Changed Consumer Behavior Requires Changed Marketing During Pandemic

Consumers are changing their shopping habits during this pandemic year, and these changes in turn require changes in marketing approaches. According to The Drum:

Confronted with unfamiliar stores and shelves filled with less familiar product choices, there is a much bigger opportunity for them to abandon past favorites.

In other words, this is a very good marketing opportunity to encourage brand switching as consumers approach shopping differently than in prepandemic periods. 

Everyone, please stay safe.

Black Friday Expands to Black November

Not so long ago, retailers would plan "door buster" deep discounts for the Friday after Thanksgiving, aiming to entice shoppers who wanted to get a jump on their holiday gift purchases.

These days, Black Friday isn't just a single day--or even a single week. Nope, it's several weeks long. Above, Amazon posts new discounts every day on its "countdown to Black Friday" page. Best Buy already has Black Friday specials.

So does Walmart, which is also planning to open many of its stores on Thanksgiving and feature deep-discount Black Friday deals at 6 pm on Thursday evening. For online shoppers, Walmart will kick off Black Friday all day on Turkey Day, as shown here on its website.

Walmart is trying something new this year: in-store parties to demonstrate products and create a special experience for shoppers who choose to buy in person. The plan is to throw some 20,000 parties nationwide, inviting shoppers to come on in and try new products, taste new foods, or watch new demonstrations--get in a festive mood and buy!

Are Department Stores Dinosaurs?

The uncertain future of department stores has been discussed for more than 30 years, with the rise of specialty stores, consumer preference for lifestyle shopping centers instead of enclosed malls, and--of course--online shopping.

During the 1980s and 1990s, department stores and mass merchandisers were making significant changes behind the scenes. Point-of-sale terminals replaced cash registers, and personal computers brought data analysis to management's fingertips. Managers could see hourly sales trends instead of waiting for end-of-month numbers.

In those days, department stores like Saks and Sears still offered private-label credit cards, which in turn allowed them to see who bought what and how often. Credit was frequently a source of profits, not just an engine for supporting sales increases. (Today, nearly all store cards are operated by non-retailers). Remember, Sears founded the Discover card, using its expertise in the credit industry. Here's a case study about Sears that offers clues to some of the retail challenges of the time. And here's a quick look at how Sears evolved over the years.

The question of whether department stores are dinosaurs bound for extinction is still being asked. A real estate analysis firm recently estimated that department stores would need to shutter hundreds of branches to return to the sales-per-square-foot productivity levels of 2006. That translates into a sea of empty anchor stores all over the country. Malls are trying to update the shopping experience to bring consumers back, to go to the movies or for specialty stores that are especially in demand.

In a world where promotional pricing attracts shopper attention, department stores are joining in, and that's making waves for high-end brands. Michael Kors is going to limit the number of products it sells to department stores to avoid having its lux image affected by promo pricing.

Department stores are also making some other adjustments. Macy's is closing a few dozen stores, and Sears/Kmart is closing some stores as well. Macy's has begun rolling out "Backstage" off-price stores within stores to utilize space and attract price-conscious shoppers who might otherwise go elsewhere. Sears is leasing some of its space to other stores, such as Primark.

It's still too early to deem department stores dinosaurs.

Have Malls Jumped the Shark?

Definitely. Reports may be exaggerating the imminent demise of the American shopping mall, but there has been a distinct downward spiral during the past decade or so.

Consider these headlines which appeared during the past six months or so:

• The economics (and nostalgia) of dead malls (NY Times)
• A dying breed: The American shopping mall (CBS News)
• Malled: The hollowing out of an American institution (Bloomberg)
• Here's what's becoming of America's dead shopping malls (NPR)
• The death and rebirth of the American mall (Smithsonian)

PBS News Hour has an educational page titled "Why malls across America are dying" and that's where I found the graph at the top of this post. Supply is too high while demand is too low. Period.

There are too many enclosed malls and stores chasing too few in-person shoppers. Between the economy's problems and the meteoric rise of online buying, malls don't have the foot traffic they once did. Plus malls are often homogenous, meaning one mall has nearly the same stores as the next (not always, but often), which means little novelty.

Not to mention growing interest in shopping locally and patronizing small businesses who can't afford mall locations. Plus, until recent months, high gas prices discouraged some people from driving to large regional malls for a day of browsing, eating, and perhaps buying. In addition, consumer behavior has changed and now shoppers appear to prefer open-air lifestyle shopping centers where big-box or destination stores are spread along a street with smaller specialty stores and restaurants a walk away or a quick 30-second drive. No more long walks from outside parking lots to inside stores on the 2d or 3d level of an enclosed mall.

So malls have jumped the shark -- meaning they're way past their peak -- and now are using various experiments or innovations to either attract shoppers or . . . . worst case, to breathe new life into a location now devoid of stores.