It’s scary to accept (especially for small business owners) that we’re in, or at least are heading toward, a recession. But just because things may look bleak right now doesn’t mean you need to quit growing your beauty brand or throw in the towel altogether. In fact, beauty and skincare brands can fare very well in recessions, as many buyers have inelastic demand for their favorite products.
You can come out on the other side thriving, but only if you take the proper steps to prepare your brand for a dip. Here are some ways to recession-proof your business.
Strengthen Your Supply Chain
I’m sure this isn’t the first you’re hearing of supply chain issues. When Covid hit peak numbers, the supply chain slowed way down. And the change seems to be around for the long haul. Businesses that aren’t prepared can face inventory shortages, which can disrupt liquidity and anger customers.
To be proactive, I recommend finding backup suppliers for your packaging and manufacturing. This way, you’ll have options if your supplier either has a shortage or jacks up their prices in the face of higher demand.
During the 2008-2009 recession, I was a brand manager for a brand that sold on QVC. The buyers strongly encouraged all brands to add more value for consumers by increasing the product size. They suggested that we supersize the products, going from a 4oz to 16oz or even 32oz size. Many of the brands did just that. They increased their volume size significantly while maintaining their current pricing.
It was a terrible mistake. It majorly cut off their reorder rates as the customers now had products that lasted months longer than before. This left brands scrambling for their next sale and searching for new customers when most people tightened their purse straps. The brands that survived ended up creating “new and improved” versions of their products in sizes more consistent with 30-day use.
I recommend you find ways to increase value without significantly increasing product size. For example, you can include a free travel size of a complementary product (which may have the added benefit of future sales).
Enhance Your Customer Service Experience
When the state of the world gets a bit precarious, it’s more important than ever to provide excellent customer service and remind your clients why they should continue buying from you. For most people, beauty products are something that brings joy and confidence. It’s not something they’ll want to give up. So it doesn’t take a lot to keep them invested.
How can you boost your customer service experience? Reply to those emails and DMs as soon as you get them. Delayed response times can be a deal-breaker for customers who are already not totally sure about spending money on your products. Remember that in times when money is tight–loyalty wins. And loyalty comes from trust developed over time.
Cut the Fat From Your Expenses
When you run a business, every expense feels essential. But the truth is, they’re not. I bet you used to do some of the things you pay for now on your own. Pay attention to the expenses with the highest ROI and cut the costs that don’t help your business grow.
That might mean cutting out non-money-making roles, spending less on social media ads, or finding creative and cheap ways to market (like guerilla marketing campaigns). Maybe it’s cheaper to take a class on SEO and review your own content than to hire someone to do an SEO review. Or perhaps you see diminishing ROI on your ads after the first $500/month.
There are so many reasons I love the beauty industry, but one is that we consistently grow, even in times of recession. Right now, all signs point to a thriving 2022-2023. But not all brands will see those results. You must prepare your business for growth and not allow yourself to lead with fear.
No matter what you do, maintain your business growth to the point that you never have to turn down orders or add shipping delays. You can do this!
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