AI Technology: A Recession Buster for Tech Companies

Here is how tech companies are recession-proofing with data and AI

Google, Microsoft, and Facebook's parent company Meta just released their quarterly earnings. The worst appears behind them since they are all back in black. These firms' shares have also recovered. For many other technological businesses, it is the same. This earnings season, technology businesses in the US appear to be talking less about the recession, indicating that they are growing more confident about a soft economic landing.

Artificial intelligence talk has taken the place of economic talk. In calls with analysts and investors, CEOs are reportedly using phrases like headwinds, inflation, and recession less frequently now that about half of the Nasdaq 100 businesses have reported. This is a remarkable turnabout from the previous year when such worries led to substantial market drops.

It's normal for merchants to start thinking about cutting costs as soon as a recession hits. Retailers may improve marketing budgets to perform better instead of cutting them. When the market improves, impulsive, short-term cost-cutting may result in long-term losses and reduce brand recall. Instead, merchants should consider how to use data and AI best to enhance the consumer experience and protect their companies from economic downturns. The shopping experience must change to match the omnichannel reality of the customer journey, in which consumers fluidly switch between online and in-store for product research, consideration, and purchase. Customers are encouraged to make in-person and online purchases for particular reasons and at various stages of their journey. For the best possible total consumer experience, online and in-store shopping should complement one another.

The actual store's location is one of the most crucial aspects of the shopping experience. Strategic site selection requires merchants to build stores in locations representing their understanding of their consumers and objectives. This goes beyond picking prominent trade districts with significant foot traffic and enough parking. Here, data is essential since it allows merchants to comprehend a trade area's demographics, traffic patterns, closeness to other businesses that serve comparable clientele, rival locations, and more. Even shops may learn which areas of a trade area are most appealing to their clients using location data.

By using new technology, retailers stay up with consumer experience improvements. For instance, augmented reality (AR) allows shoppers to "try" products before purchasing. As more people opt to purchase online, having a creative app experience may attract more clients. IKEA is one example of a company that has developed inventive and unique methods to leverage technology and digital platforms to enhance the shopping experience while addressing frequent obstacles to in-store buying. Its businesses have long been renowned for their creatively designed showrooms and even its restaurant that serves meatballs.

Retailers should concentrate on serving their current clientele during a recession or just before one rather than aggressively pursuing new customers. Since consumers have more purchasing options than ever and are continuously inundated with commercials and incentives from rivals for a share of the wallet, building direct relationships with them has never been more crucial. For instance, the cosmetics retailer Sephora launched its loyalty program more than ten years ago and has since updated it to consider both the demands of its clientele and the potential of contemporary technology. Sephora's next move was to improve the online and in-store experiences with a smart app after seeing that 80% of their customers were using their phones to enhance their in-store purchasing experience.