Retailers Feeling Our Pain

Discussion
Nov 13, 2008

By George
Anderson

Recently
retailers have been going out of their way to let their shoppers know that
they understand how tough it is out there. Most, by now, have offered various
forms of sales assistance and only time will tell if they have been successful
in capturing a greater share of shopper dollars along with their offers
of help.

Last week, Wegmans announced
it was cutting prices on products across the store. Danny Wegman,
chief executive officer, and Colleen Wegman, president, said in a joint statement, “These
are uncertain times. We know our employees and customers are very concerned,
and so are we. During difficult times like these, it’s okay with us if
we make a little less money.”

Kmart, of course, is
making a push with its layaway program and it recently launched a Black
Friday event that started weeks before the unofficial/official start of the
holiday shopping season.

Yesterday, an email
from Kent Anderson (no relation), president of macys.com, expressed a desire
to help a shopper who has registered on the site but never actually purchased
anything.

The communication said, “Today’s uncertain economic
environment has made shopping smart a priority for families across the
country.” True enough.

It then offered
the shopper a 20 percent discount on their next (first) macys.com order
with the following from Mr. Anderson:
“I’m offering this discount exclusively to our email subscribers. You
might see a similar offer on the site and in our stores, but this email offer
has fewer exclusions. I hope you’ll make the most of it – use it to save
on essentials for your home and family, or get a head start on holiday shopping.”

Discussion Questions:
Do most shoppers see offers of
“help” from retailers during tough times as something that goes
beyond a merchant’s desire to ply dollars from their purses and wallets?
What must retailers do to be considered “genuine” in the minds
of consumers? Does it even matter or is the deal the only thing that counts?

Please practice The RetailWire Golden Rule when submitting your comments.

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21 Comments on "Retailers Feeling Our Pain"


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Kai Clarke
Guest
13 years 6 months ago

This is the fox in the hen house. Retailers still must make a profit, and consumers still have to spend money. These efforts are simply taking advantage of the times to change their message and reach out to customers in a different way. The messages are slightly different, but this is still advertising, using a sales promotion in a different way, to position the store or products as an appealing focus for consumers who are targeted as part of their market.

Bob Phibbs
Guest
13 years 6 months ago

I haven’t seen so much discount junk with various labels like “friends and family,” “can you keep a secret?” and the like. Marketing departments have been given the marching orders to drive people to the store/site–even though most people are still waiting on the sidelines for some sense of normalcy in the economy. The truth is, retailers are feeling their own pain. My favorites are the ones saying they know with “the high cost of fuel,” how shoppers budgets are stretched. Hello–that was in July!

When these desperate efforts fail to move the needle, look for another round of discounts on discounts on discounts because “everyone’s doing it.” Blind leading the blind. You can’t build a profitable business this way. It isn’t news to most of us on RetailWire, it’s reality.

Phil Rubin
Guest
Phil Rubin
13 years 6 months ago

It all depends on whether a merchant’s empathy is genuine and on-brand for them. If so then it’s relevant and if not, then it is disingenuous.

Merchants with bona fide customer relationships will find that customers are not going out of their way to shop but if given a reason (i.e., a great and/or relevant value), then they will come. The economy is bad but it is not dead.

Max Goldberg
Guest
13 years 6 months ago

I think most consumers see these efforts for what they are: advertising. Yes, they appreciate the coupons and the lower prices, but consumers understand why these efforts are being made.

Charles P. Walsh
Guest
Charles P. Walsh
13 years 6 months ago

Tough times for consumers means tough times for retailers. The retailers sincerely want to offer their customers some relief in the form of lower prices, but these lower prices are in effect advertising and marketing dollars which would be spent regardless.

These efforts are meant to keep their customers shopping with them. How effective this approach will be is questionable. Walmart just released remarkable sales and profit increases. Looks like they’re gaining marketshare…at someone else’s expense.

