The last recession in Australia was in the early 1990s, and since then, many businesses have emerged and thrived. While it is not officially a 'recession' yet in Australia - all key signs are pointing to a softer retail market.
Here are the key things the Black Ops Team are working on with our businesses and advising our clients to focus on so they can weather the storm:
Innovation: Successful businesses are often those that are able to innovate and adapt to changing market conditions. This includes introducing new products or services, adopting new technologies, or implementing new business models. The key thing here is that innovation shouldn’t stop during a downturn, because if you decide to turn your creativity or product development pipeline back on post recession, you will be too slow and you will miss the opportunity. Our tip: always have enough innovation in your product pipeline to double your business.
Customer focus: Customer focus is not focus groups any more. It is chatting one on one with your customers. If you're not having regular dialog with someone who actually paid $7.50 at retail for your product then you're out of touch. If you are not reading your customer reviews, you are out of touch.
This is not the time to double down on assumptions about the product and how it meets the customer expectations. Focus on the store, the shelf and the customer who actually brought the product today. Find out their needs, gather insights and understand consistent feedback themes - this will drive what you should do next with iterations of your product offering. Make sure that your team are not wasting their time on new features and brand activity the customer doesn't care about.
Operational efficiency: Don't overspend on anything here. Get back to the fundamentals of spending less than your earn and re-evaluate your businesses “unit economics” (*more to come on this topic). What are the mechanics of the things that actually make you money and can you find efficiency gains?
Alternatively we find that businesses that review their business by deal, channel or country suddenly become aware that most of their transactions are unprofitable and are wasting resources in their sales mix. Better to find out sooner rather than later as the snowball effect of this can be fatal to a business.
Financial strength: Cut your forecast then cut it again then cut it again. All financial assumptions need to be re-investigated to ensure your financial modelling will mimic real life. For example: cash flow modelling needs to push creditors out to 45 days. On the purchasing side vendors are tightening terms so modelling on new purchases needs to reflect larger deposits and not include credit terms of 30 days payable. Make sure you modelling reflects the tighter economic climate.
Strong leadership: Successful businesses often have strong leaders who can make tough decisions, adapt to changing circumstances, and inspire their employees to work towards a common goal. Survival on shelf or online will come down to having specific common goals across the team. Cutting back and focusing the project scope of each and every team member will not be easy, but necessary during this time.
Overall, this is a time for the brave to pursue big opportunities.
Regenerative AI - this is massive!
How are we using AI in our business so far?
Well apart from asking Chat GPT to write a song for our new fragrance launch (which was amazing by the way), a poem for someones birthday and articulating policy documents - this week we thought we would see how long it would take to create a new logo for a brand using another AI tool - Brandmark.
We created a logo for a made up company called 'Blackberry Bros' - a family gardening business that specialises in the removal of the blackberry weed. Brandmark allowed us to select a colour tone and category for the font to get things started. It then generated a handful of options to choose from - so I picked my preferred font and style option. I then adjusted the green tone to one I preferred better, and played around with 4-5 different icons until I landed on this one - a pair of secateurs. In just under 5 minutes, here was the result.
I am not suggesting this will replace the thought and care of a logo designer, but it would definitely speed up the part of the logo development process where marketers would typically write a brief and try to explain what they want.
Just to add a bit more fun and bring it to life, I then loaded the new logo I had created into Vistaprint, selected the black hoodie in the promo merchandise section and a minute later had this below mock-up. Not bad.
This is just the tip of the iceberg for AI and how it will fundamentally change the way we do things from now on.
We'd love to know what you are using AI for? Email us!
Joel, Jarryd & Nicole - Black Ops