It’s no secret that we are living in challenging economic times.
Inflation is rampant, layoffs are increasing, and people are not spending what they normally do on goods and services. However, the good news is that if you own a luxury business, the trends still favor a strong (yet maybe tapered) demand for upscale offerings despite an overall economic downturn.
Across the board, though, it’s proven through real world examples that investing in your business in lean times can give you unprecedented advantages.
The proof, you might say, is in the cereal.
According to an interesting piece via Frontify, breakfast giant Kellogg took its main rival Post to task during the Great Depression, and came out on top.
In the 1920s, before soup kitchens and long unemployment lines, Post dominated the breakfast cereal market while Kellogg’s was a far second. After the horrendous stock market crash through the country into financial ruin overnight, Post decided to trim its advertising significantly, while Kellogg’s did the opposite. They actually doubled their ad spend, and “snap crackle and popped” their way to a 30% profit increase!
Now, Post is still around, and a successful family of brands. But Kellogg’s has dominated the breakfast cereal market for almost 100 years, due to a bold move made during one of the worst times in American history.
Getting back to talking about luxury buyers themselves, we should remember that leaner financial times do not always mean lower luxury spending among loyal consumers.
This is partly due to the need to connect with items that represent something special… that increase serotonin levels and bring happiness to the buyer in a way that substitutes never could.
This is well-stated in a LinkedIn article by author Abdulaziz M.:
“Finally, emotions play a big role in consumer behavior. Purchases made out of fear, hope, or excitement are particularly powerful during difficult times. People often turn to luxury goods as a way to escape their worries and find comfort; conversely, buying something luxurious can also be seen as a way of treating oneself or rewarding one’s own success.”
So where should you invest in your business in uncertain times like these?
Focus on your key areas such as employees, operations, and vendors.
In addition, you’ll want to remember Kellogg’s example and robustly invest in your marketing as well. Not by hiring more marketing people or by DIY-ing it (because who has time for that?).
Your best bet is to outsource your marketing to a company that understands branding, online campaigns, email marketing, social media and more. With a team who understands the artistic sensibilities you want, balanced with strategy for maximum engagement and ROI.
At Anvil, we get that the best place for our clients to be is at the helm of their business, not trying to write website copy or blogs, managing social media, or capturing drone video footage. That’s why we love to meet with, strategize, and ultimately own successful marketing campaigns that can move the needle like nothing else.
To see how this can work for you, schedule a call today.