Liz Crawford
Guest
13 years 6 months ago

Consumers are looking for real bargains, not trumped up sales talk. They appreciate actual savings. But, they also understand that retailers are hurting (look at the headlines). Consumers are climbing up their own learning curve of value shopping. This means they are learning to distinguish true value versus pleas to simply “buy more.”

Kevin Graff
Guest
13 years 6 months ago

Yes, I think consumer cynicism runs pretty high these days, but so does their pragmatism. Whether it’s a mere ploy for share of wallet or not, consumers always have and always will respond positively to an opportunity to save money. I’m not so sure anyone feels taken advantage of when they’re being given a discounted price.

Gene Hoffman
Guest
Gene Hoffman
13 years 6 months ago

The consumer’s sympathy is a bit chilled in relation to the distant misery of the retailer.

Nikki Baird
Guest
Nikki Baird
13 years 6 months ago

I had a flashback moment on the Wegmens comment–it sounded eerily like the tuna pitch that Terri Garr came up with in the movie “Mr. Mom.” Direct, slightly cheesy, but far less cheesy than the alternatives.

Consumers are savvy and jaded enough that they see right through these kinds of pitches, but as we’ve seen around consumer privacy, they’ll give their data or their dollars to the company that gives them the best value. So while it’s slightly cheesy to say “we feel your pain and we’re here to help,” on the other hand if what you put together as an offer is creative–and helpful–then customers will reward you even when they’re not necessarily buying the message.

Dick Seesel
Guest
13 years 6 months ago

I agree with Max: Most consumers recognize “I feel your pain” tactics as ways to drive traffic and businesses to websites and to stores–since retailers are hurting as badly as consumers right now. There is nothing wrong with trying to communicate value, especially if it’s a core part of the store’s brand: The Walmart slogan (“Save Money, Live Better”) has never had more resonance. For retailers who are still trying to be too aspirational and upscale in their image advertising, however, it’s hard to see much sincerity in the effort other than the desire to survive.

Doron Levy
Guest
Doron Levy
13 years 6 months ago

It’s all about the value. Show me the money. If you show me the money, then I know you are on my side. Give me an aggressive percent of, or a BOGOF on a staple item. Also, give me bonus loyalty points!

The loyalty vehicle worked very well here in Canada when retail gas prices were skyrocketing. As a customer, all I want to see is the value in black and white. That is what is on my mind, value. How can I get more from this dollar? Well-positioned promos can capitalize on that thought process.

Steve Bramhall
Guest
Steve Bramhall
13 years 6 months ago

The customer will of course welcome reduced prices. Savvy customers will ask whether they are really cutting margins for our well being or to drive more traffic. The challenge is that these companies are still under pressure to increase profitability and as the recession deepens, what will they do? More empathizing messages and price cuts? Of course, the upward supply chain takes most of the hit.

Lee Peterson
Guest
13 years 6 months ago

You know, with inventories backing up the way they are now, all these “promotions” should read more like “Come Get It, It’s Free!” There are no more illusions about “helping” consumers, it’s time to be honest and just say “please help US.”

David Livingston
Guest
13 years 6 months ago

It’s really silly to suggest that a retailer be genuine and feel our pain. That is like asking a tree or a rock to be genuine. Only people can be genuine and that is usually the customers. A retailer is not in business to be sympathetic but rather to make money. Sure, some small companies can add a personal touch, where the owners deal directly with the customers, but in general, retailers are large sterile entities.

