In the latest poll of consumer sentiment published today most people feel that they are not going to be any worse off in 2019. This is of course in contrast to official data from the Bank of England and the disaster of the stock market, the Pound and weak housing data. The fact is that we may not feel worse off because we have more or less full employment but in reality, we are worse off!
Nowhere is this more apparent than in retail of course. A market which is super sensitive to real consumer sentiment regardless of what people tell pollsters.
The last big retail failure of 2018 was the HMV, an old time physical entertainment business rescued from administration and then run by retail restructuring business Hilco for the last five years. However even Hilco couldn't restructure their way out of an accelerating trend away from the physical to virtual downloads with much of the content available for free.
Following hot on its heels was Mahabis, an upmarket slipper brand whose owner Ankur Shah was interviewed in The Times in October and it was claimed that he was dominating an unloved niche with an explosive success which had grown from zero to over £20m of sales in no time at all. Maybe, but at what cost? I'm sure that I wasn't alone in noticing the surfeit of recent advertising in which the brand was investing in order to achieve this claimed miracle.
So, happy new year to you all, but remember in 2019 we are all a bit poorer than before and sooner or later that will register, we don't like paying for stuff that we used to regardless of how old, loved and trusted is the brand selling it to us and most importantly no one can afford to ignore the two most important indicators in business which are cost of customer acquisition and lifetime customer value regardless of having a hockey stick sales line.
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