Business as usual?

I expect that a good many retailers reading this blog will disagree. To those that do, this is just one man’s opinion and I welcome the disagreement.

In my hometown, I closely follow the marketing and sales promotional efforts of the various furniture retailers that compete in the market. In recent months, I have been struck by one interesting observation. That is, to most retailers in the community in which I live, it seems to be, “Business as Usual”.

I have no doubt that each and every retailer recognizes that there is a full-blown recession going on. If nothing else, they can surely see it in their sales numbers. But, there seems to be little acknowledgment of the dramatic slowdown in their marketing efforts. Many are merchandising and marketing as they have for the past however many years, with little difference to their approaches. It is the same “Midnight” or “Six Hour” Sale. The same “No, No, No” financing. “Free” furniture that’s not really free. Many of the same tired promotional efforts that were worn out before the recession reared it’s ugly head. Certainly, to suggest that every retailer is devoid of creativity during this period would obviously be wrong. But, many are presenting their businesses as if nothing has changed.

One might argue that to signal that business is bad and that the company is hurting would be an egregious error; that it might somehow send customers away. To that, I would suggest that a retailer might create an effective strategy that does not imply anything of the sort but does address the change in the economic invironment.

Retailers in other industries are modifying some of their practices in order to fill needs or perceptions of their potential customers. During the holiday season, many general merchandise retailers reinstituted a “Layaway” option. Probably a pain operationally, but a service that consumers wanted, nonetheless. This is not the time to allow even one potential customer to walk away or worse go to a competitor. Some automobile dealers are at this very moment, offering their customers the option of returning their automobile purchase if the consumer finds him/herself strapped financially in the coming year. This type of offer would have been unheard of even a year ago but today it makes sense because consumers are nervous about their own economic situations.

At its most basic level, sales are well down in many furniture showrooms for one or more of five reasons:

1. Jobs have been lost and along with those jobs any discretionary income is gone as well. This income is what rang the cash registers.

2. Consumers are insecure about keeping their jobs and aren’t making purchases that they may not be able to pay for.

3. With the financial meltdown, many consumers have lost value and/or income from their investments that heretofore would have paid for their purchases.

4. There are potential buyers that are simply unsure and nervous about the economic outlook in general.

5. Consumer credit is becoming harder to obtain.

I believe it to be incumbent upon retailers to recognize and react to the economy as it is, not as it was. This means, perhaps, making decisions that might not have been warranted just one or two years ago. It means keeping an open mind, getting creative, and considering new options. In her blogs on this web site, Leslie Carothers often has new and exciting options with regard to the best and most effective use of the Internet for marketing purposes. Much of marketing today is (or should be) about finding and using the most cost effective, efficient ways to reach potential customers as well as being in-tune to and servicing their needs.

Here is an idea: If, indeed, there are potential consumers out there that might be enticed to buy were it not for their fear of losing there jobs, why not find a way to offer the following:

6 Months Now / 6 Months Later!

XYZ Furniture Store Gets It.
We understand that these are unsure times and we want to help!

Buy now and get 6 months interest and payments free on your purchase. Then, if at any time during the term of your loan you feel the need, you may suspend your payments (interest, too?) for an additional 6 months.

Obviously, the details and wording might change but the message is clear. (If you are unsure of your situation, going forward this might make you more comfortable about making a new purchase.) Basically, still a NO, NO, NO promotion with a twist and applicable to today’s economic environment.

My suggestion then, is to add relevance to marketing efforts that is meaningful to the here and now. I am NOT suggesting eliminating all of the old tactics and strategies that may still work. I AM proposing replacing those that are no longer effective with messages that might strike a chord with customers in the market today.

I would be very interested in other strategies and tactics that may have proven effective and relevant to the market today from any interested readers that would like to comment to this blog. If I can be of any service to your company, please contact me at jim@furnitureindustry101.com.