a certain return to normalcy in several areas. This resumption of activity has produced both winners and losers. There was a return of large-scale shows and festivals, a resumption of tourism and a return of many employees to office towers. All of this has had a positive effect on the traffic in downtown areas, which had been neglected for two years.
On the other hand, some organizations that saw their activities flourish during the pandemic have been affected by the recovery. This is the case for Goodfood and Netflix, both of which have lost subscribers, a reality they were not used to.
A few months earlier, it was Facebook that announced a loss of subscribers for the first time in its history. Like every year, Facebook was in the news, among other things because of a dizzying fall in its share price and its development projects related to the metaverse.
A pandemic that has changed habits
In the coming months, it will be interesting to see what will remain of the habits developed during the confinements of the last two years.
In the online grocery business, for example, the pandemic has had the effect of accelerating demand. This led Metro to open its first online fulfillment center and to offer annual delivery subscriptions. Other players have also invested in their grocery delivery service.
In terms of work habits, forced telecommuting is slowly becoming voluntary telecommuting. Like many other topics over the past two years, telecommuting could create divisions between a portion of the population (40%) that can benefit from it, and the other portion that cannot.
Also on the subject of telecommuting, a survey of 29,000 respondents conducted by the BMO Chair in Diversity and Governance revealed that 84% of employees say they are more effective when telecommuting and 80% want to continue after the pandemic.
As the labour shortage intensifies, managers will need to ensure that they are listening to their employees’ needs in terms of work arrangements, as employees are often spoilt for choice in terms of jobs. The name of McDonald’s recent recruitment campaign, “Interview Us”, is very indicative of this new power relationship between employee and employer.
Shaken trust
For the remainder of the year, the topic of inflation is likely to remain in the news, while the topic of a possible future recession is likely to become more prominent. This will certainly not have a positive effect on consumer behaviour.
In the U.S., consumer confidence is already at an all-time low, while in Canada, consumers are already anticipating having to cut back on their savings and consumption levels by buying cheaper items at the grocery store or limiting their dining out.
While consumers seem rather pessimistic about the months ahead, this does not seem to be the case for North American marketing managers. According to a survey conducted in the spring by the agency dentsu among more than 500 marketers in Canada and the United States, 77% of respondents are optimistic about the future of the economy in the next 12 months. A large majority of them are also thinking of increasing their marketing budget. A good sign!
