And the answer is…

eLUXURY!

Many retailers have offered substantial discounts not only in preparation for the holiday crunch, but also in order to be considerate of tightened purse strings due to the recent economic downturn. eLUXURY has managed to promote their holiday sale while maintaing a high-end image which defines the brand. Do you think eLUXURY was successful in their endeavor?

Counterpoint: Despite the current economic crisis, marketers should not bombard their customers with more “doom-and-gloom” scenarios, especially high-end businesses that risk diluting their brand with lower-end offers.

Ben’s first point is exactly correct – everyone knows the challenges facing their consumers right now, and consumers are well aware of the need to save money, which is why, in my opinion, there is no need to add to the gloom by reminding them of tough times. In fact, relying on bad news to sell a product and identifying with the recession can significantly devalue a brand’s image and long-term revenue. 

Don’t get me wrong – for the retailers who make deep discounting and penny saving a major focus of their typical marketing plan, by all means, carry-on! But for luxury brands, high-end retailers and thousands of other businesses who have based their entire messaging strategy around high standards of excellence and exclusive sales and specials, don’t compromise your entire communication plan for something as unstable as the current state of our economy.

Don’t Mention the R-Word, a great piece written by Tatyana Shumsky of BER Business Times last month, proved this point to a great extent by using one of Allstate’s ad campaigns as an example, concluding that, “Brands like Allstate are built around quality and prestige stand to damage their brand value with advertising that shifts their positioning closer to the discount products in the same category.”

Take De Beers for example. As a high-end retailer with an esteemed reputation to uphold, they’re doing exactly what’s best for their brand. The multi-channel diamond jeweler has more than doubled its U.S. consumer marketing budget for the holiday season in response to the credit crisis, according to Women’s Wear Daily and the National Jeweler Network. 

“There will still be a Christmas,” said Claudia Rose, senior partner at the DPS. “Millions of men will still buy diamond jewelry…This is an unprecedented campaign for unprecedented times.” 

I also commend food marketers such as Kellogg’s for keeping their advertising light and positive, with a clear goal in mind. Lately, Kellogg’s has focused on advertising for staple cereals such as Corn Flakes, while Campbell Soup Co. is launching a campaign for its condensed soups. The ads successfully communicate that the featured products are inexpensive without using negativity, fear, or the words “recession” and “economy.”

Lastly, we can’t forget about the value of escapism in adversiting. For example, look at travel campaigns such as Tourism Australia – which reminds consumers how unimportant the stresses of everyday life can be, and how the Australia experience can provide the “catalyst for rejuvination.” Marketers should follow in suit and shift focus towards what’s important in life – friends, family, and spiritual well-being.

As marketers, it’s our job to make the most of any situation and keep our messaging consistent. Everyone knows about the downturn our economy is experiencing; there is no need to remind them.

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.