US Retailers Lean On CRM Techniques to Repel Recession

27 November 2008

NEW YORK: "I don't have to tell you where the store is, I don't have to tell you the virtues of the brand ... I just have to say: 'Thank you for coming to Sears. We have even more products and opportunities for you'."

Such simple and cosy messages are the way to unloosen customers' purse-strings in times of recession, believes Ogilvy Consulting managing director Marc Fleishhacker, whose agency created a succesful recent campaign for the US retail giant.

In tough times, old and proven remedies are the safest bet. Thus it is that Customer Relationship Marketing (CRM) is fast making a comeback from the 1990s when it attained marketing mantra status.

It's a given that persuading a satisfied customer to return is a cheaper option than identifying then converting a new one. That simple marketing truth has never gone away.

But, until the current financial meltdown, it had fallen out of fashion amid the welter of unrelenting hype from voguish new media – exacerbated by the 'Emperor's new clothes' syndrome that afflicts many agencies and clientside marketers.

Sears is not the only apprehensive retailer to fall back on CRM. JC Penney, Target and Gap are also trawling statistical models, data-mining and other technologies to send specific consumers promotions based on their likely shopping lists.

Although TV remains the prime medium for retail, there is an increasing readiness to experiment – driven by unease as to the measurability and return on investment of traditional media.

For the second consecutive holiday season, Gap isn't running any TV commercials, relying instead on online promotions and targeted emails.

Says the firm's evp of marketing Ivy Ross: "We really are experimenting with other places where we can be our best and engage with customers in a different way."

Likewise, JC Penney is also refocusing on search ads, digital promotions and email, segmenting its email databases according to customers' shopping behaviors and then sending out relevant messages.

"As print consumption is on the decline, customers are choosing to receive information digitally," argues JCP's Rebecca Winter, corporate director of brand communications. "Tailoring the email insures that our customers are receiving timely, relevant information." 

Looks like a combination of the old and the new could prove a potent marketing brew.

Data sourced from Wall Street Journal Online; additional content by WARC staff