What Recession? 5 Businesses That Are Thriving
Despite bad news about job cuts, foreclosures and bailouts, there is good news: some businesses are doing well in the recession. From books to cosmetics to cars, consumers are looking for areas to cut costs and certain companies are stepping up to the plate.
These flexible businesses are doing more than just offering discounts; they are also adding value to customers' lives and earning their trust. This extra effort is something that's more important than its been for the last 40 years because customers are "infinitely more discriminating about where and how much they are going to spend," says Scott McKain, author of the forthcoming book, "Collapse of Distinction: Stand Out and Move Up While Your Competition Fails."
Here's a look at five successful businesses:
Based in Bentonville, Ark., this well-known retailer reported a 3.4 percent increase in comparable-store sales for November. Between September 2007 and September 2008, Wal-Mart hired around 33,000 new associates, according to spokesman Greg Rossiter. He says the store strives to offer high-quality products at low prices, and one-stop-shopping. Wal-Mart has worked to improve customers' experience, Rossiter says, and they come back because of it: they can afford products of good value, encounter helpful sales associates, and easily navigate stores. "At the end of the day, it's because our customers depend on us and we have been advocates for our customers," he notes.
2. e.l.f. Cosmetics
Eyes Lips Face (e.l.f.) aims to provide cosmetics of "extreme value" at affordable prices online - many products are $1 each. This lets the consumer indulge herself, maybe buy gifts for others, and still afford lunch out or an iPod, says Joey Shamah. Sales have grown consistently for the last six months, both year-over-year and month-over-month - November sales, for example, were up 300 percent over November 2007, and due to the growth, e.l.f. has doubled its staff from 15 to 30. Shamah says the company adds value to consumers' lives by providing a quality brand they trust, and it's easily available online. The site is building on the success of social networking, offering customers a chance to be connected to a beauty community where they learn about products and can trade advice and experiences, according to Shamah.
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This online coupon provider has more than 900 clients and thousands of Web sites using its services, including most large grocery retailers, according to CEO Steven Boal. Since the start of 2008, the company has grown from 70-75 employees to 135 employees, and plans to fill 40 open positions in the next few months. Consumers print coupons from the site itself, or on sites using its services, such as Safeway, Kroger, Kraft Foods and Macaroni Grill. Boal says the company has seen accelerated growth in the recession, as more people print coupons online instead of clipping them from newspapers. Coupons.com adds new coupons every day, a feature that Boal believes draws consumers back to the site multiple times a week.
A discount retailer based in Dallas, Half Price Books buys merchandise from people, and sells almost everything at half the publisher's price or less. The company has stores across the country and has added about eight new stores this year. Plus, it has experienced same-store sales growth of 8-9 percent for several months. Kathy Doyle Thomas, executive vice president, says the business offers something people are still seeking, even during a recession: affordable entertainment and information. "We have $2 paperbacks, so that's a great value," she says. Customers are buying books for hope and knowledge, Thomas says, using them for self-help purposes, to learn about new career fields, or cities/locations with good employment opportunities.
CEO and founder Sergio Stiberman says his online auto-lease transfer company, which matches car shoppers with people looking to get out of car leases, meets an important consumer need: downsizing from pricey leases into something more affordable. The Web-based business offers a national market, so if you're selling a convertible from a cold-weather clime, for example, someone in Florida can grab your lease, Stiberman explains. The service costs $79 to list a vehicle and a $149 transfer fee. Stiberman says he plans to expand LeaseTrader next year and hire more staff.