Manufacturers, retailers and consumer goods and services brands are probably taking a good, hard look at the behavior of the U.S. consumer. After all, what goes up eventually comes down – – and, we’re in the midst of the longest economic expansion since the Great Depression of 1929, but also one of the slowest.
Among their likely questions are: Is the U.S. economy heading into a recession, or will auto loans or student loans choke off sales as the mortgage crisis did? Will the current expansion just lose steam? It’s already described by many economists as being in a malaise. And, when things inevitably slow up, how do you find competitive advantage to grow, sustain and stage your business for the next round of positive economic conditions?
According to Bloomberg , the prospects of a U.S. recession next year are low – estimated at just 27 percent. Still, what lingers could be worse: a forever-changed economic landscape that completely alters the habits of U.S. consumers.
Examples from retail
“Ruin porn,” an off-color name associated with mostly online images of abandoned retail and office structures has captured the attention of thrill-seekers, the curious and even the nostalgic. Viewers gawk and shake their heads at ghostly images of the once-bustling malls, shopping plazas and factories that today look like staged sets of low-rate horror films: headless mannequins, dust-covered smiling Christmas elves, molded tiles of a once-grand mall fountain, all amid trees and vines that have sprouted up through the floor and stretch to the ceilings.
Not as drastic but just as telling are nation-wide closures and significant pull-backs of major retail chains. Stories of Sears and Blockbuster come to mind. Both are examples of retail giants that, perhaps, many thought would never fall.
Online shopping, declines in relative household income and discretionary spending, wage stagnation, an ever-shrinking American middle class and global market uncertainties have all been blamed for the so-called “retail apocalypse” that saw brick-and-mortar stores fall like dominoes across the country in the last decade.
It’s the rare business that will initially respond to such news optimistically. Nonetheless . . . herein lies some real opportunity.
Run to Danger
Despite the market uncertainty, the smart marketer will find and exploit the openings that current circumstances create. As some competitors pull back or exit, the opportunity exists to speak more loudly and directly to current and prospective customers.
Following are nine suggestions for marketing smart during weak economic conditions – or, when your competitors expect one.
- Double all efforts to make sure everything is done right for existing customers. Until the current customers are as secure as you can make them, forget about going on fishing expeditions for new ones. PROTECT THE BASE: a weak economy is no place to make mistakes with current customers.
- Protect your primary resource – employees. This may also be a time to recruit; fewer employers will be and slower job growth or layoffs will put more candidates in market. This is the time to fill vacancies and upgrade staff capability, while others lay low or even lay off workers. No shame in poaching here!
- Offer new ways for the customer to pay. The advent of so many digital payment platforms, online ordering and delivery services could be a godsend for retailers looking to insulate or even to grow revenue.
- Work with suppliers to keep their production costs low. In turn, this could lower or stabilize your costs. Some ways to do this include bulk orders in return for price discounts, making efforts to build better rapport, and letting your suppliers know you’re in it for the long haul – despite current economic conditions.
- Market with partners. Look for ways to develop co-promotions with other businesses. Piggyback on existing events that will be supported with someone else’s advertising and that expose you to a broader audience, often for less than you could “speak” to your previous target group alone.
- Don’t redesign ads or collateral material unless absolutely necessary. You’ll tire of the ads long before the market will. Keep production costs to a minimum, drive dollars into delivering more impressions – – remember shoppers may be more reluctant to spend and thus may need more encouragement.
- If you must cut ad spending, use research data to reduce cost per impression, before reducing total impressions. For instance, social media advertising has gotten much more sophisticated at helping to direct messages to narrowly defined targets, often for pennies on the dollar.
- NEVER cut across the board. Each marketing step has a unique role and function. Think baby and bath water: Both are involved in the evening ritual, but that’s where the similarity ends. CUT FIRST, where you are certain waste is eliminated. If you look, you’ll find it. Start there!
- Pay more attention to public relations opportunities. Editorial space is free, but it takes hard work to come up with newsworthy material. Work with your marketing staff to vet newsworthy ideas and story angles.
On a more optimistic note, change isn’t always for the worse. The new economy is also making way for new, innovative ways to reach customers. For instance, Amazon is opening a fulfillment center in long-abandoned Randall Park Mall (pictured) in suburban Cleveland – whose dilapidated structure also made the “ruin porn” archives.
No matter how drastic the shift in the economy, best practices are to FIRST market smart and save marketing cuts for last. Of course, examine every expenditure and be sure you need to make it, but don’t throw out the baby with the bath water. If you disappear from the scene, your customers may, too.