Tim Henderson
Guest
Tim Henderson
13 years 6 months ago
I like these efforts to position merchants as understanding the difficult economic environment that consumers are navigating. Shoppers are smart; they know merchants must make money and that these efforts are, in part, a way to ease the consumer into the buy. But that reality is balanced by another reality: The current economy is a great leveler, i.e., all consumer demos are being impacted similarly by events largely beyond their control. And even if they feel relatively secure about their careers and personal finances, consumers are still subject to the same fear of what may happen down the road, as well as the anxiety produced by what is actually happening on the local, national and global levels. Marketing messages targeting shoppers in this environment need to convey two things simultaneously: (1) an acknowledgment that the merchant understands that the current economy is forcing consumers to rethink purchases and shopping behaviors, and (2) a message that the brand (either store banner or product brand) offers value of some sort that goes beyond price, e.g., quality product,… Read more »
Ben Ball
Guest
13 years 6 months ago
It seems we all pretty much agree that consumers view these offers with a jaundiced eye at best. But what to do? It is going to be incredibly tough to persuade consumers that an offer of discounted prices in tough times is an altruistic gesture. Especially since we bombard them with the very same offers during economic boom or bust alike. Even the most genuine offers sound insincere when the advertising/marketing community stretches every nuance for advantage. Here’s my favorite recent example. I bought a new truck for the family’s outdoor excursions a few years ago. The model I selected was somewhat new to the market and trying to “out do the big boys” (Ford, Chevy, Dodge) on being the toughest truck on the block. The advantage they selected to advertise was towing capacity. All the big three touted 9500 pounds as their towing capacity. This model claimed–you guessed it–9600 pounds. Now the clincher. During the late gasoline price explosion, one local dealer advertised the same model as “the best gas mileage of any truck… Read more »
Ian Percy
Guest
13 years 6 months ago

As Duke Rochefoucauld said back in the 1600s “We perform according to our fears.” When we insist on talking about and acting on pain and misery we perpetuate pain and misery. We prefer to blame some mysterious evil force but the fact is most of the issues we wrestle with result from self-inflicted wounds. If we can self-inflict misery why on earth can we not self-inflict health, happiness and prosperity? Walking into most stores today is like walking into a black hole of negativity.

I believe the retail industry could do a lot to raise up the heads, hearts and spirits of their customers. Start with looking at your signage. Does it depress or uplift? Do customers feel energized just walking into your store or do they face chaotic piles of discounted junk and disengaged staff reinforcing the idea that customers are not worthy of any more than that? Our beliefs and feelings dictate our actions and our actions create our circumstances. And we control all of it.

Gene Detroyer
Guest
13 years 6 months ago

Imagine a meeting of the executive committee of some retail chain. All are wringing their hands with concern. The CEO says, “As bad as sales are for us, some of those customers are suffering even more.”

The EVA chimes in, “Yes, I just heard on CNBC that 234,000 more jobs were lost his week.”

CEO: “Is there anything we can do to help these folks?”

VP of Marketing, jumping up with excitement, “Yes, we can give them a 20% discount!!!!!”

Everybody cheers, “Yes, let’s do it!!!”

Enough said.

Li McClelland
Guest
Li McClelland
13 years 6 months ago

One of the few companies I have seen recently which seem to have managed this delicate balance is the upscale Ruth’s Chris steak house chain. Last week they mailed a heavy stock postcard coupon to select existing customers which said, (I may be slightly paraphrasing) “Tough Times Call For a Tender Steak.” The coupon is for a not insignificant $25.00. I was struck that they: 1. were reaching out specifically to their known customers in a smart cost effective way, 2. were unashamedly acknowledging that people who patronize higher end restaurants for business or pleasure are feeling economic stress at this time, 3. subtly played up the benefit of a small bit of luxury in making people feel a little better, 4. gave themselves a lead over the competition in that strata with the $25. incentive, and 5. did it with some humor.

Mel Kleiman
Guest
13 years 6 months ago

By the time I write this you can see from the poll that no one totally wrote off these efforts but no one said they were really the best thing going, either.

But just as the article said–in a not quite direct way–it is not what you say but the way you say it, along with what your brand image has been saying all along. More people will buy the Wegmans story than will buy the extra 20% off coupon from Macy’s

I get all kinds of coupons from Macy’s; it’s just another way to get me into the store.

Ted Hurlbut
Guest
Ted Hurlbut
13 years 6 months ago

It’s really pretty transparent, isn’t it? Many of these stores don’t have enough salepeople on the salesfloor to truly help their customers when they need help. That’s what customers really notice.

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