'Flexibility' May Already Be the Word of 2022: AMEX Has the Receipts

‘Flexibility’ May Already Be the Word of 2022: AMEX Has the Receipts

by , Staff Writer @popeyesm, February 4, 2022

 and #39;Flexibility and #39; May Already Be the Word of 2022: AMEX Has the Receipts

If you want to know how well a business is doing, just stand by the cash register. That is American Express’s unique perch amid the post-pandemic recovery. They literally get to see the receipts across major business segments globally. Its ongoing Global Business Spend Indicator meters B2B spending trends across major business categories in worldwide markets. The raw numbers show considerable growth trajectories, AMEX reports, but R.J. Ancona, VP/GM, B2B, Global Merchant & Network Services, talks to these businesses large and small every day and understands the attitudes and moods beneath the topline stats. He tells us this week that the recent COVID reprise has done little to dampen a general optimism among the business sector about 2022. Still, being better prepared for the unexpected has become engrained in everyone’s planning process. And so the business term of 2022 seems already to have been born. If “pivot” and “empathy” dominated marketing discourse in 2020/2021, then “flexibility” is the early favorite for characterizing 2022. Listen to the entire podcast at this link.

MediaPost: So let’s dig into some of this from a top level. What are some of the general business spending trends that you’ve seen in the last year?

R.J. Ancona: Not surprisingly, it’s gone up. I think, overall B2B spending has increased substantially as businesses have made both necessary investments, but also they’ve adapted to this changing environment. And we’re very pleased to see that small business, in particular, has rebounded I think much quicker than any of us expected. Overall, what we’re seeing is businesses are adapting, and their overall spending has gone up certainly since 2020. But now we’re even seeing trends above 2019. 

MP: Are there particular channels where you’re seeing more spending or particular business sectors that are really spending heavily and some less so?

Ancona: Yes. So advertising sales and marketing in particular rebounded in 2021. I think many companies started advertising and marketing efforts to reach new customers and to reach them in new spaces. And then construction and industrial, I would say, is another one that is really hot, [not] just from the price of all of the goods but, also, just given the demand.

MP: Can you give us a little insight about where you’re seeing the ad spend in terms of sectors?

Ancona: Many businesses were focused on digital growth. And, again, that’s SEO. Social has been a major focus for investment. Search and digital costs. I’ve also seen a pivot from traditional event in-person marketing efforts to things like billboards or things like TV and podcasts. The pandemic had such an impact on sort of how people consumed advertising messages and it’s been really impressive to see my customers pivot, particularly small business customers. 

MP: Is there going to be some drawback on the digital investment as people start looking for more out-of-home, more in-retail market spend?

Ancona: I haven’t seen anything that indicates that there’s going to be a lead up. In a post-COVID environment we’re seeing companies remain flexible, which means they can pivot their investment dollars accordingly, even from a quarter-to-quarter basis. I predict that in-person is going to be complementary to digital, versus, sort of, separate channels where they were historically focused.

MP: Are they using digital mainly to drive performance, or are they seeing that there’s an imperative to rebuild or think about branding in ways that maybe they hadn’t before?

Ancona: What I’m seeing consistently is companies that kept true to their brand and their customers, but were able to adapt, are the ones that are doing the best. And when I say adaptation, I mean meeting customers where they were during COVID, being there for them and making sure that they were sort of establishing and maintaining those relationships, even from a brand awareness perspective, so that in a post-COVID environment they don’t get lost. And I think that was particularly true for small businesses. Many brands leaned right in, including American Express, to say how can we support small businesses during this time. We can’t acquire a massive amount of new customers right now given some of the dynamics that are going on, but we know that small businesses need us to be there and need us to be ready to step in when they need us the most. We saw a ton of our partners and brands leaning in on that in a very authentic way, which, I have to say, gave me a good feeling about business just in general. Brands stayed true to their purpose and their relationships with those customers. When the time came to ramp up acquisition again they were ready, and that’s certainly what we’re seeing now.

