In the 33 years since Cathy Butler's mom opened Formally Yours, the bridal boutique she now owns in Lilburn, Georgia, the number of marriages per 1,000 U.S. residents has declined almost one-third--from 9.8 in 1990 to 6.8 in 2009 according to the U.S. Census Bureau.
Today, according to Demographic Intelligence, an agency that tracks marriage and fertility rates, Americans are getting married at the lowest rate in 100 years. But despite this evidence, Ms. Butler insists demographic trends have not hurt her bottom line. In fact, she says they've provided an opportunity to get to tailor her offerings to an evolving customer base.
No matter if wedding businesses feel the pinch now, the point is, if current trends continue, they might one day soon. That means if diversifying or retooling is in order, now's the time to strike.
Here are a few survival lessons for companies in the wedding industry that any business going through a similar customer drought might learn from.
Cater to changing needs
There may be fewer weddings, but the average amount couples spend is recovering along with the economy--up from $26,984 in 2010 to $31,213 in 2014, according to TheKnot.com. This gives savvy business owners a chance to attract customers willing to spend more than ever. Butler says she's been able to adapt to demographic trends because she's so familiar with her customers. "I don't see it as a decline," she adds, "there are just more interesting weddings now."
Variety comes in trends like getting married outdoors, in a barn, or in the Caribbean which dictate style selection; the size range of the average woman determines what she keeps on the rack for fittings. Same sex marriages offer a new set of customers, and she's had some repeat customers preparing for a second marriage. "But they're not looking for the princess gown this time," she says, "I have to offer gowns for more mature brides."
Dr. Jeff Cornwall, professor of entrepreneurship at Belmont University says businesses can benefit from catering to niche audiences, even in a declining market. "What gives you value in a niche market is the intensity of your relationship with the customer," he tells Inc.com.
When serving a very specific group of people, businesses have to figure out what level of specialization customers desire. For example, budget-centric wedding dress shoppers don't care if the store also sells prom and pageant dresses, while higher budget customers want a more specialized experience.
Raise the bar on performance
"In a fat, happy marketplace, some businesses can get away with not being the best," Cornwall says. So if you've been a little sloppy in customer service or product selection in the good times, now is the time to shape up before the market thins out.
When a market recedes, everybody's business is going to suffer for at least a short time, Cornwall says, and the survivors are those who are best at identifying what customers want.
Sometimes that means offering less instead of more. Over the years, Formally Yours has scaled back its selection of prom and pageant dresses to focus on serving brides. Butler says her comfort and expertise lie in the wedding market, so that's where she thinks she can provide the most value for customers who travel to Atlanta from all over the South to find the perfect wedding attire.
Hoard cash like there's no tomorrow
Even if you're doing really well in the operations department, if you see a downturn coming, it's always a good idea to save for a rainy day.
Cornwall advises focusing on cash flow: building cash reserves; maintaining low levels of debt and ensuring lean operating costs. That way you'll survive the lag, before the weaker businesses are weeded out, when even the most effective businesses will need a financial buffer.
Pretend you're starting over
Despite evidence of a declining marriage rate, Cornwall wouldn't discourage an entrepreneur from entering the industry.
"Sometimes it's the new entrants that are best at surviving," he says. "They don't have the old bad habits of veteran players, and they understand the market challenges much more clearly than established businesses."
Recessions have been touted as a good time to start a business, and shifting markets can provide an opportunity for existing businesses to look at the industry with fresh eyes as well. Don't let the new entrants get ahead--ask yourself how you would organize or spend differently if you were starting over today. Down markets can be ideal for putting fresh ideas into action; just don't get cold feet.