How can retailers lure consumers back into holiday shopping mode?

CounterStrategy is a new feature that asks industry thinkers to put their creative brainpower behind a specific business problem or topic. There is no client brief, no rules - just out-of-the-box thinking with a solution that could involve a mix of promotional and communications efforts or perhaps even a change in the way a company or category does business.

This issue, we asked pundits to focus on strategems to combat the drop in consumer spending. Major retailers are anticipating poor third and fourth quarters thanks to cautious consumers and widespread discounting. There is no upturn in sight, and retail analysts are forecasting a gloomy holiday

shopping season, traditionally the make-or-break period for retailers each year.

Is this inevitable or is it possible for retailers, like Scrooge, to alter the ‘shadow of things that may be’ with words and deeds?

Bob Stamnes

President

Glennie Stamnes Strategy

Vancouver

Bob Stamnes got together with the agency’s director of client services, Allen Black, and others on his team to brainstorm the dilemma, and came up with three concepts. Based on their observations of the current market climate, here’s what will trigger sales this holiday season:

‘We are in a down market, with consumer spending low and consumer confidence even lower. There is a wait-and-see attitude, regarding both the war on terrorism and the economy here at home. After the events of 9/11, the focus will be on family and things that bring comfort versus more material wants and ‘thrill’ spending. Perhaps only within the children and youth categories will spending and giving reflect the usual patterns, as parents and relatives strive to insulate and comfort youngsters.

‘Donations in general will increase, so donations-with-purchase will as well. Rather than stop buying, people will think in different ways; of family, responsible consumption and items that bring people closer together and shield them from these iconoclastic times. How do we leverage this mind-set?

‘A major fashion retailer such as the Gap or Banana Republic could drive traffic and create a wonderful halo effect for their brand by developing the right in-house Christmas program. The plight of the desperately poor Afghan people is being publicized and this Christmas thousands will face a freezing, foodless winter. The Gap could ask people to bring their old winter coats, sweaters, gloves and mitts to in-store donation boxes and in return give customers certificates for $10 off Gap outerwear or other purchases.

‘This includes a huge PR spin, a clear sales incentive and an urgently needed outcome. This is mission-based marketing at its most seminal.

‘Secondly, position a large retailer as a street-level conduit to community activity, activism and volunteerism – a cultural hub as well as a commercial one.

‘The Bay could set up an in-store volunteer centre with an information desk where you can find out who needs help now, whether it’s turkey dinners for the homeless, driving a collection route for the Salvation Army, assisting a local school’s toy drive, whatever. A bounce-back gift certificate or points offer could be connected or maybe it simply drives traffic and gives a reason to be in a shopping frame of mind.

‘Lastly, organize some major Canadian retailers to come together to deliver a unified message to shoppers – ‘We are open for business, the economy needs you, and let’s not let the evil-doers pre-empt our normal lives.’

‘Feature the heads of large retailers in the same ad – even have competing retailers coming together much like different political parties in the U.S. and Canada have united in a single cause. Presidents of established Canadian institutions such as The Bay and Canadian Tire are obvious choices, but it might be wiser to skew younger, using the two boyish founders of Roots or stores with a socially responsible heritage such as the Body Shop or Starbucks.’

Mark Weisbarth

President

Due North Communications Toronto

Mark Weisbarth believes that before retailers develop their messages for the holiday season, they need to look deeply into the reasons why consumer spending has declined.

‘I don’t know if advertising alone can solve the problem. It won’t be as simple as running some advertising for 35% off. My advice to a client with big holiday season concerns is to get some researchers and start asking some pointed questions. You first have to identify what the issues are. There’s one issue that goes way beyond money, and it is: ‘Do I feel like being in a place with a lot of people right now?’

‘Every retailer in Canada – and most of them are in malls – should sit down with mall management and talk about their security procedures. You need to reassure people who are gathering in a crowded place that the mall is safe and secure. Start by putting people at ease.

‘The second thing is to think about messaging in their communications in a manner that shows you understand what people are thinking rather than pretending it’s not an issue.

‘You also need to tell people you have a broad line of merchandise that appeals to every price range. People with money are still spending. You need to appeal to those at the lower end of the economic spectrum.

‘I would focus my energy on the most productive time. People will be out there shopping on those dreaded last few days before Christmas. You might want to refocus your energy a bit [earlier] because people right now may be shakier than they will be the week before Christmas.

‘I would also set aside a tactical pool of money to be able to react quickly to things. The world is changing every day.’

Weisbarth cautions retailers not to jump on the ‘patriotic bandwagon’ like many U.S. advertisers because it will backfire if executed improperly.

‘Every major manufacturer in the U.S. is advertising ‘Keep America rolling.’ Don’t tell me I need to ‘keep America strong so go buy a car.’ I find it not only offensive, but also ineffective. I don’t mind a corporation doing a commercial that says, ‘we’re shaken but we’re strong, keep the faith.’ But then don’t say, ‘as a result of keeping the faith, we’re having a 2.9% financing deal.’ That seems so crass and exploitive, taking advantage of people’s emotions.’

Arthur Fleischmann

President and CEO

John Street, Toronto

Arthur Fleischmann says retailers may want to think about rewarding their loyal customers as a way to encourage Christmas shopping, although it should be the type of program they’re doing all year round:

‘At this point it’s a little too late. There’s really nothing innovative that’s going to happen this year to shake things up for the Christmas season. I have a feeling the retail scene will be characterized once again by the standard big scratch-and-save events. The Christmas season will be driven by whoever has the best deals on the stuff that people want.

‘What they should be doing throughout the year is focusing on loyalty so when push comes to shove, customers aren’t doing the trade off: ‘Do I go to The Bay or Sears? No, I’m a loyal Sears shopper, so I’ll go to Sears.’ Retailers treat their loyal customers horrifically. They don’t really do anything to reward loyalty in good times so why the hell should we think that loyal customers will reward the retailer in bad times?

‘At the very least they should be going back to their databases and focusing on getting the loyal customers into the store sooner. Retailers [should] look at their Christmas spending. Are they spending the same dollar on the customer who has never come into the store as on the customer who came in 12 times in the past year? More often than not, the answer will be the same regardless of whether it’s a loyal or transient shopper.

‘Retailers might want to take some of those dollars and spend them against the customers who have been loyal in good times, whether through outbound e-mail or targeted direct mail. Work on rewarding them with special events – come in early to shop before the store opens, or offer cordoned off parking. Something that does more for the shopping experience for the loyal shopper and doesn’t just focus on scratch and save.’

As to what impact the economy and Sept. 11 will have on holiday shopping, Fleischmann did what he calls ‘mother-in-law’ research and talked to friends and family in both Canada and the New York area.

‘The consensus seems to be that while political correctness would be, ‘Because of Sept. 11, I will pursue more humanistic values,’ Canadians aren’t so much affected by that when it comes to shopping. They haven’t shied away because of anthrax scares and terrorist attacks, they’re shying away from conspicuous consumption out of fear of economic downturn and high unemployment.’