Retail - Recession a Good Time for Retailers

If ever there was a time for guerilla marketing this is it. As the focus has shifted to conserving cash, retailers and brands alike have cut their marketing budgets. One survey taken late last year showed 33% of national advertisers, including some of the nation’s biggest brands, were planning on cutting their advertising spend in 2009. Dick’s Sporting Goods told analysts last week it would reduce its advertising spend as a percentage of sales in Q3.

Marketing professionals argue that’s why a recession is the best time to boost your marketing activity. As other brands and retailers dial down their messaging there is that much less clutter to break through.

Even if you don’t have more money to spend on advertising, this is a good time to focus your messaging on whatever marketing you can afford. In a survey conducted for the OIA Specialty Retail Operational Report 2007, more retailers (53%) attributed increased sales to improved advertising than to eight other reasons, including more advertising and a strong economy. Brands, retailers and marketing gurus consulted last week by OIA WebNews indicated they are getting the best return on investment by focusing on existing customers, building up their online communities with user generated content and generating public relations.

“I would wrap all the marketing dollars I had left around those ideas that live in PR,” said Gregg Bagni, a marketing consultant whose firm Alien Truth Communications works with brands in the active outdoor lifestyle market. “I think PR is elevated to another level because PR has a lot more extension and legs on the web from a viral standpoint.”

Below are some marketing tactics that appear to be working in today’s environment.

A constant flow of promotions. Use your close-out buys to fuel a steady stream of sale promotions expected by today’s consumer. Dick’s Sporting Goods has been emphasizing $29 and $39 running shoes in its Sunday circulars for months and is working closely with suppliers to identify other close-out deals to drive traffic. Offer first-come, first-serve daily or weekly deals on your Website to those willing to sign up for an e-mail alert.

Expand rental/outfitter business. Gear rental and outfitting enjoy the highest gross margin of anything outdoor retailers do and will drive motivated buyers into your store.

Focus on existing customers. Existing customers tend to be twice as profitable as new ones, so start rewarding them. Reinvigorate your ties with local outdoor clubs, schools, parks and recreation departments and other NGOs. Partner with them to bring in speakers or hold events that will elevate your brand. If creativity is not your forte, hire a local enthusiast for 10 hours a week to work on promotions and community relations. Give all employees 20% off coupons or $10 gift certificates for distribution to enthusiasts, friends and family outside the store.

Mock “Liquidation Sale.” Bagni offers this free guerilla marketing tip. Buy a gigantic block of ice, carve your logo in it, put it in your parking lot and announce you are having a “Winter Liquidation Sale” until it melts. Hook up a live web cam to your web site to show how much ice is left and send photos to local TV stations every day. “In March, if you’re above Mason-Dixon Line, you can probably get a week out of it,” said Bagni. “The down side is if it melts quickly you’d have to put a tent out there, but then you could have fun with that. It’s totally guerilla.”