MP: On the B2B side, are there key differences in the ways in which the pandemic impacted how businesses are marketing to each other and partnering with one another? 

Ancona: For sure. There are so many more partnerships and joint initiatives coming out of COVID in the B2B space. I think people certainly recognized that supply chain dynamics were changing so quickly, how do we meet customer demands in new ways? And sometimes that was, we need to partner with companies that either have an asset that we don’t have or, in some cases, acquire a company that we believe will be able to help us meet our customers’ demands in the future. And so, we’re just seeing that trend explode. I think things like driving efficiencies in the supply chain digitally, certainly digital payments, we just see the adoption going straight up. So you’re seeing a lot more digital marketplaces, you’re seeing a lot more app-based services, maybe the brick-and-mortars are relying even more now on their apps. You start to see this movement of omni-channel digital presence between buyers and suppliers. 

MP: You mentioned the importance of that consumer feedback loop. It seems that lockdowns drove all brands in closer contact with their consumers, talking with them more and in a more humane way than maybe they ever did before. A dynamic seemed to change.

Ancona: I think, at least for me, part of the pandemic was bringing back that sort of core empathy with your customer. And it took at least temporarily, the pressure away from just talking about business results. All of a sudden you had permission, and you’re actually required to talk to your customers about what do they need, how can we show up for you. And, wow, how refreshing, in terms of what we should all be doing all the time. But it’s forced that permission to say sort of let me talk to you in a very humane way, let me understand your needs on a deeper level. And the innovation and the pivoting that’s come out as a result of that will set business trends for the future now. And I think there’s a lesson to be learned for all of us, in that don’t wait for a crisis to talk to your customers, and really think about what is that real-time communication. Certainly, now we have incremental tools to be able to do it, you’ve got so many different omni-channel ways to get customer feedback and interact with customers, and certainly that’s something that we’re doing really regularly, particularly with small businesses and small merchants because they’re being loud and clear as to how we can best support them. And that also makes companies feel good about the business that they’re doing because they’re making a meaningful difference.

MP: What’s the trickle down effect of the changed workplace of more remote working, because there’s a lot of B2B that depended on serving workplaces.  

Ancona: I think there will be permanent changes. We’re already seeing it, but I see it slightly differently. I see it as opportunity for a lot of these companies. For a lot of these technology companies, it’s an opportunity to meet home demand and office demand. I see hybrid approaches being the thing of the future. And I say that because there will be a point where people want to meet with customers face-to-face, or they want to have a workshop. And they’re going to need all the tools and the B2B infrastructure to be able to do that. And so, I think, it’s going to be net positive for how companies reach their target audiences, and I think it’s going to be a mixture of complementing in-person and home, and so, I think, it’s going to be a nice opportunity for companies to continue to lean into that.

MP: Let’s look a little bit into 2022. After a booming end to 2021, we get hit in December, with a real curveball. Is the COVID surge sparking a pullback?

Ancona: It’s interesting, I haven’t heard about people pulling back as of yet. What I have heard is the word flexibility. People have the budgets;  they are prepared to spend and, in fact, we’re still seeing them spending. But the word flexibility has come up in so many of our kickoff meetings, our business reviews. Customers are realizing that it could go either way, anyway, and they have to remain flexible.

MP: So “pivot” was the word of 2021, “flexibility” the word of 2022.

Ancona: Exactly, that would be my summary.

 

If you want to know how well a business is doing, just stand by the cash register. That is American Express’s unique perch amid the post-pandemic recovery. Its ongoing Global Business Spend Indicator shows considerable growth trajectories. R.J. Ancona, VP/GM, B2B, Global Merchant & Network Services, tells us this week that the recent COVID reprise has done little to dampen a general optimism among the business sector about 2022. Still, being better prepared for the unexpected has become engrained in everyone’s planning process. And so the business term of 2022 seems already to have been born. If “pivot” and “empathy” dominated marketing discourse in 2020/2021, then “flexibility” is the early favorite for characterizing 2022
 

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