Nov 18 2008
Point/Counterpoint: Should We Go Frugal?
Every so often, Ben and Erin disagree on approaches to email marketing and need to put their respective thoughts down on paper. Who do you think has a more valid point?
Point: As marketers face the current economic crisis, now is the time to start stressing the concepts of value, frugality, and smart purchases in your email campaigns.
Everyone knows the challenges facing their customers right now — shrinking consumer confidence against a backdrop of global economic uncertainty — so why pretend it’s not an issue? Let’s face it: things are really crazy out there in the real world. Record declines in retail sales! Shrinking home values! The end of TRL on MTV! Spam is on the rise! (the edible kind, at least) Dogs and cats, living together…mass hysteria!
Ok, well maybe that last one came from the 1984 movie Ghostbusters, but many of these fears are in fact justified.
Marketers must now switch gears and address the current market conditions or risk being left frozen just like the current credit markets. Stephanie Clifford and Stuart Elliot’s recent New York Times article, “Goodbye Seduction, Hello Coupons” perfectly sums up the situation:
As the economy rapidly deteriorates from flourishing to floundering, marketers are scrambling to remake their advertising so products seem affordable and sensible rather than indulgent and fabulous. For many big marketers, including automakers, retailers, consumer product companies and even financial services, a major shift in consumer psychology spells an end to the aspirational advertising that has dominated their campaigns for the last decade.
Many email marketers have already begun incorporating the frugality concept into their campaigns. Recently, The Container Store sent an email giving cool, DIY gift ideas for the Holidays that won’t break the bank. Technology retailer Newegg.com recently advertised “Gift-able, practical, expensive-looking” (but low-priced) gadgets for sale. Steve Madden had an email recently “Calling all ‘recessionistas’” to save with a discount coupon.
Everyone knows what consumers are facing out there, and it’s the job of marketers to address those fears, respond to common needs, and provide helpful solutions and suggestions in order to better serve the customer.
Addendum: This article in the New York Times makes it even clearer: “On Fifth Avenue, the Discounts Arrive Early”
But retailers and those who watch the industry say it is particularly noteworthy to see so much red along Fifth Avenue, where sales are usually confined to the back of the store, not brazenly broadcast from windows.
Even the more luxurious stops, among them nearby Bloomingdale’s, Bergdorf Goodman and Salvatore Ferragamo, are discreetly cutting prices, or are about to.
Ben and Erin,
Great post, but I think one critical component in all of this is the fact that not all retailers should stress frugality. Think about it, if you got an email from Saks or Nordstrom stressing their low low prices or even touting a $19.99 pair of jeans, it would make you go huh?
All for the frugality aspect of things, but I think brands who have established reputations have to worry a bit more of they want to be perceived in the marketplace long term.
Great blog by the way.
I absolutely agree Andrew! Identifying with the recession can significantly devalue a brand’s image and long-term revenue.
And, for the countless number of businesses who have based their entire messaging strategy around high standards of excellence and exclusive sales and specials, it would be a huge mistake to compromise their entire marketing plan for something so prone to change as the state of our economy.
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I’m not saying all brands should just slash prices, but at some point or another, even luxury brands must need to look at changing tactics. Keep in mind, many of these brands have worked hard to expand their markets over the past few years by offering “aspirational” customers little keepsakes like fragrances and keychains, or lower priced handbags. The thinking behind this has been that even if the young customer can’t yet afford the $3000 dress, they can still “buy the brand” and aspire to make larger purchases further down the line. These brands are either going to kiss their low-value/high-potential customers (and future profits) goodbye, or have to get resourceful and figure out how to retain them.