When everyone’s in sale, no-one is. It simply means the market has reset the prices that consumers expect to pay. So I was interested in this interview with retail specialist Jim Lucas of Draft FCB about how businesses should approach recessive times. Here are my key out-takes from his interview:
The lack of decline in small luxuries such as skincare and animal treats is a clear sign that shoppers will hold on to a handful of indulgences in their everyday lives just to feel normal. The secret is to scan for those opportunities in their changing behaviours.
Rather than focus on the big ticket buys, look for little pleasures. Lucas says marketing is about trying to change behaviour, and a recession is a strong backdrop for that. “’You need to think of creating behaviours or new forms of regimen or rituals or routines that are going to fit into this new era.” That means, for example, calling for smaller actions: paint a wall, rather than repaint the house.
Continued discounting will simply make some categories unprofitable, and not just that, it will cement in those price expectations. Goes to my point earlier.
Finally, Lucas says, the rise of private labels is a sure sign of brands failing to communicate their points of difference. If that’s happening in your sector, it’s a sign that consumers either don’t value quality or regard it as ubiquitous. Changing that requires shifting what they value rather than just the value itself.
Incidentally – one of my rules from when I worked in direct marketing was that it was always better to give than to lose. I always used to try and keep prices up by giving consumers more product(s) for the same amount rather than the same product for less cost. Oh, and make that “extra something” a little treat if you can – for the reasons Lucas outlined above.