Tough times breed great businesses.

After a Scrooge-worthy summer, retailers are asking themselves, "Will consumers forgo their traditional holiday spending?" For those seeking a comforting answer, it's not to be found in the media: Consumer confidence has been lost;¹ Worst retail season since 2002;_² Lowest sales in two decades.³ On October 11th, even the head of the International Monetary Fund spoke of a world financial system pushed to the "brink of systemic meltdown."⁴ As retail branding experts, we believe it's time to step back for some much-needed perspective.

For just a moment, let's ignore the bad news. Dwelling on previous years' trend and revenue lines is a barrier to the positive, guerrilla-like mindset we need for success now. The rules of the game have changed. So clear your desk, light a candle, turn off the Blackberry and open your mind. Let's examine what it takes for your business to be great this holiday season and beyond.

1. The corollary to every crisis is opportunity. Find yours.

Here are three positives:

• According to Deloitte's annual holiday survey of retail spending and trends⁵, 53% of Canadians will spend the same amount they did last year on holiday shopping. Another 40% said they would spend less, but that's up from a year ago. Current wisdom says that consumers always understate their spending - it's the budget conscious answer.
• We are not the US. Canadians are predicted to buy, but with more of a "wait and see" approach than in past years. In the US they're just not buying.
• The deflating dollar will keep Canadians shopping closer to home.

2. Pick the lowest hanging fruit.

Identify and reach out to your most loyal and highest-revenue customers. Given that they are already sold on your products and services, they are most likely to feel the same way during economic downturns. Focus on the relationships, the special benefits you can offer to them, and ways of communicating directly. Personal marketing is key to success now.

3. Look at your marketing activities in a new light.

Has consumer demand for your products/services shifted? If your marketing activities target segments where demand has diminished, then it's time to adjust. Conversely, you may find that new consumer spending patterns - moving away from bigger ticket items and luxuries - have opened up a new demand opportunity for your business. Adjusted tactics and focusing on the areas of highest demand and revenue will set the stage for continued ROI.

Is your tone on track?

The consumer mindset has changed and your messaging needs to be in touch with their new reality. In this economy, consumers are more cautious and will gravitate to necessities and products that feel like good value. Looking through a more conservative lens, does your messaging feel appropriate for the current climate? If not, a temporary change in tone may be needed. There is room for fun or whimsy in this market, but beware backlash if you swing too far from empathy to frivolous.

5. Beware the slash and burn discounting strategy.

Walk around any mall and it seems like Boxing Day has come a month early with 50-70% discounts. It's a knee-jerk reaction that may garner initial sales, but beware the inevitable fallout of a price war - you risk permanently reduced margins as your well-trained customers wait for the next sale. Discount items that aren't selling, but do so selectively.

6. Excel at the basics.

Periods of economic upswing can mask or hide flaws in the retail experience. Well-trained staff with exceptional product knowledge, clean stores, inviting merchandizing and appropriate staffing levels is the price of entry in a tough market. As competition increases, retailers that deliver on the basics, then creatively go beyond to make the shopping experience special, will garner loyalty and reap rewards in the long-term.

7. Seek out opportunities. They do exist.

• Consumers are looking for time savers and options that make their lives easier. Finding ways to add value for time-strapped shoppers such as enhanced guest services, wrapping, shipping, and babysitting vouchers will differentiate you when price is a key driver.
• Make it easy for customers to purchase: use your creativity to bundle products in gift packs or segment by price (under $20, under $50); creating the feeling of a fixed value is appealing to a budget-conscious shopper.
• Take advantage of gift cards - almost 65% of Canadians surveyed⁶ plan to make gift cards their top purchase for the fifth year in a row - so look hard at novel ways to maximize your gift card program and consumer spending will follow.

8. Never stop promoting.

By sticking to your marketing plan, there's an opportunity to pick up market share left behind by retailers that go dark. Consumers have been shown to feel confidence in retailers who tough it out so you get to choose: stop connecting or embrace our changing economy and reach out with communications strategies that address consumers' current mindset.

The bottom line is that retailers can't peer into a crystal ball for answers. So stay strong. Stick to your plan. And let's hope that collectively this holiday season we can turn red into the new black.

1. CBC News. (2008, October 17). Canadian consumer confidence retreats to 1982 level. Conference Board of Canada survey.
http://www.cbc.ca/money/story/2008/10/17/confidence

2. Manella, Ruth. (2008, November 9). Worst sales trend since 1974 expected. MarketWatch.
http://www.marketwatch.com

3. Hadzipetros, Peter. (2008, October 24). The cautious season: holiday shopping could offer bargains. CBC.
http://www.cbc.ca/consumer/story/2008/10/23/f-cautiousconsumer

4. Strauss-Kahn, Dominique. (2008, October 18). Statement: International Monetary and Financial Committee.
http://www.imf.org/External/AM/2008/imfc/statement/eng/imf.pdf

5. Abma, Derek. (2008, November 11). Holiday shopping season may be more festive than you think. Financial Post.
http://www.financialpost.com/most_popular/story

6. Deloitte 23rd annual holiday survey of retail spending and trends. The survey was commissioned by Deloitte and conducted online across Canada by an independent research company between September 29 and October 9, 2008.
http://www.deloitte.com