Retail Brand Strategy in a Recessionary Environment

Over the past six weeks the retail industry has been forced to accept a reality we've all tried very hard to hide from: consumer spending (at least) is heading into the deepest recession in modern memory. All the signs are there, and they are all in alignment: consumers across every demographic and psychographic segment have less disposable income and are becoming increasingly careful about spending what little they have. From my perspective, this is reality. The winners in the coming year will be those retailers with sufficient courage and flexibility to face reality and alter their methods and practices in response.

A quick observation on current Retail Brand strategy: most seem to be based on addiction to "aspirational marketing". That's a buzz word for playing on the needs of people to be "like" those they perceive as "better" than they. More affluent, trendier, cooler, smarter....you fill in the blank. Most brand marketing has become about convincing the consumer to shop at your store because it will make them feel better about themselves. We don't have to beat this to death: just pay attention to some retail ads for a day or so and you'll see what I mean. The boom economy of the past decade generated this brand mantra. An ever expanding expectation, despite plenty of evidence to the contrary, seemed to feed into the need of consumers to believe that the American Dream (as lived by their parents) was still alive and flourishing. In fact, it's been in decline for a number of years. Without the subprime lending practices of recent years, how many of us really would have been able to afford a home that was bigger or better than our parents? Without sucking the equity out of our homes and maximizing our credit lines, how many of us would have been able to buy the flat panel TV's and new wardrobes which proved we were still part of the upwardly mobile?

Reality has arrived. Aspirational marketing not only will NOT sell, it will fall on jaded and angry ears. Will the consumer take responsibility for decisions to buy, buy and buy some more? To make financial decisions, plans and commitment that would have put our parents into a catatonic fit? Absolutely not! It will be the fault of the advertisers, the lenders and the retailers who sold them on the belief that feeling good was just one more purchase away.

Retail brand strategy in a recessionary environment will actually revolve around delivering the goods. That's right: having a competitive advantage which meets a real and valuable consumer need in a more compelling way than your competition. In order to do this, Retailers must redefine what they mean by "real and valuable consumer needs". Aspiring to be one of "them" isn't going to be high on that list.....not when there's not enough money to buy groceries, pay the rent, or buy what they really need.

So what should retail brand strategy be driven by? My belief is that retail brands need to deliver certainty to anxious consumers. Certainty is the belief that whatever it is they are buying is right for them.....whatever "right" means for that consumer. When money is scarce, the most fundamental need is not to waste it. Ask any survivor of the Depression (or their kids)! Fundamentally, this means that your merchandise actually does the things it says it does....and doesn't charge for a host of other features the consumer doesn't really need. Another word for "certainty" is empowerment. Empowered consumers are given the information they need to make the best possible decision for themselves. Retailers who deliver this benefit will garner incredible amounts of brand equity.

So if you want to know what to do in the coming months, start with this question: what can we do to empower our consumers?