The statistics are in. The National Retail Federation (NRF) estimated that U.S. consumers spent $372.57 on average, an increase from 7.2% from a year ago. Which at first glance seems positive, however, come Saturday most retailers were reporting a significant drop in traffic. People pursued gate crasher specials, bargains, expansive sales and then stayed home. This fits with DDB’s view of the economic crisis – consumers are changing their definition of value on an almost daily basis as they react to economic news and the state of their own wallets and purses. Going forward, the NRF is predicting a 2.2% increase in holiday shopping sales this year, the smallest increase since 2002. Companies that know their consumers and prospective consumers can still do better in their category than their competitors if they chart the consumer price/value equation outlined in DDB's paper, Capturing Opportunities in Challenging Times. Two for one sweaters, heavily discounted flat screens, 50% off sales cannot sustain a company or brand for a prolonged period of time. The motivation to reduce inventory, generate flat or some sales growth while reacting to consumer confidence cannot be ignored but neither can the long-term impact on the health of the brand.


Jeff Swystun, Chief Communications Officer, DDB Worldwide

Posted on December 1, 2008 9:51 PM | Permalink

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