Retailers Keep On Promoting As Economy Toughens

By Amy Gilroy On Sep 24 2001 - 6:00am

Despite a tough economic climate, most retailers say they are not cutting back on advertising and some are even increasing ad dollars. Others say they are implementing new strategies to cope with a significantly changed retail environment this year compared to 2000.

Almost all retailers contacted by TWICE say they have cut out all experimental advertising and are sticking with tried-and-true methods of targeting their key demographic. Some are also adjusting sales floor strategies and branching into new categories such as performance accessories (see TWICE, Aug. 20, p. 25).

Myer Emco, Gaithersburg, Md., says it upped its radio advertising this year to help drive customers into the stores. The chain is also pursuing more targeted advertising by working with the National Import Racing Association to add an import car accessories competition to Myer Emco's dB Drag events.

Despite the fact that Myer Emco does not sell performance accessories, car stereo division manager Brad Henderson says the strategy is already paying off in terms of attracting a younger demographic of 18- to 24-year-olds. "One of the competitors saw what we can do with a car A/V system and we ended up doing a 10 grand system for him," Henderson noted.

Boomer McCloud, Newington, Conn., is also boosting advertising. "As long as [the economy] stays like this, we'll be as aggressive as possible to keep the awareness up and try to get our share of customers," said VP Bob Zinno.

Mark Scrivner, co-owner of Santa Fe Auto Sound, Overland Park, Kan., said, "We've stuck with our advertising through the summer selling season. We've had pretty good success doing a three-day sale or an event promotion. We advertise on radio, TV and direct mail and we found that our traffic count peaks during those times. You almost have to do something. People are still buying the deals, but not much else."

It is the smaller independents who are hardest hit in a skittish economy and who find it the hardest to maintain advertising levels, said industry members.

Car Connection in Waterbury, Conn., a lower middle class town, said it hasn't been doing much advertising, "I don't think it would help to advertise now," said owner Rich Smith, who said the store was down 10 percent in year-to-date sales from last year.

"We've had some pretty panicked retailers calling in at their wit's end saying: 'What can we do?'" said Rick Mathies, operations director for the Mobile Electronics Retailers Association. He added, "I've talked to some who have kept advertising or increased it, to no avail. I tell them don't cut that off and look for other alternatives, maybe even do some direct mail which costs 34 cents to mail or a postcard which is less than that. Start doing some ads in high school newspapers, that's very cheap."

Bob Graham, president of Breakers Mobile Electronics, Oxnard, Calif., has cut his losses in half by getting back on to the sales floor himself, to reassess a sales strategy.

Graham said he took a couple days off to help out on the sales floor and noticed that the business was running the same way it had 10 years ago, even though the market has changed dramatically since that time. "The consumer right now, pays more attention to price. He's not willing to go into debt to finance things. There's so many mixed signals in the economy that's he's confused," he explained. "So when someone comes into the store, he's talked to by the first salesman and then, if he can't close the sale, a second one comes over, and if he still can't close the sale, then the sales manager is brought in. Several years ago if you had 10 customers and wasted one or two, it wasn't a big deal. Now customers are more reluctant to part with their money and you have to work harder."