Recession and the rise of multichannel mean times are changing, and retailers’ marketing messages must respond or stores risk losing out
How are retail marketing chiefs adapting to the downturn? And how is their role changing as multichannel retail grows in importance?

These were two of the big questions asked at last week’s Retail Week Marketing Directors dinner, hosted by Yahoo!. Facilitated by Tesco.com marketing director Ian Crook, fellow participants included Debenhams, Mothercare, 99p Stores and Disney.

One thing’s for certain: creating marketing campaigns for consumers who have a totally different mindset to that of a year ago is no straightforward task. As 99p Stores commercial director Hussein Lalani said: “Adapting to the downturn is a challenge because we need to be fluid. Everyone has to be very alert to any changes in direction in order to respond to customers’ needs.”

Ultimately, the group agreed that marketing in the present economic climate requires retail teams to think differently about how to use low-cost or free channels to talk to customers. And this is why online has perhaps never been more crucial. Yahoo! category retail director Nicola Ibberson said: “Retailers are realising the power of it and are realising how to use it to benefit their brands in so many different ways. It enables retailers to do so much more in terms of customer engagement, and it can totally enhance the customer experience.”

She added that online marketing channels provide a cost-effective, highly accountable and highly targeted form of communication. All those at the event agreed it is a vital medium whether their customers use retail websites, stores or both. Debenhams marketing director Ali Jones said: “Customers shouldn’t be siloed.”

Inevitably, consumer behaviour is changing, and the issue of how to adapt marketing campaigns accordingly is crucial. Lalani said: “Shoppers are becoming more selective. We’re clearly a value retailer, but we’re having to push that message even harder.”

Tesco has already revealed how customers are doing more frequent but smaller shopping trips. But while this doesn’t lend itself to online grocery shopping because of the delivery charges, some shoppers are turning to the web more because it enables them to be strict with themselves about what they buy and avoid impulse purchases.

Notably, though, Debenhams’ strong sales for its Designers and enhanced own-label ranges suggest price is not the only factor that matters to consumers. Some members of the panel agreed that what was described as “the disposable culture”, where the durability of products ceases to be an issue as long as they are cheap, is now on the wane. Jones said: “It’s about a combination of price, quality and design is extremely important so you give customers the best value for money on the high street. It’s not necessarily the cheapest ranges that are the best-selling ranges.”

The group also agreed that aspirational marketing is out – ads now need to show exactly what benefit a product brings, as demonstrated by the Apple iPhone, the ads for which clearly focus on the product’s numerous functions.

Looking ahead, retailers are starting to explore the opportunities social networking presents, allowing them to build closer relationships with customers. Yahoo! Europe vice-president of marketing Kristof Fahy pointed to Mothercare’s Gurgle.com as an example of how retailers are using social networking to benefit their brand. “You can use your websites not just to showcase products but to showcase information. Mothercare have created an invaluable tool for customers that they could only do online.”

However, the feeling around the table was that while social networking does present opportunities, particularly to brands catering for a younger demographic, generally it is something consumers use to escape from corporate messages, and that attempting to exploit it will be challenging.

Today’s customer is an ever more demanding one. Shoppers are less loyal to brands than they ever have been and so retailers are having to work increasingly hard to attract and retain them.

Communicating with customers and understanding their needs will require a detailed and complex understanding of their individual likes and needs. It is a huge challenge, but one that retailers such as Tesco, through its Clubcard loyalty scheme, are showing is possible to meet. And as Jones concluded: “It’s a challenge but it’s also an opportunity.”

Article RetailWeek