Growing Business After an Economic Boom

The pandemic years were boom times for numerous sectors of the economy, including home and bedding, furniture, and home workout brands. In a short period of time, Americans spent $118 billion spiffing up their homes (some categories of home goods, such dishwashers, spiked 4000 percent). Home sales also spiked as people sought more space.

But the party couldn’t last forever. People don’t need to redecorate their living rooms or refurbish their patios all that often. Retailers that stocked up on inventory have had to resort to liquidation sales as people began socializing IRL again. The result is plummeting furniture sales and layoffs for brands that enjoyed incredible success during lockdowns.

If you’re a CMO or CEO of a brand in a sector that’s now contracting, you're seeking ways to grow your business after the nationwide spending spree. Below are some suggestions to gain incremental sales and keep your brand top-of-mind.

Expand Into Adjacent Product Lines or Sister Brands

Category expansion is a way to get customers to keep buying from your brand after they’ve exhausted your core products. Think about how your customers use your product, and what might be right next to that. For example, if your brand is known for its bespoke bedding products, consider expanding into bathrobes, slippers or towels. If you sell furniture, consider offering a line of items that give those items more purpose, such as cocktail sets, puzzles or board games.

Expansion into adjacent lines (i.e., offering the “complete set”) is a strategy many brands are deploying to great success. For instance, Ruggable, a well-known brand for washable rugs, has rolled out a sister brand, Levity, which sells dining room chairs.

You can even pair this strategy with innovative merchandising tactics such as “shop the room” to sell additional accessories.

Take the Risk Out of Bigger Purchases: Embrace Resellers

If you’re a premium brand, coaxing big-ticket purchases out of consumers can be particularly challenging during an economic downturn, but not impossible. Take a cue from Peak Design, a brand that makes and sells high-end totes and travel bags (an everyday backpack costs $279).

For consumers who love the brand but can’t afford it right now, Peak Design includes pre-owned options on its product detail page. This is brilliant for a few reasons. First, it creates brand fans among people who want to own products from a premium brand but can’t quite afford it right now (later they may be able to purchase new). Second, it tells would-be purchasers that Peak Design bags are investments that can be resold later. Spending a few hundred dollars for a backpack may seem like a high price to pay at first glance, but the resale value more than justifies the extra money. Finally, it taps into the upcycling trend favored by millennials and Zoomers who are sustainability conscious and want to shop their values. You can even consider a twist on the upcycling program to incorporate charitable donations.

Take the Risk Out of Big Purchases: Invest in Brand Equity

Every brand refreshes its products on a regular basis, including their evergreen ones. But just because your brand has updated a product or product line doesn’t mean it’s out of circulation. Plenty of consumers are considering your brand on secondary markets such as eBay and Facebook Exchange. To those would-be purchasers, it’s still your brand that’s under consideration.

You can make it easy for shoppers to buy your brand in secondary markets by maintaining the original product descriptions of retired products, perhaps in a “classics” section of your website, or even create in-store events that feature them. If a product on a resale market costs quite a bit of money, the purchaser may be concerned about authenticity. The ability to reference a product on offer to the original product description will allay fears. It will also further build brand equity by telling consumers that you stand by your products, wherever they end up in the world.

Co-Sell With Affiliate Brands

Co-selling is an idea that gained traction a few years back, and it's one well worth considering. It’s premised on an idea that consumers who have an affinity for one brand may be naturally drawn to a simpatico brand. Here’s how it works: once a consumer completes a purchase, the order confirmation provides them with an opportunity to buy additional products from a co-selling partner. The additional sales will be applied to whatever credit card or payment used, sparing the shopper the burden of re-entering that information. In such scenarios, you will send your co-selling partner sales to fulfill, and vice versa.

Or you simply opt to carry the products of simpatico brands on your site and sell them directly to your customers. For instance, Todd Snyder, a men’s clothing company, sells products that are unrelated to its (core) product line but its customers are likely to use, such as Aesop personal care products. If you’re a furniture brand, consider partnering with a furniture wax brand or upholstery services to keep your customers engaged with your brand.

Finally, think outside the store. You can partner with a spa or even hospitality brands (e.g., “Love this mattress? Order one to ensure a good night’s sleep every night!”).

Hang Tight

The most important thing you can do is to hang tight and don’t panic. True, recessions are scary, as is the lull after a boom. But economic conditions will turn positive again. The number of new home starts is on the rise, and home prices are predicted to fall by the end of next year. True, mortgage interest rates are high at present, but Forbes writes, “most housing experts predict mortgage rates will decline to an average of around 5 percent to 6 percent in 2023.”

Another tactic: Empathize with consumers who may also be facing hard times. Use this as an opportunity to build goodwill. Offer tips, such as how to get one’s house in order or how to make specific products last long.

When markets rebound, consumers will return to the market to replenish or replace the goods they purchased five years previously. And they’ll remember the goodwill offered by brands and reward them with future purchases. By following these suggestions, you can ensure that your brand will be top-of-mind when they’re ready to purchase once again.

As the vice president, customer experience at Rightpoint, Tom Quish is responsible for defining and driving our CX offerings go-to-market and thought leadership, as well as supporting our clients directly with their CX ambitions.