From the mouths of retailers

Following on neatly from our piece on M&S's Penny Bazaar initiative, a new survey of over 350 large and medium-sized retailers by The Centre for Retail Research has piqued our interest. It suggests that UK consumers are increasingly unwilling to pay full price for, well, just about anything.

• 66% of the retailers surveyed felt that consumer expectations have changed so much that larger price cuts are required to achieve an uplift in sales
• 33.2% reported that consumers are only buying discounted goods
  
• 32.4% believed that consumers are making greater use of money-off vouchers
  
• 23% said they have reduced all prices
  
• 39% have already implemented significant targeted price cuts

Clearly, consumers now see bargains as the norm rather than the exception, which throws up some pretty big decisions for marketeers. Received wisdom from past recessions teaches us that reactive discounting will only temporarily solve the problem of declining profits. In his book 'Advertising in a Recession', Patrick Barwise points out:

"While it is generally accepted that promotions generate short-term sales, some of those sales are simply 'stolen' from future purchases by the same consumer...If a brand is on 'special' price too frequently, consumers are likely to think of the 'special' price as the normal price for the brand - and learn never to buy the brand unless it is discounted."

But as we are learning, this is no ordinary recession so maybe it's time to re-write the rules?

Our view is that in a bid to demonstrate value, marketeers all too often focus on price. Value is as much about quality as it is about price. Maybe now is the time to blaze your own trail and communicate your quality credentials instead?

M&S invites customers to spend a penny

Today sees Marks and Spencer get in on the nostalgia trend and return to its Penny Bazaar roots. The British institution is celebrating its 125th birthday by offering customers the opportunity to snap up 2 million specially commissioned items, ranging from socks to cufflinks, for the princely sum of 1p.

Every penny earned will be donated to the M&S 125 Charity Challenge, which raises money for local and regional charities across the country. Stuart Rose, the company's executive chairman, said: "It's been a tough year for us all but people are fed up with being fed up and we wanted to give our customers a real treat."

This is a smart move from M&S, and one that is clearly founded in 'real world' consumer insight. It acknowledges the fact that we are all seeking comfort in the past, as well as giving something back - both to charity and the consumer. Everyone's a winner, not least of all M&S itself.

The amount of free publicity generated will mean that the event has probably paid for itself. Not only has it made headline news, but it's also being discussed on money-saving sites across the country, as well as high fashion and marketing blogs.

Check out the TV ad here:

Survival of the Fastest

If you're seeking some fresh insight on recessionary marketing, check out 'Survival of the Fastest' - a new YouTube channel from the unholy trinity of the London Business School, the Daily Telegraph and Google.

It provides pearls of wisdom from the UK's foremost business brains on everything from: "how has consumer behaviour changed from the last downturn?" to "how should I balance my online and offline spend?" - all presented in handy, bite-sized video clips.

A neat way to enliven grey, bleak, recession-themed presentations.

Here's a taster from the homepage:

Thinking Is Free

Here's a nice piece of simplistic brand strategy to steer your brand through the downturn from Jamey Aiken for Neutron. (He did title it 'Thinking is Free' so I'm sure he won't mind us taking him at his word and sharing it with the world.)

The stock market is spiraling downwards. Large institutions are looking for handouts. Corporations are cutting head counts. Budgets are slashed to the bone. Time to huddle in the basement?

Not if you want to thrive in the next economy.

If your strategy for surviving the recession is to hunker down and try harder, you don’t have a strategy. You have a bomb shelter. And a bomb shelter won’t save you from the fundamental changes shaking the business world—namely, unprecedented speed and overwhelming choice. When customers have nearly unlimited options and competitors play a perpetual game of leapfrog, the only real barrier to competition is brand strategy.

Brand strategy is really just a way of thinking about business. And since thinking is virtually free, it requires little in the way of special funding. Here are four questions to help you work through the recession, along with a simple chart to start the conversation among your team.

