Retail Creativity in Recessionary Times

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If recession can be your best friend [see AdAge's "Recession can be a marketer's friend. From soap operas to iPods: History suggests slumps spawn innovation" by Jack Neff, 3/24/08 - reg. requ'd], what kind of creativity have you seen surface lately that relates to retail?

Here's what I've discovered.

Service is the undisputed path to profitability, success and differentiation.

Kim Gavin in her August 4-11/2008 Floor Covering Weekly editorial says "It's the service, stupid!" According to a 7/24/08 USA Today article, Best Buy deliberately set out to improve its retail experience by training and educating its retail salespeople to focus on customers and service. "Sales training is one of the most cost-effective ways to make service and thus business better." [She also states "Now is the time to be positioning your business to take market share and be ready for the turnaround" a point that comes up below.]

Good merchandising has nothing to do with commoditizing the experience, gives customers reasons to buy and showcases value.

Warren Shoulberg's HFN Opinions from July 7, 2008, titled "Retails of Woe," written in reaction to Paris telling apparel retailer H&M that they were too "banal" to set up shop on the Champs Elysees, asks pointed questions of US retailers. More specifically, "Why aren't these stores blowing out new products? Why aren't they giving a cash-pressed consumer a good reason to come in and see what's new? The whole idea of fashion is to create replacement sales where none are needed, but that seems to have fallen out of fashion." He closes with "If there's one thing American retailing has proven over the years it's that good merchandising can overcome bad times. Banality, on the other hand, is just more of the same old thing."

Sonna Calandrino states in "Where's the beef?" from Floor Covering Weekly - August 18/25, 2008 - that it's time for the flooring industry to embrace value-based marketing by better communicating value to customers, offering value-oriented [i.e., better, premium and higher priced goods] and better quality options [i.e., quality as the consumer defines it], doing a better job presenting product, and pricing product on individual value rather than average cost. She recommends that you...

+ Understand what is selling in your store.

+ Price products [i.e., use square foot pricing] consistently throughout your store so your consumer can more easily compare and evaluate costs.

+ Feature revolving credit pricing special on some products.

+ Showcase new ideas and trends.

+ Upgrade products and communicate value with the options you showcase.

Understanding and adapting to your customers creates loyalty.

Katie Sprague's "Recession Survival Kit" in VMSD, August 2008 explains that "while some 'retailers' are closing, others are adapting. They're realizing customers aren't saving every penny, just changing how and why they spend it. In tough times, retailers who understand what's important for consumers - and build their brand around those key ideas - not only will survive but will soar." She explains further that a new type of retail experience is evolving "one more attuned to the ebb and flow of today's consumer lifestyle" and that falls into one of the following categories:

+ Experience: try now, buy later
+ Escape: go the happy place
+ Educate: get smart
+ Enhance: get better, stronger, faster
+ Evolve: change is on the way

MarketingProfs' article by Jeanne Bliss titled "Soothing the Savaged Customer Soul: 11 Ways to Show Love When Times Are Tough" [note: premium content] celebrates customer focus. Not only does she recommend walking in your customers' shoes, but also those of anyone interacting with customers:

1. Come up with creative approaches to solve your customers' problems.
2. Before prescribing the solution, listen really carefully to what customers are asking about and describing.
3. Invite customers [satisfied and dissatisfied] to help you determine what you could do better.
4. "Deliver small heroic acts of kindness."
5. Identify your best customers, thank them, involve them, appreciate them in a public way.
6. Support your front line employees.
7. Hire sales associates who exude passion for customers.
8. Contact dissatisfied customers. Ask them about their experience. Turn the experience and them around.
9. When you interact with customer service professionals, can you exude warmth and support?
10. "Redefine 'Good Life'..."
11. What ideas can you come up with to take advantage of what your community has to offer to interact with others, collaborate, reduce gas consumption or simply come up with new solutions.

Do it now!

Shoulberg's 8/25/08 HFN Opinions, titled "Season of the Switch," reminds us that now is the time to take risks and position ourselves for a turnaround. He says "this is the best time in years.. to go after new customers." Don't cut back on advertising; run more new products; get more promotional; go after new customers. [Which echoes the 8/6/08 issue of Knowledge @ Wharton includes "A Precarious Road: How Retailers Can Navigate Inflation's Hazards" which suggests - in addition to building inventory, including future price increases in contracts, and encouraging operations and marketing departments to collaborate - increasing advertising expenditures ["Those that do not cut back [on advertising] tend to have much bigger returns for their marketing spend [in economic downturns] than during times of prosperity."] and focusing on service.

Service. Merchandising. Understanding customers. Not earth shattering concepts, but certainly powerful ones in their ability to generate invaluable insights and unleash creativity at retail. Assuming you take them seriously, and get a move-on now!

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