A Tale of Two Retail Marketing Strategies
Yesterday I was one of the panelists on a public service program called Economic Outlook that runs on our local PBS station, WNIT. The subject of this show was Holiday Retail Spending and Advertising. The pre-read provided to the panelists in advance of the videotaping posed a number of questions about retail advertising strategies, especially during the holiday season. So I thought I would share with you a bit of a preview about my views on this subject.
My opinion is that retailers have always put too much emphasis on price/item advertising and not enough on telling their brand story. Not that there isn’t a place for promoting special purchase opportunities – especially during the money madness of the holiday shopping season. But before you build a house, you need a foundation. When it comes to retail marketing, that foundation is the retailer’s brand. Many stores sell many of the same products as their competitors. Why should the consumer choose one store over another? And WHY is the operative word here. Not every retailer has the kind of buying power or operational efficiencies to be the consistent low cost leader. So customers need to be given a compelling reason to shop with a retailer who may not offer the lowest price. The WHY is what differentiates one retail brand from its competitors.
Perhaps the most universally relatable example is Nordstrom. Nordstrom is big. Big enough to have enormous buying power. But they have never been perceived as a low cost leader. Rather their brand story is about the customer experience. Nordstrom personifies the old adage that the customer is always right. So whatever it takes to please the customer, Nordstrom is typically willing to do it.
Smaller retailers need to create their own WHY. On Black Friday, we did some shopping in the small towns of northern Michigan. The retailers we visited reported very strong sales. Yes, they offered some pretty good deals, but it was mostly about the unique products they offered and the very intimate personal experience they delivered. It was fun to be in these stores. One little town made Black Friday a pajama party. Others served a variety of wonderful refreshments. By contrast, I doubt many people would describe fighting over bargain items at big box stores during Black Friday as “fun” (except for those who get an adrenaline rush from snagging what they consider an exceptional bargain.) That’s not me.
And that leads me to my second point. This may seem like Marketing 101 but a retail brand needs to know and understand its customers. Demographics are part of the equation but stereotyping customers by age or gender is dangerous. We tend to assume Millennials prefer shopping online to traditional brick and mortar stores. Guess what? Even though Black Friday sales were off some 14 percent overall from last year, 18-34 years olds were at the forefront of activity at traditional retail stores. In fact, 61 percent of Millennials say they prefer to shop in-store.
I believe customer knowledge based on lifestyle characteristics is far more important than traditional age/gender demographics. Like I said, some people get high on snagging a bargain. Some like to be pampered or recognized for their loyalty. And others just want their retail experiences to be quick, simple and convenient.
Retail marketing is about connecting the dots – between the store brand and its customers’ wants and needs. It’s not rocket science. But it does require an educated approach and a lot of homework.
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Editor’s note: The episode of WNIT’s Economic Outlook mentioned in this article is scheduled to air first at 8:30 p.m. Friday, December 4 and will be re-broadcast several times later in the week.
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