If buyers pull back, it's time to target premium buyers

As shoppers cut unnecessary spending, some companies promote their more expensive products and services.

And no, it's not counterintuitive: yes, recessions are times when economic enterprises, like dollar stores, tend to thrive, said Jorge A. Guzman, associate professor of management business at Columbia Business School at Inc.com in May. But focusing on a premium customer - who may not be feeling the impact of inflation as intensely - can be a smart move for companies that simply can't lower prices, even if demand continues. to slow down. Excluding gasoline and car sales, retail sales rose just 0.7% in July, the United States Census Bureau reported on August 17 - a sign that the inflation still dampens customer demand.

"I had no way of competing with the big box stores on price," says Jocelyn Ho, founder of Detroit-based houseplant store Rare Plant Fairy. With a degree in botany (which went largely unused in her career in merchandising and quality control at a luxury brand), Ho cultivated a hobby of growing rare houseplants and started her business in start of the pandemic by selling plants from his second bedroom. Today, she operates the business in a 5,000 square foot showroom.

"Some customers don't mind spending $1,000 or $2,000 on a few plants," she says. A single plant can run into the thousands - although Rare Plant Fairy also offers more "affordable luxury" options, like rare philodendrons for $75. While the low-cost factories got Ho started her business, it was the high-end options that really helped her flourish. "As soon as I had the capital to buy rarer plants that could sell for around $100, that's when I started to evolve," she says. "If I could sell 100 plants at $10 or 10 plants at $1,000, of course I'd rather sell all 10." Despite mounting economic pressures, Ho says her high-end customers have continued to buy plants.

There's something to be said for doing a lot with a little: it's the approach Carol Lang, an interior designer based in Fair Haven, N.J., leaned towards during the course. of the last few months. Lang, who started his business in 2013, recently rebranded his interior design business to cater primarily to luxury clients, who tend to hire him for more extensive, full-service design work.

Previously, Lang offered a one-day design service, which involved approximately two hours of in-person consultation with the client, followed by six to eight hours of sourcing and ordering in his studio. The service, intended as a more accessible option for customers, was priced at an "entry-level price" that was considerably less than the cost of a full-service project.

But blocked supply chains in the domestic industry made it more difficult for Lang to pursue this service profitably. "Over the past six months, the time it has taken me to serve these clients at the level I would like has not been balanced with the fair and equitable fees to be charged," she says. She should have doubled or tripled the price of this offer to adequately compensate for the more complex logistical challenges that now come with ordering household items, paint, etc., she says: "And raise the price so substantial, in my heart, doesn't feel right."

The best option, she says, was to cut out this lower-level service and focus on clients willing to pay for deeper, more intensive design services. By renaming her business, Lang says she was able to restore the income she lost by cutting her one-d...