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Your Slip Is Showing!

Barry Urquhart suggests ways to stay afloat as real sales continue to slip.

Oops! We’ve slipped… and it shows.

The global financial turmoil and resultant downturn in the business environment and retail sales have had countless consequences. Among them is a regression in many retailing, promotion, advertising and merchandising practises. Sadly for some, the standards have slipped to the very basic.

Emotions, a sense of theatre, innovation and fun have been removed, or at best, minimised. Their respective roles and importance have been discounted. Standards have definitely slipped. They too have now been discounted.

Many brands, including those of retail outlets, products and services have been compromised and damaged. It will be difficult to reconstitute full recommended retail prices in future, without considerable leakages in demand.

During the peak Christmas trading period of 2008, the A$10.4 billion Australia Federal Government stimulus package was complemented by increased, price oriented advertising with offers of up to 70 percent off retail prices. It seemed to work… in the short term. After a slow start, national December retail sales recorded a 3.4 percent increase. The tipping point appeared to be December 8, the date on which the first of the cheques and bank account credits arrived from the Federal Government. Little consideration has given to the bottom line.

Electrical appliance retailers rushed to the media declaring their support and endorsement of the political initiative. The same individuals and businesses announced store closures, staff dismissals and retrenchments during January.

One disturbing aspect of the high pre- and post-Christmas retail sales was the fact that a relatively large percentage of the transactions were people who were not recipients of the Federal Government stimulus package. The same people had planned such purchases during the course of the 2009 calendar year, but had rescheduled their buying because of the compelling appeal of the huge discounts which were on offer.

Thus, the Christmas period receipts reflected a rescheduling of many planned purchases rather than the generation of new sales.

This begs the question: What does the period April to August hold for the broader Australian retail sector?

The Camera Doesn’t Lie

A photographic survey of retail practices in metropolitan Sydney, Melbourne and Perth during February 2009 enabled these consultants to conclude that the widespread poor merchandising displays were making a greater contribution to spasmodic and declining consumer store traffic and retail sales than the impact of the prevailing financial turmoil. Overall, standards have not improved in some three decades.

The conclusions need not reflect the capabilities and skills of in-company and manufacturer merchandisers. Rather, what are specifics of the briefs and the key performance indicators which are being applied by senior management teams?

The visual evidence is compelling. That is not to suggest that the premises were not clean, well lit or well stocked. They were. The cleanliness was sterile. So too were many of the shopping ambiences
and displays.

Marketing 101 Lives

All of the fundamentals of the marketing discipline persist. At all times emphasis should be given to “advantages” and “benefits”. These project emotion, inspire action and fulfil desires.

Features provide the rationalisation and justification of the purchase decisions which have been determined by consumers who have advanced to that final phase of the buying process. In absolute and relative terms they represent a small percentage of the market potential.

Thus, much potential is currently being forsaken because of common basic practises which are being displayed in pursuit of the important but superficial “false God”, cash flow.

Appealing Allternatives

Advertising, regardless of the media utilised (including television, radio, print, poster, email, direct mail, coupons and loyalty programmes), can and should be enhanced by three keywords which research has established resonate with consumers, stimulate interest, generate additional store traffic and are the catalysts for greater sales and profits.

Sadly, analyses of the current and recent advertising campaigns of major electrical appliance retailers reveal many do not include those key triggers.

The Right Setting

A positive and appealing store ambience and a good shopping experience have become established imperatives for sustainable, successful retailers.

Integral to both is the astute deployment of the six dimensions of creative and effective merchandising.

A seeming, current overemphasis on the aspect of “visual” limits potential and actual sales. Consumers consider static displays boring. The employment and deployment of other sensory factors in displays can and will stimulate interest, sales and satisfaction.

Dare To Be Different

All businesses regardless of sector and discipline, have the potential for and possibly the need to be different. A long record of success suggests that electrical appliance retail professionals, like many others, have the skills, experience and expertise to change and to benefit from a new approach to communicating with, educating, inspiring and influencing existing, future and past clients.

In seeking the “right” answer, it is important to ask the right question. A tight focus on cash flow and discounting may not be the answer, or the appropriate leading question.

ABOUT THE AUTHOR

Barry Urquhart is Managing Director of Marketing Focus (www.marketingfocus.net.au), Perth. He is an internationally recognised conference keynote speaker, author and business analyst. His new conference topic and management development workshop focus on the need for and nature of effective corporate culture change and is titled: “Fantasise, Strategise, Optimise.”