Seizing Opportunity Takes Strategy
Sales people looking to thrive in the current marketplace might consider seeking a position representing a luxury brand, as consumers seem eager to pony up excess cash for upmarket items. A quick look at categories experiencing growth looks a bit like a wish list for a big-budget music video, with high end fashion, makeup, and alcohol brands cashing in.
High-End Fashion Thriving
“The past two years should have been horrible for the €283bn ($407B Cdn) luxury goods sector,” writes Lauren Indvik for Financial Times, “yet global sales of luxury goods made a full recovery to pre-pandemic levels in 2021.”1
The Financial Times reports that the sale of handbags, jewellery and clothing ‘barely slowed’ during the pandemic, with French luxury group Kering seeing rising stock prices, largely the result of a strong sales for their Gucci brand.2 Big brands are increasing both traditional marketing and e-commerce efforts, gaining sales at the expense of smaller brands.
As Indvik explains, unspent sales and entertainment dollars are being funnelled elsewhere.
“With fewer opportunities to splash out on dining or travel, many consumers funnelled what they would have spent on luxury services into luxury goods,” she says.1
Pandemic-related relocation has not only impacted what people buy, but where.
“In the US, there has been a surge of buying among Americans in Austin, Pittsburgh and other non-coastal cities, as many people have migrated from larger metropolises during the pandemic,” explains Indvik.1
Luxury brands are also looking forward to new ‘virtual’ markets, as Morgan Stanley recently predicted that metaverse gaming and NFTs could represent an annual €50bn ($72B Cdn) revenue opportunity for luxury brands.1
It would be understandable if cosmetics sales people had been worried about the pandemic.
The combination of infrequent social gatherings, work from home arrangements, and lower airport traffic could have spelled trouble for the industry.
Despite this, cosmetics titan L’Oreal is doing just fine with its record sales in 2021. While much of the growth was fuelled by consumers in China, the company’s chief executive Nicolas Hieronimus says that the company saw no downward pressure on sales in either the US or Europe, noting people’s seemingly ‘infinite appetite for beauty’.3
Even steady sales would be an impressive feat given the aforementioned factors, as well as the seemingly inconvenient fact that people who ARE venturing into public are often doing so with their faces covered.
“With mask-wearing, lipsticks remain challenged, but mascaras and eye shadows have been exploding and fragrances have rebounded in a very spectacular way,” Hieronimus says. “People still want to indulge.”3
Premium Alcohol Sales
Now that everyone is immaculately styled, can I pour you a drink? During the pandemic, bored imbibers adopted the hobby of cocktail creation, to the benefit of upscale liquor brands.
“Consumers “discovered their inner mixologist”, said Ivan Menezes, chief executive at multinational alcohol company Diageo. “Part of the appeal of the cocktail culture is you can create much more versatile drinks than just reaching into the fridge for a boring glass of white wine or a lager.”4
Those sentiments are mirrored by Jefferies analyst Ed Mundy.
“There’s more cocktail making at home going on . . . people are trading up from brandy to cognac, from cheap drinks to expensive drinks,” said Mundy.5
Other Industries with Strong Sales Figures
Nescafe posted strong 2021 sales results in developed markets, including a 17.1% increase in sales of Starbucks-branded [coffee] products. Perhaps consumers needed a perk-up after consuming those cocktails? Mattel has seen strong toy sales as parents look to occupy their children’s time. Not to be outdone, the US is seeing rising car sales. (Adults need their toys too!)
US hotel group Hyatt reports that bookings for group business events has finally risen above that of pre-pandemic levels.6 Chief Executive Mark Hoplamazian credits pent up demand for the growth.
“There is prominent and very clear evidence that group [travel] is on the precipice of some significant surge in activity,” he said. “We booked and realised more business in the fourth quarter of 2021 than we did in the fourth quarter of 2019.”6
Appreciating Sales Staff
As companies look to move into a higher level of normalcy, it’s important not to take sales staff for granted.
“Sales representatives were the key to keeping many companies alive in 2020 and into 2021,” writes Donny Kelwig for Zendesk. “As we start to reopen and restart, however, companies are diving right back into stressful quotas and revenue goals without any recognition for the work sales teams have done.”7
Regardless of the trends in their particular industry, companies would be wise not to overlook the importance of their sales teams. In an employee’s job market, retention is as important as recruitment, making employee satisfaction an imperative.