Now it is upon us, I have been speaking for over two years on my fears for a major consumer led downturn, and Best Buy has also lowered the sales guidance for the coming year.

Many retailers will now be in panic mode, what will Christmas bring and what will we do? Well, are you a man, or a mouse?

A rising tide lifts all boats, for the last 14 years, we have been in one of the longest business up cycles in modern history. Sales gained year over year, store on store.

You may have noticed, that that is changing very rapidly. Any business gain that you now have will come from one of two sources:
1. Finding new markets or niches to service
2. Conquest of the customers of your COMPETITORS

You and your organization will naturally go into "safety mode" that is the natural response to slowing markets for most retailers. What will differentiate the winners from the losers over the next 12 months?

The winners will decide to cut back fiscally, while intelligently spending in selected areas, that will help them to grow their business. In order to grow your business, you will need to find new market niches and services and steal customers from your competitors.

Eat or be Eaten.

If you are not doing it successfully, will your competition be sitting still?

I will give you an example, one retailer was competing against one of the most successful jean retailers in North America. They had to discover who the customer, the in store non buying traffic and the competitor customer was, what she wanted and they had to know a lot more about her fast.

By using an integrated, extended engagement and feedback program, they discovered some very profitable insights.

This retailer thought that they had to be the "Jean Experts" in order to outpace the competitor. Through the extended engagement and feedback program, they learned about the in store non buying traffic and the competitor customer.

Surprisingly, she was not as interested in "Jean Expertise" as this retailer thought. She wanted something less tangible but far more important for sales.

She wanted "Brand excitement" and "A Compelling Story" attached to the store and brand experience.

Now, being "Jean Experts" was very costly and frustrating, as a constantly changing front line workforce had to be continually trained and monitored as "Jean Experts"

So, this smart retailer, used the in depth insights into the real time experience of:
1. The Customer
2. Non Buying in Store Traffic
3. Potential Target Market (including competitor customers)

Smart retailer developed a simple ad campaign, supported by a variety of in store marketing and display tools, to tell a compelling human story around different jeans, linked to emotional experiences in the specific jean.

Did it work?

Like wildfire.

In the last quarter, this retailer gained sales, while everyone else in the market segment lost ground.

By really knowing the customer , the store traffic and the potential customer, this retailer took control of a bad market.

By not retreating, but looking for opportunity, this retailer is winning in tough times.

Now, for extra credit, this retailer can measure in real time, the impact of the new experience in the store and with the staff.

Everyone is happy, and a Merry Christmas will be had by all.

Lesson: Knowledge is Power and

Do not let the market condition dictate defeat.

_______________________________

Martin Hoffmitz
VP, Client Partnering
BehaviorWorx Inc.
#202 - 222 Islington Avenue
Toronto, ON M8V 3W7

Email: martin.hoffmitz@bwxi.com

Office: 416.251.0111 x250

Cell: 647.287.4491
Fax: 416.251.9489
Web: www.bwxi.com