Retailers urged to adopt communications strategy

Angee Walls, managing director at Catalina Marketing, has considered how marketers can react to the current retail environment.

It was only a matter of time before the economic climate hit the retail community, and the demise of Woolworths looks to be the first of many high-street casualties.

The reports from the high street indicate that the situation is likely to get worse rather than better, and many retailers will be entering 2009 with trepidation.

While consumers are benefiting from what seems like endless offers to drive sales, there will be some retailers who will simply be unable to sustain this approach.

Ultimately such sales are always a last resort and will not ensure retailers maintain loyalty from consumers as they merely move from shop to shop to find the best offer.

If UK retailers are to have a fighting chance of survival they need to consider introducing a strategy that integrates marketing activity and drives an immediate response from the consumer.

This can be found by adopting an in-store communication strategy, underpinned by sophisticated data analysis on purchasing behaviour.

Long-term activity such as loyalty cards have had great success in the past, however in the current economic climate retailers need to engage quickly to ensure the consumers spend in their store and not with the competition.

Relying on activity that takes weeks or months to result in an offer for the consumer will struggle to engage.

What retailers need to understand is that there is an alternative and they can embrace an in-store customer activity that will drive sales and can also be utilised as a very powerful mechanism for marketing messages; clearly a win-win situation for all concerned.

The beauty of this approach is that it ensures the customer is issued with an immediate promotion based on their recent purchasing history.

Furthermore, this form of communication will allow retailers and brands to prevent customer defection.

Therefore as soon as they notice a customer's spending is reducing they can respond to the current financial chill.

This strategy has long been embraced in the US and Europe and has provided unrivalled return on investment against other activity.

What is important for retailers to understand is this approach can be integrated seamlessly with other activity such as loyalty cards.

This means they can continue to run these schemes but address the immediate economic climate.

Throughout 2009, retailers need to be smart with marketing budgets in order to ensure they don't lose any market share, while still enticing new customers, which is by no means an easy challenge.

Existing activity such as loyalty schemes are only addressing half the issue and I recommend retailers readdress the balance and do so quickly.

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