Eaton’s must study customers

After filing for bankruptcy protection late last month, Eaton’s quickly launched a campaign designed to reassure the Canadian public of its future.

But insiders say, while the campaign may strike an emotional chord with consumers, the retail giant will have to do a lot more to actually bring shoppers back.

The national television, radio and print ads feature George Eaton, ceo of the T. Eaton Company, thanking Canadians for their continued support during its troubled times.

‘I think the ads were a good move on their part,’ says John Torella, a principal and senior consultant in marketing at the J.C. Williams Group in Toronto. ‘But what do they do next?’

According to Augustin Manchon, director of the Toronto office of Braxton Associates, a division of Deloitte and Touche Consulting, Eaton’s is going to have to make a serious effort to reacquaint itself with its customers.

‘Eaton’s has a huge database of long-time customers that use its credit cards,’ he says. ‘The company has not taken advantage of it to learn more about the consumers that shop there.’

Manchon says using its customer database may help the company better target its marketing instead of it having to try to be all things to all people.

‘It can better target customers that visit a specific department, like sporting goods,’ he says.

A recent radio campaign promotes the retailer’s ‘factory outlets’ which are located in its larger stores. The voice-over encourages shoppers to visit Eaton’s Canadian outlets instead of shopping at American outlet malls across the border. Torella is not optimistic about that move.

‘Why would you launch a campaign about your clearance program?’ he asks. ‘Consumers will assume after you announce your financial troubles that you are trying to quickly clear out your products.’

Manchon can understand the approach but thinks the commercials are a small solution to a big problem.

‘Sears has its u.s. counterpart, the Bay has [its mass-merchandising division] Zellers, but Eaton’s needs something like that,’ he says. ‘Maybe promoting the outlets is its way of bringing in new shoppers.’

Although Eaton’s is the latest big retailer to experience difficulty, both analysts suggest that other Canadian department stores are also suffering from soft sales.

Both also agree that Eaton’s and some of its competitors will have to revise the way they approach consumers if they expect to survive in the long term.

‘Eaton’s management will have to be more flexible and innovative in the way they approach the market instead of relying on customer loyalty,’ says Manchon. ‘The company will also have to update its merchandise mix, which it has done in only some departments.’

Eaton’s attempted to reach a younger generation of shoppers last year through a television campaign that featured popular Gen-X fiddler Ashley MacIsaac.

But the overall approach has been to promote itself to no particular audience. The company’s tag line reads ‘Eaton’s, we want to be your store.’

The Bay, which is operated by the Hudson’s Bay Company, is Eaton’s biggest competitor. Recently, it has refocused its advertising and is using European supermodel Claudia Schiffer in its campaigns.

‘That’s what they have been doing right,’ says Manchon. ‘They’re focusing mainly on one area, like fashion, and gaining credibility by using a well-known model.’