With recession hitting the global economy in a big
way, it seems that much cannot be done to escape the crisis bites. Or, is
there?
Financial problems are growing in an alarming rate even for big
retailers and suppliers. Small and medium sized retailers see their cash flows
drying up. Businesses are scrambling, to make sales, and seek for ways to
enhance business processes and performance. Suppliers who provide products to big garment manufacturers and retail chains are getting burnt. Summing up
with the issues of the crisis bitten industry, the ultimate scenario is; shortage
of merchandise, cost cuttings, shut downs, and layoffs.
Marketing the way through Recession:
Shopping is now, on the verge of undergoing a sea change. The
amount of disposable income in the hands of over leveraged consumers is less.
As the economy stagnates, businesses are under the responsibility to develop
sales, and management strategies' to generate revenue.
- Sustain the current customers: The best way to ride the tide
of slowdown, and keep the business afloat is to concentrate on the current
customers, and fulfilling their needs. This would be a better choice than
cutting down the market research budget. More attention must be paid to
what shoppers are requesting, snapping or complaining about.
- Maintain the Advertising costs: It is the general tendency of
the business to cut down the advertising costs during recession. But,
advertising during a slump, when the competitors are cutting down can
actually improve the market share and return on investment. The ratio
might at times even prove to be better than during good economic times. To
minimize the costs, the frequency of the advertisements can be curtailed.
- Adopting price tactics: Consumers would prefer to shop
for products with the best deals. Offering the products at an affordable
and inconspicuous price will lift the consumers' spirits, without
pressurizing them.
- Focus on the Market share: Having a proper understanding
of the cost structure of the business will aid in saving money with
minimum consumer impact. Retail giants like Wal-Mart has a strong market
position, and productive cost structure in the industry will gain more
market share.
- Additional Services: An effective approach to increase sales during
a downturn is to give something extra to the customer. Offers should be
customized to meet the specific requirements of the customers. This can be
either in the form of a promotional item, an extended discount or
otherwise.
Strategies of Retail Giants:
As the pangs of recession crunch deep into the retail
industry, apparel retailers are facing a slippery slope. Individuality and
innovation needs to be utilized to employ creative tactics to enhance the
customer understanding. Retailers are now offering exclusive merchandise, and
more focused customer service. Retailers are now ordering for limited number of
apparels, leaving the customers with limited brands to choose because they have
understood that, they cant get out of the apparels that they have ordered
months before. They prefer to order less number of apparels in each size rather
than risking to have more inventory left over.
Collaborations will come into vogue between retailers and
prominent designers. This will give the retail outlets, a unique identity, and
also make sure, that garments available in their shops are not sold in multiple
outlets. Consumers will also get more attention from the sales staff.
