By Wanda Kenton Smith
While some industries took a beating during COVID, many in the outdoor power and marine space were clobbered by unprecedented product demand. While sales and profits spiked, retailers grappled with the challenge of inventory limitations, associated supply chain and manufacturing production slowdowns.
As we venture into 2023, the cycle has shifted, inventory is building and our marketing must follow suit.
At EPG Brand Acceleration’s — parent company of Boating Industry and Powersports Business — recent ACCELERATE and ELEVATE Summits held in mid-November, Chief Economist Curtis Dubay of the US Chamber of Commerce addressed respective audiences and launched his presentation with song lyrics from Blondie: “The tide is out and I’m holding on …”
He submits we may be in for a rough ride through 2024.
Dubay cited growing consumer concern about the economy over the past several months, plummeting to historic recent lows — even surpassing sentiment in the early days of COVID. Inflation is flaming the fire, with prices skyrocketing in several key drivers: food-at-home prices up 12.4% annually over a year ago; gas prices are up 20% over last year; electricity is up 14%; and the double whammy including the sharp increase in interest rates. Even though wages have grown, inflation is outpacing it. The result is more consumers are now carrying larger revolving credit card balances.
The one surprise to this scenario and the silver lining is that consumers and businesses alike are continuing to spend. Black Friday set records and the Christmas holiday shopping is brisk. Employers are continuing to hire, raise wages and make capital investments.
The saving grace and the unusual anomaly in this scenario, says Dubay, is that consumers are continuing to spend, thanks to the trillions in savings stockpiled over COVID that is currently serving as a short-term buffer.
While no one can predict the timetable with certainty, there’s no doubt that the economy is going to experience some rocky bumps in the foreseeable future before inflation comes own. If the economy slows, Dubay suggests the feds may respond by easing interest rates as a jump start to recovery. However, if the economy remains weak into late 2023 and inflation remains high, the feds will likely keep raising rates through 2024, which will likely create more severe conditions.
As we throttle forward through this cycle, Dubay expects the longer-term outlook in 2025 and beyond should be a period of positive, robust growth, barring any unanticipated geopolitical crisis, global health epidemic or other unanticipated developments which could further derail the economy at any time.
Considering these issues and concerns, here’s the million-dollar question on the minds of business leaders in every camp: how do we survive and thrive during the looming recession ahead?
While there are many areas to address on the business and operations front, one critical component involves marketing. It’s time to pivot on the marketing front by deploying smart recessionary strategies.
- TIME TO MARKET AGAIN. During COVID, business was banging the doors down and most retailers minimized their advertising investment. With a lack of product and the ability to sell virtually anything on the lot, the role of marketing took a natural down shift.
Today, it’s a markedly different environment. Now it’s time to shift gears and actively market once again. Consider inexpensive digital marketing campaigns that allow you to test market on a dime and adapt accordingly. Collaborate with your media partners for best practices. Try different approaches to see what messaging resonates and generates qualified leads.
- CUSTOMER RETENTION STRATEGIES. In the heydey of COVID, many sales teams were so busy taking care of deliveries that they failed to engage or follow up with customers.
Customer retention is a major strategy required for retail success. The marketing and sales teams should actively reach out to customers and re-engage with relevant messaging and special offers designed to spark interest and reward loyalty.
Besides tapping and leveraging your various marketing and advertising platforms, it’s also important for salespeople to get off their laurels and get back to personal connections. Make phone calls, send texts or emails to former customers and/or prospects. It’s time to start professional selling again!
Important: every lead right now counts! Be highly responsive and immediately follow up on every incoming lead.
- AVOID DISCOUNTING. As the economy continues to grind, don’t panic at the first big dip and start slashing prices. Discounting devalues the product and creates massive confusion in the marketplace.
Instead, gather your team, brainstorm and develop other attractive incentives to incentivize your customers. Some ideas: extended or special service programs, guaranteed trade or buy-back options, attractive option packages, holding current year pricing on new model inventory, financing support, etc. What will get the attention of your customers and prompt them to buy NOW?
- PUSH & PROMOTE USED PRODUCT. Besides the growing new product inventory out there, don’t forget about the opportunities associated with used product sales. Reach out to your customers and offer easy solutions to help move their product through consignment programs. Offer attractive trade-in options to get them off the mark to buy up.
Now is not the time to rest on your laurels or to take a wait-and-see attitude. Now is the time to create a plan flanked with smart strategies and tactics which will allow your company to move forward and get ahead of the dangerous curves coming.
Wanda Kenton Smith is a former consumer and trade magazine editor; award-winning marketing consultant; and national marketing columnist since 1998.