Editor’s note: This article was first published in March 2014, describing Spain near economic depression. The figures are from that time: the Diez Euros franchise had 42 shops, and Telepizza had sold more than 2 million 1-euro pizzas through its weekly offer.
With a situation close to economic depression, in which consumers are aware of the importance of saving, entrepreneurs are being forced to develop new kinds of strategy. The Spanish TV programme Comando Actualidad has looked at new market trends, seeking out the businesses that are working in times of crisis. Some time ago we came to the conclusion that the most profitable businesses today were those related to clothing, food and technology.
The programme shows that one of the most widely used market strategies is to cut profit margins by offering cheaper products to consumers while increasing sales volume.
1. Second-hand shops
Shops that buy and sell second-hand goods have become practically a necessity. The entrepreneur featured on the programme says that many of his customers are people selling him their household appliances because their homes are about to be repossessed. Most of his profit comes from selling second-hand mattresses and appliances, although he uses his shop to sell all kinds of products.
2. The “everything for ten euros” franchise
When we covered the Diez Euros franchise, it had fewer than 10 outlets in Spain. Today it has 42 shops. We predicted a bright future for it, since it pioneered single-price fashion, where quality and price go hand in hand. Its secret: buying in large quantities to get discounts and cutting its profit margin to sell more, while continuing to offer a more than decent quality product.
3. Discount coupons
Although it might seem that the discount coupon business has already been taken by giants like Groupon, the truth is that there are many small companies carving out a niche in this sector and still managing to generate significant profits. With consumers finding it hard to buy, discount coupons have become a way of life for many people, and that can still be exploited, because there really is still room for new companies. It’s a matter of continuing to innovate in this business.
4. Energy consultants
Rising electricity prices have become a problem for most Spaniards, but they have also become a business opportunity for some companies that offer their customers a flat rate for their electricity, cutting the bill the customer used to pay by as much as 50%. All of this is thanks to some changes to the home, changes whose cost, according to the documentary, the company covers. It’s certainly an interesting business idea, and if it is as they say, just as interesting for consumers.
5. Low-cost design
Anything “low cost” works. These entrepreneurs have created a low-cost interior design and decoration company and say they have furnished and decorated homes for just over €3,000, and they still make money. A service that has certainly been in high demand during the crisis.
6. Outlet stores
When large and medium-sized brands can’t sell their inventory, the products usually go out of fashion, so they tend to turn to outlets. Several entrepreneurs have known how to take advantage of this need, opening their own warehouses and becoming the sellers of the products the brands couldn’t sell, with juicy discounts for the end customer. Discounts that sometimes reach 80% off the products’ original price.
7. Low-cost hospitality and super deals
There are several examples of sales strategies in the hospitality business. One is Telepizza, with its well-known offer of €1 pizzas one day a week. According to the company’s marketing director, it has sold more than 2 million pizzas at €1 this way, something he says helps make the brand known and build customer loyalty.
Then there is the bar owner who offers drinks or beer with two large tapas, a way to eat for practically €2. The free tapa is very common in Andalusia, but outside Andalusia it’s an innovation, so if you also offer two free tapas, you’re firmly in bargain territory.
In times of crisis, consumers look for deals and bargains, so by knowing how to take advantage of this new consumer trend, with ingenuity, innovation and the right strategy, we can turn bargains into our own profitable business. You can watch the programme below.
Watch: Full episode “Gran ganga”, Comando Actualidad (RTVE, in Spanish)
Further reading
- The future of business: the 7 main technology trends
- 33 profitable businesses for 2014–2025
- 14 business ideas to start this year
Featured image: Arkangel from Granada, España, CC BY-SA 2.0, via Wikimedia Commons.
