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.