Survival of the Fittest

Probable recession looms on the US horizon.  Traditionally, luxury goods are unaffected by US recessions, in fact, consumer spending actually rose during the last two.  However, the luxury market is being affected in this current downturn and consumers are pulling back spending on fear of market instability.

During a market slowdown companies should focus their marketing strategies to ensure stability and enable sustainable growth for their companies. This can enable them to emerge in fighting form when the market revives. Here are four tips to help you jewellery brand make the most of any recession.

1.         A recession provides the perfect setting for a company to capture market share. During the last five years, the luxury market has boomed and countless companies diversified into the 'affordable luxury' market, broadening their target market and capturing the loyalty of new customers.  Many will now pull back somewhat and refocus on their elite clientele and more expensive products. This provides stronger companies an opportunity to elbow their way into undersupported markets. 

2.         It is vital to have a far reaching view and to be free of panic due to market downturn. When the US economy revives it will be important for companies to have maintained brand awareness.  Planning for the future by actively and aggressively engaging in advertising, public relations and brand awareness programs will ensure growth in the long term.  Many media and advertising houses will lower prices during recession, making it the ideal time to set up long-term, low-rate agreements.

3.         Economic downturn is also the perfect occasion to consider buying competitors.  Under-marketed brands and companies that are in a bankruptcy position can be very good investments as we are seeing currently with Fortunoff.  Buying distressed companies can be instrumental in building customer base and market share.  Buying up failing brands can be lucrative investments and produce consumer awareness within different markets.  Whether taking advantage of the opportunity to buy weak companies or expanding into the voids created by failing brands, diversifying is a good way to maintain and grow your company in a recession.

4.         Online promotion is also a way to impact your market and cut costs of advertising.  As the internet grows as an outlet for luxury goods, it is important to stay abreast of the technological innovations that can aide your marketing strategy. 

Menachem Senderowicz is the founder of Sender + Partners LLC (www.senderpartners.com)

Elizabeth Ashley Baker is a part-time writer for Sender + Partners. 

menachem@senderpartners.com