Sunday, October 5, 2008

Can we beat the credit crunch?

Economic Downturn?...Dwindling Sales?...Maybe not. Some companies have made strong sales recently, despite the gloomy financial climate. Domino’s and ASOS are two successful examples. Domino's has benefited from consumers tightening their belts to save money, as eating at restaurants becomes increasingly expensive. While ASOS discounted clothes have continued to be in steady demand from young customers. In addition, both of these companies focus on on-line shopping as their main retail channel.

I’m sure we can find various other examples such as “pound” or “dollar” stores and discount chains.
But the question for us marketers is: Can every retail company beat the credit crunch by implementing new marketing strategies to cater for the cautious consumers? Can it also be the case for those companies that position themselves or some of their brands extremely high in the consumer’s mind (such as luxury brands)? How about niche or specialist companies?...What do you think?

Here is the story from BBC news website:

Two firms - a fashion retailer and a pizza firm - have bucked the trend and seen solid sales recently, despite the economic slowdown. Online fashion firm ASOS saw sales more than double in the six months to 30 September, compared to the same period a year earlier, a trading update shows. Meanwhile Domino's Pizza saw sales up 8.8% year-on-year in the third quarter.

Both companies remain positive in their outlook and expect strong growth to continue, as consumers seek out deals.
Despite the good news, shares in both companies slipped 2% during morning trading.

Many firms have been hit as consumers try to tighten their belts, following higher fuel prices and mortgage costs.
However ASOS, which has its own brand clothing as well as discounted designer labels, has benefited from solid demand from young customers and a shift to online spending. Chief executive Nick Robertson said: "We believe that our business dynamics and customer base should be resilient to the wider economic issues and that online shopping will continue to gain market share."

Domino's has also benefited from consumers' desire to save money, as eating at home becomes increasingly attractive.
James Cooke, an analyst at Panmure Gordon stockbrokers, said: "Despite the slowing of the economy and squeeze on consumer spending, Domino's Pizza continues to see organic growth in the business".