On the face of it, the economic news continues to look grim: 84% of shoppers feel like they already live in recession – regardless of the official figures saying we narrowly squeaked not falling into recession in December – inflation remains at 10.1%, 16% for food, and even Valentine’s Day saw shoppers reign in their spending on love gifts for their partners (though, interestingly, not their pets). The lack of willingness to spend has also seen a spike in returns.
Against this backdrop it isn’t hard to see why small business insolvencies are tipped to rise 71% in 2023.
However, it’s not all doom and gloom: there are still some interesting success stories out there and many smaller retailers could look on these challenging times as an opportunity to reinvent what they do and how they do it to generate more sustained growth for the recovery that we are likely to see in late 2023 or early 2024.
Marketplace Secret Sales offers some insight into this. It works with many of the world’s leading luxury brands – some of them enormous, but many smaller, boutique sellers – to sell their end-of line items. It has seen a 70% surge in sales across 2022 and is tipped to grow another 83% in 2023. As of the end of January, it was already seeing 80% year-on-year growth.
This is driven by these smaller brands looking at how best to sell to the consumers that are willing to buy. Affordable luxury is a growth area and many, while selling on last season’s wares, are also creating their own ‘outlet ranges’ to sell on marketplaces such as Secret Sales. This is particularly true of brands looking to use such sites to expand internationally.
Selling overseas is becoming increasingly appealing to many smaller etailers as, despite the headaches brought about by Brexit, it offers the chance for growth. This is a trend that came out of Black Friday and many retailers are starting to cash in on it. It is hard to do, but not impossible, as our Guest Comment points out.
Pureplay furniture start-up Furniturebox also offers some insight into how a smaller retailer can actually make this happen. It saw massive growth across the pandemic – generating £17m in sales in 2022 – and now the company is looking at how to grow by selling overseas. While many other pureplay furniture sellers have had a much more torrid time of it since the end of the lockdowns, Furniturebox has played in clever, keeping its expansion at a manageable level and looking at how to slowly move to selling overseas. Let’s hope it pays off.
Another example is fashion brand rag & bone. It to has seen steady and sustained growth through focussing on the right balance of online and offline sales and it too now is looking overseas as the path to expansion. With the UK market (temporarily) stuttering, looking further afield, not least towards China, is the best way to make things grow.