Why are some retailers shifting away from long term business objectives?
Long form, emotional storytelling still rules retail advertising over the holiday period, despite some retailers shifting their focus to price based deals. Much of the reasoning behind this points at the rise of e-commerce and the likes of Amazon, who put additional pressure on marketers to shift their focus to direct response campaigns. In December we saw Farmers and Apple come out with ‘pull on the heart string’ campaigns, along with John Lewis and Macy’s overseas, but it appears that predominantly U.S based retailers such as Kohl’s and JCPenny are the ones feeling the pressure to adopt price centric messages, which shy away from an IPA Effectiveness view of employing brand building strategies to enhance long terms success.
Both Kohl’s and JC Penny are examples of two U.S retailers who have been pushed into taking a price and product based focus ahead of the holiday season, in attempt to drive short term sales. Kohl’s played with the idea of ‘Give Joy, Get Joy’ to showcase their loyalty program (Kohl’s Cash), whilst JCPenny have similarly created the ‘JCPenney Holiday Challenge’, to highlight the exclusivity of its product assortment in conjunction with low prices. Both Kohl’s and JCPenny are certainly not the only retailers who have focused on a short term approach this Christmas, and are by no means wrong in doing so. What is important to understand is that short term strategies such as P&P messaging can work effectively to bring returning customers back in store to drive an uplift in sales, but brands also need to employ an overarching long term strategy to ensure that other factors such as recall and growth are being measured over the long term. The reason being, is these brands will only see an uplift in sales and short term growth until a better offer lands in market, in turn having no impact on market share and brand positioning in months to come.
This tendency to focus on short terms success is attributed to a number of factors centred around direct response advertising, however this can often cause long term goals such as the impact of advertising to reduce price elasticity and improve business growth to be overlooked, for example. Les Binet and Peter Field conducted a study on ‘Balancing Short and Long-Term Marketing Strategies’, highlighting the need for marketers to find a balance between long term and short term success, by considering the role of brand building and emotional prying with activation and messaging.
Farmers and Apple for instance took a ‘work on the heart and not the head’ approach to the festive season, as they highlighted the importance and satisfaction of giving at Christmas. Although both retailers are continuing to use price and product messaging, they have also employed an emotional long form piece of content at the top of the funnel, so they are also connecting their price and product messaging to a higher purpose, being ‘the feels of giving’. This connection ultimately helps to establish an emotional connection to their brand by associating a meaning to consumption with their brand.
So when you’re next considering KPI’s for your brand, ensure you find that balance between long term and short term success, by considering the role of emotional engagement, personal connection and multi-channel content strategies in order to retain market share.