1. What makes you different? The active ingredient in any brand is differentiation. If it’s not different, it’s not strategic. What can you do to increase your difference? How can you make your difference more meaningful and compelling?

2. How well are you focused? Without focus, customers will have a hard time seeing your difference. What makes you the “only” in your category? Which of your offerings best support your difference? Which should be cut to make your focus stronger? What new offerings could be added as you pick up momentum?

3. What trend are you riding? Tomorrow’s economy will create new trends. What wave are you riding? Is it a wave that’s still forming, or one that’s already crashed on the shore? Is it possible to ride more than one trend at a time? What new trends are barely visible yet inevitable?

4. Are you communicating clearly? Good strategy paired with poor messaging is no better than poor strategy. What messages are your various constituents hearing from you? Do all your brand stories add up to one big story? Is your big story clear enough and bold enough to earn a place in their minds?

If you can respond to these four questions in a compelling manner, you’ll not only survive the recession, but be in a stronger market position when the dust settles. All it takes is the right kind of thinking."

Thanks to our lovely friends at ftmf for the tip off.

Daddy, what did YOU do in the Recession?

We've already blogged about how a little goodwill can go a long way in these straitened times.

Here are some nice examples of brands putting this into action:

Kraft has been offering literal warmth and fuzziness in the form of heating bus shelters and giving away free soup samples in the Windy City.

Also in the US, FedEx has made the grand gesture of allowing customers to print off up to 25 copies of their CVs for free - at any of its 1,600 stores across the US.

Hyundai US has bucked the trend for car manufacturers to lure in new custom by offering 0% finance deals (i.e. what got us into this mess in the first place!) with its aptly-named 'Assurance' programme. The promise? If you lose your job after buying a new Hyundai, you can simply walk away from your loan or lease and return the car to Hyundai. The programme launched in January and so far, Hyundai has recorded an increase of nearly 5% YOY (versus overall US car sales which are down 40% YOY).

Meanwhile in the UK, Tango has shown that manners cost nothing by launching a limited edition can replacing their "Tango" logo with the word "Thanks". Why? Simply to "thank the public for saving the brand" by responding to the "Save Tango" campaign in their droves and boosting sales by 8%.

What could your brand be doing to shore up a little goodwill?

The lost art of kindness

I’d like to share with you a truly brilliant essay published in the Guardian Review dated Saturday 3rd January.

http://www.guardian.co.uk/books/2009/jan/03/society-politics

The article runs to some nine pages so allow me to summarise: kindness is dead.

Adam Phillips and Barbara Taylor (just Taylor, not Bradford) put it much more eloquently:

“Most people appear to believe that deep down they (and other people) are mad, bad and dangerous to know; that as a species - apparently unlike other species of animal - we are deeply and fundamentally antagonistic to each other, that our motives are utterly self-seeking and that our sympathies are forms of self-protectiveness.

Kindness - not sexuality, not violence, not money - has become our forbidden pleasure. In one sense kindness is always hazardous because it is based on a susceptibility to others, a capacity to identify with their pleasures and sufferings. Putting oneself in someone else's shoes, as the saying goes, can be very uncomfortable. But if the pleasures of kindness - like all the greatest human pleasures - are inherently perilous, they are none the less some of the most satisfying we possess.”

I believe there is a learning herein for, believe it or not, brands. Yes, brands - the very pillars of capitalism. The economic downturn represents a great opportunity for brands to show some compassion and understanding for their consumers (and store up some goodwill while they’re at it).

‘Nichetributes’ are a great example of how they could do this. The brilliant http://www.trendwatching.com/ coined the term, which denotes attributes/features/additions to existing products, making them more attractive to specific user groups, while at the same time signalling to those users that the brand ‘gets’ it, that it cares. For consumers, anything practical and useful will go down well in these leaner times, while anything that speaks their language will be reciprocated with appreciation and goodwill.

N.B. This trend is NOT about tailoring your advertising message; it IS about tailoring your product.

So, there you have it. Be kinder. If there’s a better New Year’s resolution out there, I’ve yet to hear it. NG