Winners In A Crawl

salespodder -

Caught a decent piece on Newsnight the other day about who wins when economic times get tough.  There were some great hints at how you can nudge your products up a notch when all around are doom and gloom from adapting these:

Lipstick Theory

Attributed to Leonard Lauder, former top dog at Estee Lauder, whenever a recession strikes, lipstick sales rocket.  It seems that women like to have luxuries to make them feel better.  Retail giant John Lewis explained that as of June 08, their lipstick sales were actually up 9%, and make-up overall up 18%.  They also noted that their Homeware dept was booming, as people tended to also buy say, a new lamp or cushion to make them feel better.  People still need treats, even if they downgrade the type of treat they take, and the lowest price ‘treat’ can see sales soar.

The Contrarian

Recession?  What Recession?  The OECD reckon growth will continue, just at a lower rate, not fall into recession in the UK.  A recession by definition is where two successive Quarters fail to produce GDP growth.  They believe the UK will grow by 1.8% in 08, and 1.4% in 09.  In addition, there are apparently £400bn worth of hedge funds that all expect to make a killing by buying at the bottom and selling at the top.  Also, the last downturn, inspired by the dotcom ‘re-adjustment’, showed the value of continuing your investment and advertising.  The most famous example is Pizza Hut.  They still spent cash on upgrading stores and advertising and as a result their sales accelerated quicker than any other in their sector when the good times returned.

Trade Downers

There seems to be a knock-on, with people that always bought from one price bracket, slipping down to the next one, slightly lower down the ladder.  Classic UK examples are the current sales surges reported by Cost Leadership driven Asda and Matalan retailers, with perhaps the best ‘live’ example the 25% sales increase reported by discount fashion chain Primark.

So there you go, you can make your own conclusions, but it does seem that offering a small desirable luxury, finding people that value investment and tempting people to leave your more expensive competition are all winning strategies.