With COVID-19 throwing businesses into a tailspin, many small business owners are struggling to figure out how to bring their businesses back to what they once were. Even the most experienced and veteran business owners are facing issues they have not tackled before and recovery has become a daunting task. This is where the K-shaped recovery comes in.

One of the keys to recovery is going to be marketing, but finding the correct marketing plan is going to be difficult. A pandemic is something most small businesses have not dealt with in their lifetime and so there is no playbook on where to start your marketing plan. 

There are, however, some key market indicators to look at as you being the path to recovery.


The K-shaped recovery

You may have heard pundits on CNBC or Fox Business talking about the K-shaped recovery. Don’t be embarrassed if you don’t know what it is. It’s not something America has experienced in the past.


What is a K-shaped recovery?

The reason it’s called a K-shaped recovery is that the economy recovers in the shape of a K. Yes, that sounds obvious, but it’s the best way to visualize what’s happening. 

According to the U.S. Chamber of Commerce, the idea is that some industries thrived even during the pandemic. Industries like healthcare, retail, and technology all did very well. In some cases, the pandemic helped these businesses and boosted their bottom line.

On the other side, some businesses were pushed to the brink of closure. Industries like entertainment, travel, and food services all saw massive declines in business. 

What resulted was a K-shaped recovery, with some businesses on a steep upward trend and other businesses on a steep downward trend. 


Why haven’t we seen a K-shaped recovery before?

This K-shaped recovery is something that most Americans have not experienced in their lifetimes because most Americans have never confronted a pandemic. 

As CNet explains, “The current situation is unique in how uneven economic fortunes have been across sectors…Most workers in the retail and hospitality sectors are hurting; the delivery and cleaning industries are busier than ever. Bars are closed, but liquor store sales are booming. That’s a distinct change from the past when recoveries relied on broad economic factors like the unemployment rate and gross domestic product, and different sectors moved up or down, more or less in lockstep.”

What makes this situation unique is that you cannot uniformly say that the hospitality or liquor industries are hurting. Subsets of each group are thriving, while other subsets are hurting. 

For instance, movie theaters saw steep declines in attendance in 2020, while streaming platforms like Netflix and Disney+ saw massive increases. While they both exist in the entertainment industry, one is hurting while the other is thriving.


What does a K-Shaped Recovery mean for my marketing efforts?

If you are marketing for your business, you cannot ignore the K-shaped economic recovery. You have to pay attention to it so that you can form a strong marketing plan that is going to help your business pull through.

Chad S. White, the Head of Research at Oracle CX Marketing Consulting, recently told Smart Insights, how businesses respond to the K-shaped recovery will depend on where they fall on the “K”.

“Grocers, e-tailers, digital entertainment providers, tech providers, and other companies that have done well will focus on better personalization, segmentation, and automation as they inch closer to achieving the 1-to-1 marketing paradigm [of email marketing],” said White. “Meanwhile, airlines, hotels, cruise lines, traditional retailers, and other companies that have been hurt by the pandemic will focus on improvements to efficiency, essential optimizations, and A/B testing and analytics to try to adapt to the changing customer behaviors.”

That means businesses that are thriving, can start focusing on their marketing and honing it to make each client feel special. Marketing personalization will be the next step for these businesses.

Conversely, businesses that are struggling will have to use this time to prepare. They need to work on optimizing their services, A/B testing their marketing, and preparing for the moment that their business starts to trend upward again.


What if my business is struggling?

Many businesses will likely be stuck with wait and prepare, but Michael Kalman, the CEO of digital advertising agency MediaCrossing, Inc. says that does not mean that your business is doomed. 

“Within a K-shaped recovery, some brands will naturally succeed while others inevitably falter. However, other brands — the majority, from what I’ve seen — won’t fall into clear-cut winner and loser buckets,” Kalman wrote in a recent post in Forbes. “For these companies, success or failure will likely be determined by their agility and innovation in the coming months.”

Kalman says the key for businesses in these categories is to innovate. Find where the customers are now and meet them there. 

Be agile by finding new markets for your business. Look for new sources of revenue.

By doing this, you can start working your way up toward the positive side of the K.



In these troubling economic times, it’s the smart and savvy business owner that’s going to survive. Pay attention to your customers and the current economic climate because that’s what’s going to help drive your marketing plan. 

If you ignore the K-shaped economic recovery when creating a marketing plan, you are doing your business a disservice. Creating a marketing plan without taking into account the economic environment we are currently in is just as good as throwing your money in the trash. 

For some great tips on how to handle Email Marketing in 2021, be sure to check out this previous post. 


Written by Erika Towne