The 0.3% Solution

In good times or bad, a customer database is a license to do business.

Hub, December 8, 2008 — Research indicates that during the last two recessions (1990-91 and 2000-01), growth in every retail sector slowed. According to the McKinsey Quarterly, 93 percent of retailers surveyed experienced slowing revenue growth in one of the recessions and 59 percent found it true in both.

Unfortunately, it also takes retailers longer to benefit from the turnaround when it does happen. The average retail growth rate in the year of recovery in both 1991 and 2001 was just 0.3 percent.

Most of us start to hunker down and take a defensive approach to a recession. Obviously cutting costs where possible is common sense. But when it comes to marketing at retail, cutting back is a self-fulfilling prophecy to 0.3 growth.

During previous recessions, advertising,... continue reading

Survey: Wal-Mart Among Best 'Value' Brands†

YouGovPolimetrix places AIG at bottom of insurance heap

Adweek, November 4, 2008 — A recent survey by YouGovPolimetrix revealed that the slumping economy is having a significant impact on how consumers perceive brand value. Budget brands like Wal-Mart and Old Navy were ranked highest by consumers, while more upscale brands and financial services firms ranked lowest, reflecting a loss of consumer confidence.

An Old Buzzword Is Back: Bargains

New York Times, October 24, 2008 — As the year began, consumers started to see a trickle of advertisements that played up brand value rather than attributes like status or prestige. As the economy worsened in the spring and summer, the trickle became a torrent.

Now, as the crisis in finance continues, a veritable tidal wave of ads devoted to saving money is washing over the country.

Marketing textbooks suggest, however, that a focus in the short term on pinching pennies could in the long run have a deleterious effect on the images of brands or products by cheapening them.

Study: Coke Is Most Talked About Brand in America†

Brandweek, October 23, 2008 — According to a new study released by the Keller Fay Group, Coca-Cola is currently the most talked about brand in America. The ranking was drawn from 25,142 consumer conversations conducted between January and August 2008.

Its chief cola rival, Pepsi, came in fourth place, right behind AT&T (2) and Verizon (3). The findings come from Keller Fay Group's TalkTrack analysis, which examines word-of-mouth conversations held both on and offline. This is the first time the data has been broken down as such.

While technology, telecommunications and automotive dominated the top 20, packaged goods and retail companies accounted for 32% of all word-of-mouth conversations.

Thriftiness on Special in Aisle 5

New York Times, October 14, 2008 — While it might seem counterintuitive for stores to teach shoppers to cut their spending, several chains have concluded that providing such knowledge can spur loyalty and keep customers from trading down to cheaper competitors.

So the Stop & Shop grocery chain is offering “affordable food summits” where consumers are taught how to lower their grocery bills. Home Depot offers classes on how to cut energy bills. And Wal-Mart Stores hired a “family financial expert” who has used online chats to teach several thousand shoppers how to save money for college, whittle away debt and sell a house.

The retailers say their advice is neutral, not specific to any store — but they are always careful to point out money-saving items that their stores carry. The... continue reading

Why Some Brands Cheer a Sour Economy†

Brandweek, October 12, 2008 — It is a good time to be McCormick spices. While not the sexiest of brands, "The taste you trust" is positioned extremely well for an economy that looks to be in a recession.

While many companies are suffering at the hands of one of the worst economic downfalls in the history of the country, others are quietly prospering.

"If you're a brand you eat, drink, smoke or wash yourself with, you're going to be OK," said Marc Babej, partner at the strategy firm Reason, New York.

"During tough times we typically point to certain categories/sectors," said William Madway, marketing professor at the Villanova School of Business. . . . [Still], every brand has the potential to be successful if they adapt to the economic realities."

Home Depot Learns to Go Local†

Uniform Approach Didn't Cut It; Unsold Mowers in Arizona, Too Few Power Tools Out West

Wall Street Journal, October 7, 2008 — Shortly after taking command of Home Depot Inc. in early 2007, Frank Blake found a pyramid of riding lawn mowers outside a store in Arizona, where lush lawns are uncommon. It turned out the store had sold only one such mower in two years. Then, he learned that the retailer was chronically short of Makita power tools on the West Coast, where they sell particularly well.

Mr. Blake ordered changes in Home Depot's purchasing system, which had favored national uniformity at the expense of local customer preferences... The shift in Home Depot's buying patterns highlights a tricky problem for national retailers: balancing local demand with national efficiency. In Home Depot's case, the new, more targeted buying has helped lower merchandise costs by reducing... continue reading

Wal-Mart Grinning Big Through the Tough Times†

Sales, Margins and Stock Price All Up -- but What's the Reason Behind the Marketing and Merchandising Miracle?

Advertising Age, October 6, 2008 — Looking for a silver lining in the economy? It's shining brightly from Bentonville, Ark.

Same-store-sales growth for Wal-Mart Stores is well ahead of dismal levels a year ago. Amazingly, Wal-Mart's margins are up too. And the stock has soared more than 30% in the past year, trading at levels not seen since the turn of the millennium, providing hope that CEO Lee Scott can avoid a net loss during his reign. Wal-Mart has become a popular defensive buy for investors and consumers alike.

The big question: Is Wal-Mart's recent run of improved results more about the marketing or the economy? Most signs point to the economy, though economic distress has dovetailed nicely with the marketing.

"Cart Before the Horse" Marketing? Neigh!

Prophet, September 1, 2008 — For all the great marketers and marketing in the world, we still see too many instances of those who put the cart (or tactics) before the horse (or the need to meet critical customer needs) — and, as a result, strategies and initiatives that fail to make the finish line.

Woman to Woman, Online

New York Times, August 14, 2008 — Heather Armstrong’s wickedly funny blog about motherhood, Dooce, is more than just an outlet for the creativity and frustrations of a modern mother. The site, chock full of advertising, is a moneymaking machine — so much so that Ms. Armstrong and her husband have both quit their regular jobs.