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Comment - Response Marketing – a tactical approach for retailers moving forward into 2010

Retailers have suffered dramatically during this recession as customer spending has fallen significantly and the high street has become a far more competitive market place than ever before. By Paul Kennedy

GENERAL MERCHANDISE

Comment - Response Marketing – a tactical approach for retailers moving forward into 2010

Price cuts, offers and promotions including cheap credit – anything to incentivise buyers to step in store, or place orders online have become the norm. 

At the same time customer brand and retailer loyalty has diminished as customers become increasingly cynical and sceptical.  In response to this retailers and brands are placing increased focus and energies on targeted and innovative ways of reaching customers, retaining them and keeping their trust and loyalty through transparent and frank campaigns.   Marks and Spencer are good advocates of this and demonstrated one approach with their campaign ‘Doing the right thing’ in June this year.  This featured a ‘manifesto’ laying out the retailer’s commitment to ethical credentials.  Consumers are becoming increasingly savvy so it is critical that retailers invest in getting this right.

Despite some green shoots of recovery, the effects of the economic downturn are likely to be felt for a long time.  Certainly the impact on consumer behaviour and spending will not quickly dissipate as people remain fearful about job security and keep a rein on their spending.  Indeed this month (13th October) the British Chambers of Commerce (BRC) said business confidence was improving but the economy was still “frail”.

Marketers now need to focus close attention on if and how their efforts are translating to real results that will have the required long-term impact on their business.  This is especially pertinent as more and more marketers are jumping on the digital and social media bandwagon, without necessarily understanding or asking the question if there will ever be a return on their investment of time, energy and money.  Retail marketers especially understand the impact on their business of quickly deploying marketing tactics fully aligned to brand and business objectives.  As they continue to be hit hard by the downturn, it is crucial to grow the spend of existing customers without giving up on the need to acquire customers from competitors. 

A recent campaign from Waitrose suggests that it may be beneficial for marketers to go back to basics with relationship marketing – involving quick reflex creative thinking often at modest cost.  Waitrose’s recent ‘Arsene Wenger Essentials’ advertising campaign demonstrated that responsive (i.e. quick) marketing doesn’t have to be digital.  The cheeky humorous campaign captured the attention of a spectrum of national, marketing and retail press as well as engaging with an already loyal customer base. Critically, Waitrose understand that they cannot rest on their laurels. They continue to demonstrate sharp proactivity in reacting to a world outside, the detail of which will not feature in any marketing plan.

The impact of the recession on retail has been keenly felt, and responding to the Office of National Statistics (ONS) retail sales figures released in September 09 British Retail Consortium (BRC) director general Stephen Robertson said: “The official data confirms our own findings that the strong retail sales in June and July were not sustained.”  There has been talk that for fashion the new season’s autumn collections will offer a boost to the struggling high street however it is evident that retailers need to incorporate into their strategy a focus on developing loyalty. The art of marketing is balancing the need to build long term equity and drive results. In a sector like retailing and particularly fashion, the  long term is shortening all the time . Brands that suggest transparency, authenticity and generosity to customers as well as promoting causes that matter to their audiences are more likely to stand out amongst the competition and nurture existing customer loyalty.   Whilst it is crucial that the organisation plans activity carefully to ensure that it falls in line with brand values it is also important to remain agile and conscious of the impact on your supply chain. In days gone by a disappointing season may not have been the end of the line, these days it might. 

Nonetheless, the forecast is not all doom and gloom for retail, as a recent research report carried out by Marketing Solutions part of Callcredit Information Group demonstrates.  This survey looks at which industries have the highest response rates from consumers when sending marketing communications, and which communication channels consumers respond to.  Retail was the best performer, with over two thirds of customers (64%) saying they would respond to this sector.  A quarter (25%) of those surveyed by Callcredit, using its CAMEO with Attitude online panel, stated that they would get back in touch with retailers who had used email to reach them, with 19% saying they would respond to direct mail.

This is encouraging news and suggests that the retail industry is doing something right when it comes to talking to customers.  However with predictions that the effects of the recession on consumer behaviour will continue well into 2010, retailers would be wise to focus their energies and strategies around innovative, quick and quirky campaigns.


Paul Kennedy is Head of Consulting, Marketing Solutions, Callcredit Information Group

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