Does Marketing Help or Hurt in a Downturn?

Two apparel retailers, Coldwater Creek and Men’s Wearhouse, have marketing strategies going forward that are as different as the clothes they sell. But both of them are putting those initiatives in place to attack a tough economic environment.

Coldwater Creek, the Sandpoint, ID-based retailer that targets women over 35, plans to cut advertising by 70%, according to this article. “We’re not going to market our way to greatness,” says Daniel Griesemer, the company’s president and CEO, stressing that Coldwater needs to focus more on fashion. “It’s got to come from an incredible product.”

Houston-based suit-seller Men’s Wearhouse is going the other route. The company is stepping up its efforts “to not only bring in new customers but to strengthen the brand as well,” said Chairman George Zimmer during a conference call.

Both retailers were hit hard by slumping fourth-quarter sales. Coldwater’s same-store sales plunged 19.2% year over year, and the company posted a $17-million net loss. Men’s Wearhouse experienced an 8.6% dip in its US stores, and net income fell to $14.8 million from $52.3 million during the same year-ago period. “It certainly feels like a recession,” Zimmer said.

One thing we think is curious about these differing strategies is that we don’t ever recall seeing a Coldwater Creek commercial. But who can forget Zimmer’s sales pitch? We’d gamble that he’s a more recognizable retail executive to the general public than Lee Scott!

So are these two retailer’s situations so different that they need to employ contrasting tactics? Or is there a clearcut way to battle the downturn by spending more, or cutting back, on marketing?

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2 Responses to “Does Marketing Help or Hurt in a Downturn?”


  1. 1 Nancy Hamel March 19, 2008 at 11:35 am

    I agree 100% with Zimmer & Men’s Warehouse – in a sagging market the most important thing is brand recognition and visibility. It doesn’t matter if you have the best or worst product – if nobody knows who or where you are, you won’t attract buyers. Even Goodwill Stores managed to suck me in with their radio spots – out of curiousity if nothing else. I didn’t buy anything when I went there, but they got me in the store. Sadly, if I didn’t get their freebie catalogue in the mail, I don’t think I would even know that Coldwater Creek is a clothing store. Their marketing is non-existent. However, when my son got married – we went to Men’s Warehouse for all the tuxedos. When my husband needs suits, jackets, shirts or ties – we go to Men’s Warehouse. Why? “I think you’re gonna like the way you look.”

  2. 2 Mike Ferguson March 20, 2008 at 8:40 am

    I believe that George Zimmer has had it right even in a great economy, but will benefit long term in a weak economy and the reason is frequency. Men’s Warehouse ads are run in such high frequency that you can’t help but ignore them. Even if you run a terrible ad that has no excitement whatsoever, if you run it with an incredible amount of frequency, consumers will get the message.

    There is a large amount of research telling us that retailers who increase their marketing during poor retail seasons tend to not only fare better in a recession or weak retail period, they also fare better over the long term as well.

    If everyone took George Zimmer’s approach, I believe a lot of large and small businesses would be surprised at the return on their investment.


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