Publisher's Column
The time to PREPARE and ACT is NOW!
You don't need me to tell you that the economy is in a slump! The Dow Jones is less than half of what it was at its peak. GM stock is trading at the lowest point in 75 years! Unemployment is over 8%. You need other proof... just listen to the nightly news or watch CNBC for half an hour!
The birth rates do decline in recessions. However, the popular belief is the effect will not be felt until mid-2010 given the length of pregnancies and the fact that the thinking of young couples to delay their decisions gets affected well into a recession. Also, hospitals have not reported any measurable declines in their monthly births so far.
So, the good news is... retailers and everyone else in our business has the opportunity to plan for an upcoming downturn. The rules of the marketplace are similar to the rules of the jungle... only the fittest will survive—and maybe even flourish. Those retailers who hanker down and circle the wagons around themselves put themselves in a defensive posture. Such retailer will write their own prescription to perish. On the other hand, those who focus on managing their inventories better, curtailing their overhead costs, and getting aggressive in marketing and promoting themselves will stand a better chance of survival.
Let's face it... babies will be born in the coming months and years—maybe fewer—but the fact is we are NOT going into a phase of negative population growth. The question is... will you get your fair share of the slightly reduced pie? To ensure that you do, the cost cutting you do in other areas has to be diverted to marketing. This is the time to consider marketing an investment instead of an overhead expense. When inventory is flying off the shelves and you are inundated with orders, marketing can help maintain the momentum. In such times as we are experiencing or are about to experience, effective advertising and marketing is not a matter of choice but of survival. If the customers don't come to your store, having multiple sales people to service them or having an extensive and attractive display is rendered absolutely useless. Just throwing money into marketing or advertising is also uncalled for. Targeted and timely marketing that is designed to give you the lowest per prospect cost of reaching your audience should be selected. Extreme care and analysis should go into selecting the marketing and advertising venues you choose.
Any strategy to ride out this market situation has to focus on getting the customers to YOUR door!
~ Naresh Dewan, Publisher
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