What brands do well when the economy takes a downturn? According to this Brandweek article, a few obvious ones like discount retailers and repair services. But there are also some surprises:
[C]onsumers are willing to spend on some forms of escapism. Entertainment can expect to fare well during a downturn, experts say. The weekend after a $700 billion bailout was passed by Congress, theatergoers flocked to the malls, sending the weekend gross for the top dozen flicks to $95.4 million, up 41.5% from the same period a year ago, per Media by Numbers, Encino, Calif.Another interesting side effect of a down economy is an increase in enrollment at two-year and vocational colleges. This only seems logical, however, if the school is know for affordability and outcomes, since potential enrollees will be especially focused on getting a return on their investment.
"The conventional wisdom is that an economic downturn helps the movie business," said Paul Dergarabedian, president of Media By Numbers, Los Angeles. "They find escapism for a relatively small amount of money."
Then there's beer. It seems only logical that watching the Dow plummet into the abyss would drive some to drink. The U.S. beer industry is expected to post its second consecutive year of case sales gains, per the Beverage Information Group's 2008 Beer Handbook.
Brands that benefit from hard times, however, shouldn't celebrate too hard: after all, what goes up must come down:
Wal-Mart, which seemed to be losing brand power only a year ago, today is poised to reap the rewards of consumers who are looking to save some cash. In September, as same-store sales for Kohl's and Nordstrom fell 5.5% and 9.6%, respectively, Wal-Mart's rose 2.4%. Author and branding expert Rob Frankel thinks the retailer's gains will closely mirror the economy: "Wal-Mart is the brand that reminds people they are poor. Nobody shops at Wal-Mart because they want to; they shop there because they have to. The minute the economy recovers, Wal-Mart's sales will drop like a brick."What's the lesson in all this? Be true to your brand promise, regardless of short-term changes in market conditions or trends. Because if you change your identity too often, you'll end up with no identity whatsoever--and that's a formula for failure in even the best economy.
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