Recession Tips For Retailers
 By Alex R. Merriman

Consumers have a new mindset. It’s called recession.

They’re less likely to buy on impulse. They’re more likely to research products and purchases in an effort to find the best value.

Consumers are making fewer shopping trips and they want to shop closer to home, all in an effort to save gas.

They may be on the hunt for lower prices, but they still want value and expect excellent customer service.

So how can small retailers keep customers coming to the shop during these rough economic times?

Steve O’Leary and Kim Sheehan have a few ideas. They’re authors of a new book, “Building Buzz to Beat the Big Boys: Word of Mouth Marketing for Small Businesses” (Praeger Publishers, 2008).

O’Leary and Sheehan point out that small retailers can exploit a big competitive advantage in these recessionary times: Being a local business. Small, local businesses know and understand their customers. And they can deliver a customer service experience far superior to the big-box chains.

To help small retailers capitalize on these and other advantages, O’Leary and Sheehan offer these 12 ideas for thriving during a slumping economy.

1. Continue advertising
History shows that marketers who stop advertising during a recession lose market share.

2. Focus on existing customers
You know your customers better than anyone. You know what types of product mixes are most appropriate for them. Use this information to create offers that are most valuable to them.

3. Listen
Collect customer feedback. You can use formal surveys. Or you can go informal by simply asking people questions while they’re in your store. Either way, find out how your customers are dealing with the recession and how your store could help them. Ask them what types of specials they would like to see.

4. Focus on the neighborhood
With record high gas prices, people are likely to drive less. Allocate some of your marketing budget to current and potential customers who live close to your store (also known as your retail trading area). Print media is great for this effort, especially flyers and/or direct mail.

5. Value messages are critical
Think about the prices you can offer as well as the discounts that might be available. Make both prices clear in your messages.

6. Politeness counts, more than ever
Greet customers when they enter your store. Thank them when they leave.

7. Consider a loyalty program
If you don’t have one in place, think about a punch card-type loyalty program that’s quick and easy to implement.

8. Create benefit offers
Select specific products or services and package them into a value offer that you can advertise in your store and through traditional channels.

9. Dial up the service
Make sure your employees understand the value of exceptional customer service during this time. Don’t give customers a reason to switch to another retailer.

10. Think treats
Even though customers are cutting back, research shows that they plan to spend a small amount of their tax refund or rebate check on a small treat for themselves. Think about what you might offer your customers as a special, one-time discount on a treat to get people in your store.

11. Partner with a local cause
During a recession, many of your customers may cut back on philanthropic giving. Partnering with a charitable cause reflects well on you and can somewhat assuage your customer’s guilt about not donating more to charity.

12. Evaluate advertising messages and response
If you’re promoting sales and discounts in different vehicles (such as in the local newspaper and online), track your response from each vehicle so you know which ones are working.

AFS Can Help
Check out these AFS benefits to help your retail store survive the economic slump.

AlphaGraphics: A team of certified professionals will help you find the best solutions for your marketing communications. Services include design, printing, mailing and more. AFS Members save 10 percent off retail list prices at participating AlphaGraphics nationwide.

ProTalk: Get new ideas for marketing your retail shop, pricing new products and more from the small-business consultants at ProTalk. They’re just a phone or key stroke away. And they’re available at no additional cost to AFS Members.

(Posted July 2008)

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