How (some) retailers thrive in recessions

Winning in economic downturns

Big retail reports are starting to show that customers this year are getting pickier across all spend categories. On top of this, New York City influencers being “boring” is trending on Tik Tok, a sign of the fact that we're at peak affiliate marketing spend as the overconsumption bubble is near its end.

Meanwhile, socials and search data imply that butter yellow and polka dots are emerging as likely to be breakout apparel trends this summer – that is if the economy doesn't further dip into fear mode and shoppers don't get scared off completely.

Freight markets are finally rebounding from a prolonged freight recession, meaning that if you've been experiencing shipping delays as a shopper or a shipper, supply chains would have had a chance to get a little bit more reliable – if it wasn't for looming tariffs in the air.

I mention all of this because the key thing about owning inventory is that retailers are stuck between two crazy worlds – dynamic and outdated supply and volatile demand with real cash on the line. It's a lot to manage, and periods of economic downturns are what separate those who are operationally prepared from those who are not.

So let’s jump in — below are the top ways companies have historically stayed ahead in recessions.

Refined product assortment

In 2008, most brands saw sales plummet nearly 20%—but not Nike. Instead of panicking, Nike got surgical with its inventory. They tightened purchasing, cut underperforming styles, and doubled down on high-margin, high-demand products with strong marketing ROI.

By maintaining strict control over inventory, Nike didn’t just survive the downturn—they came out stronger, delivering double-digit growth and cementing their dominance for the decade ahead.

Recessions are tricky. Customers get pickier, budgets get tighter. The key isn’t just cutting for the sake of it—it’s about eliminating what’s not working while ensuring the right products are in stock, at the right time, and in the right quantity.

Strong quality and value prop

LVMH’s sales remained resilient during the 2008 recession and rebounded faster than most retailers in 2020. That makes sense—consumers of higher-priced goods tend to be less price-sensitive and more insulated from downturns. But just as critical is LVMH’s strong value proposition: a commitment to quality and brand equity that drives loyalty even when spending tightens.

Not every brand needs to be luxury to survive a recession—but there’s real value in cultivating customer retention through consistent quality, timeless design, and long-term brand trust.

Improved demand forecasting

Lululemon has been around for decades, but it moves fast when it comes to adopting new tech. The company has leaned into AI to sharpen its demand forecasting and optimize inventory reorders—especially during the 2020 downturn. By using AI algorithms to accurately predict demand, automate inventory management, and fine-tune stock levels, Lululemon was able to stay reliably in-stock throughout the athleisure boom—earning its spot as a category leader.

Even small improvements—like applying regression models or time series forecasting—can significantly reduce risk and make brands more resilient in volatile markets.