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April 2009

Creative Marketing in a Challenging Economy!

One day back in the early 1990s (another difficult time in our economy), I was on an airplane sitting next to the marketing executive from a major luxury automobile manufacturer. We were talking about some of the marketing ideas that had worked for her company at a time when consumers were reluctant to spend money. Surprisingly she told me coupons were among the things they had tried with considerable success.

A coupon promotion might be thought of as an unusual idea for selling luxury cars. But they tested several offers including $500, $1,000, and $1,500 coupons mailed to previous customers and others who had recently expressed an interest in buying one of their cars. It turned out that the $1,000 coupon worked best resulting in measurable sales increases of cars priced in the $30,000 to $35,000 range in those days.

Rampant Discounting

A growing number of national chains are resorting to across-the-board discounts to bring customers into their stores. As the recession continues those discounts keep growing--from 20 or 25 percent off to 40, 50, and more. Another common offer is "Buy One, Get One..." at half off or free. Or "10 to 15 Percent Off Aready Reduced Prices." I recently received an email offer from a menswear chain of "40 to 60 percent Off Everything in Stock" from its web site.

As we've seen in recent years, consumers have come to expect buying the things they want at a discount. And it is likely that as they get used to buying at 40, 50 and 60 percent off, they will be quite resistant to going back to higher prices when the recession is over.

I believe retailers need to start right now looking for innovative ways to get customers into their stores. Yes, coupons are a way of life in some kinds of retail businesses, but they certainly weren't in the car business when the company mentioned above tried it with measurable success.

Are there innovative ways to use coupons in your business?

One of the things we've been seeing over the last few months is casual dining and fast food restaurants offering free food on one specific day. When Denny's ran its Superbowl ad earlier this year offering free Grand Slam Breakfasts on February 4, many of the pundits criticized the idea.

It turned out to be a spectacular idea with Denny's Restaurants seeing more than 2 million customers taking advantage of the free offer that day. Best of all, that one-day promotion resulted in a significant spike in business for days and weeks later with customers jamming their restaurants.

Are there innovative ways for you to use a free offer in your business?

What other marketing ideas that may be common in other retail segments or even other industries can you adapt to your business to get customer attention and sell more merchandise? In today's challenging economy, retailers who embrace innovative marketing tools and get creative will more likely attract customers and thrive. Those retailers who do the same things they've always done expecting different results will struggle.

MOVING AMERICANS!

In a report from the Census Bureau last week, we've learned that just 11.9 percent of the population moved from one home to another between 2007 and 2008, the lowest percentage since the Bureau began tracking moving habits back in the late 1940s. The percentage for homeowners was just 6.6 percent and 27.7 percent for renters. While this is certainly a reflection of the poor housing situation, it can't be good news for the home furnishings business. When people move they buy new furniture. Let's hope the economy improves soon and Americans start moving once again.

VINYL RECORDS!

Here's one of those stories that's hard to believe, but consumer electronics retailer Best Buy is thinking about devoting eight square feet of space in its stores to stocking vinyl records. Yes, vinyl records like we used to buy before CDs and downloadable music became the preferred way to buy music. According to Nielsen SoundScan, 1.9 million vinyl records were sold in 2008--an 89 percent increase over the previous year.

A growing number of music labels are bringing back vinyl records from such artists as the Beach Boys, Jimi Hendrix, and Radiohead. The higher price for vinyl may help generate a few more dollars for the labels and music stores. Setting aside eight feet of space for vinyl records is a start, but it doesn't compare to the space many of the nation's independent record stores have long devoted to this beloved way of listening to music.

A SHIFT IN THE LAW!

Two years ago the U.S. Supreme Court ruled against retailers and for manufacturers in the ongoing battle over who can decide the pricing of products sold online and in stores. Retailers were the losers. The Supreme Court's decision was the result of a lawsuit filed by a manufacturer against a single-store retailer to stop that retailer from discounting the manufacturer's products. Such policies are called M.A.P. or "minimum advertised pricing" and are used by manufacturers to control how their products are sold in stores.

Earlier this month the state of Maryland enacted a law that bars manufacturers from such practices and a growing number states are following suit. There is a bill before the U.S. Congress that would outlaw such practices by manufacturers once and for all. It has also been reported that the Federal Trade Commission has been looking into manufacturer price-setting policies.

Until Next month...

Coming May 28th!
RETAIL SUPERSTARS

George Whalin's new book, Retail Superstars: Inside the 25 Best Independent Stores in America, will be available for purchase in bookstores and online May 28, 2009. Visit RetailSuperstars.com and see why we're so excited about this book.

To order, click here.

George Whalin's Speeches and Seminars

George's presentations are always fast-paced, high-energy, and entertaining. Best of all, George jam packs his programs with real-world ideas and insights attendees can take back and put to use right away to build their businesses, sell more merchandise, and better serve today's savvy consumers.

Whether you're planning a convention, trade show, corporate conference, or managers' meeting, a presentation by George Whalin will add value for your attendees. Check out his presentation topics at whalinonretail.com.

If you have an opinion or thoughts about any of the topics posted, I invite you to comment at retailerblog.com It's easy to do. And if you have a topic you would like to see addressed on the blog, send me an e-mail at george@whalinonretail.com.

An Invaluable Resource in Tough Economic Times!

George Whalin's book RETAIL SUCCESS! provides real-world solutions to the challenges retailers face in these troubling economic times. This book, filled with George Whalin's retail expertise, is written in the same easy-to-grasp style as his monthly newsletters.

Go to our web site today where you'll find several other books in addition to RETAIL SUCCESS that George recommends.

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