Tis the season to get clever

With consumers either experiencing the recession first hand, or fearing the worst through reports in the media, it was well documented that retail spending last Christmas was down, and retailers were forced to clear inventory.

As we move towards the Christmas season, how your products are sold by retailers, and your brand is positioned, is an important consideration.

Businessweek recently looked at what some of the big US retailers are doing to attract customers, without slashing and burning. J.C. Penney is holding back 60 per cent of inventory in warehouses, rather than flooding shelves in store. Goods can then be sent quickly to stores if they sell well, and it creates a sense of scarcity to encourage purchasing.

Gap has an interesting approach, creating a more price pointed range of jeans, made with a fabric that can be dyed into a variety of colours. They can assess which styles and colours are selling well and make more products accordingly.

Rather than cut prices Neiman Marcus is using sales promotions like the "Midday Dash", using social media and email databases to attract customers with deep discounts on select items for a short period time - maybe a couple of hours in the middle of a day.

Obviously if you've worked hard to develop premium brand, the damage that can be caused by heavy discounting can create issues. But carrying stock on your balance sheet can be equally counter productive.

One of the key attributes I developed for the Orca brand from day one was operating as a design led business. By having products that can clearly illustrate innovation and points of differentiation, you can attract consumers whose purchasing decisions aren't necessarily focused solely on price.

Of course lifestyle, luxury or experience brands can be a harder sell during a recession, but if you do your job right, and stick to your guns, you can create a value brand. Of course you still have to adapt to markets and customer expectations, but the fundamentals stay the same.

The retail sector still has some big challenges to face, but you can be clever about marketing products without debasing your brand. Otherwise by the time Christmas 2010 comes around you may find a new raft of challenges.


Scott Unsworth