7 Ways Entrepreneurs Can Take Advantage of the Booming Economy in 2018
Entrepreneurs have unique advantages in America. Here are 7 ways to grow and seize the opportunities ahead.
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The U.S. is still the best place in the world to own a business and our economy has inherent advantages in the form of safe borders, a democratic society and unmatched natural resources.
And, our economy is hot. The Wall Street Journal reports that the U.S. economy grew 4.1 percent in the second quarter, its best showing since 2014. While many economists are calling for a recession in 2019 or 2020, the underlying fundamentals of our economy remain strong.
So, where and how should small and medium companies capitalize on current conditions? Numerous product categories are proliferating:
1. Prestige beauty
According to NPD Group, beauty-related categories were up six percent in 2017 (high for a mature, widely-distributed product category). Consumers are gravitating toward ultra-premium skin and hair products made with the highest quality ingredients. One of our clients makes fair trade, eco-certified hair products that sell for over $5 an ounce, including organic extract sourced from Madagascar. Consumers are looking at labels to understand what they are putting on and in their bodies.
University of Michigan survey results show that consumer confidence is the highest it's been since 2004. Confidence combined with emerging technology such as the Internet of Things (IoT) is making for a fertile market for new product categories that didn't exist three or four years ago. As a percentage of income, we are saving less and spending more. Consumers seem willing to spend on categories that provide a respite from everyday life. Product categories such as night masks and novelty socks are surging.
As reported in the American Express Travel's 2018 Trend Forecast, international travel bookings were up over 40 percent in the first quarter of this year. Millennials are interested in history and cultural immersion. Fifty-three percent of respondents in Amex's recent survey said they will pay a premium to be pampered. Travel companies are creating curated experiences in parts of the world that are "less traveled."
According to One Click Retail, Amazon pet purchases grew 30 percent in the first half of the year (while all ecommerce is growing about 20 percent). Acceptance of pets is shifting quickly, as dogs are regularly seen on airplanes and even in pet-friendly restaurants. Spending on pets almost appears as a competition, with owners focused on clothing, treats and wellness.
5. Business infrastructure
The National Federation of Independent Business reports that business confidence is at its highest since 1983. During upcycles, companies invest in technology infrastructure, facilities, real estate and people. Buying cycles shorten as a result of freer spending. Turn up the heat in the September to October time frame on outbound sales and marketing activities, as companies are knee-deep in their budgetary cycles.
From beer to organic produce, consumers are making significantly more community-based buying decisions. Urban cooperatives are on the rise. Marketers should not only exploit local as a marketing message, but also take steps to ensure they defend their home turf where customer loyalty is likely to be higher.
The Energy Information Administration reports that the U.S. is producing 90 percent of its own energy. We have a massive supply of natural gas. Timber and water supplies are abundant. Pricing in the energy markets has normalized. The U.S. energy sector is poised to be highly profitable, especially for those who have new technologies that harness energy in an efficient fashion.
Other niche internet categories:
While Amazon and other online platforms are a free-for-all for large mainstream categories, there is room for inventive suppliers to dominate niches. For example, Google Trends shows that searches for green teas, matchas and detox products are trending up.
The weirder the category, the easier it is to stand out. Popular among hockey players and people in Portland, "beard oils" are en vogue. Alternatively, you could just buy a razor.