Ken Banks Blog Intro 10-08
Press LInk above now to view the 90 second welcome from "Joe Maddon".
It’s a good thing that the World Series this year is providing a lot of interest for those of us here in the Tampa Bay area (and Philadelphia). It helps offset the sense of depression that one can’t avoid after reading the newspaper or watching the news or financial reports on television every day for the past several weeks. If the news in the financial and banking industry isn’t depressing enough (fueled by the ongoing “doom and gloom” headlines), the diagnosis of the retail industry definitely calls for a bleak holiday sales period this year for sure. With the news of Circuit City’s closing of 140 stores to avoid a bankruptcy which seem inevitable now, liquidation of Linens ‘n Things and Sharper Image, as well as the closing and consolidation of Albertson’s stores around the country, there’s good reason to expect that more retailers will disappear before they can start their after-Christmas sales and clearances.
The headline recently that “Big Discounts Fail to Lure Shoppers” in the Wall Street Journal confirms that it take a lot more than just another sale or lowest prices of the season to convince customers to spend their time and money at stores that just don’t do a good job of creating an ongoing relationship with their customers. Just as we saw that the multi-million dollar payrolls of the Yankees, Tigers, and others failed to get them into playoff contention, stores that feel they can only run more sale ads and more promotions don’t win over many customers in good times much less in a recessionary economy.
Granted we should expect sales across the board to slump, but it’s interesting that on the same day that Circuit City made its bleak announcement, I was in a Best Buy across the street and it was not only crowded, it was buzzing with customers throughout the store and at the registers. Costco doesn’t seem to have much problem with the economy. Even Wal-Mart, while experience less than stellar increases, is still reporting a positive sales trend on top a turnaround trend last fall. Publix food stores have gotten more aggressive with BOGO pricing and expanding its own brands, but it’s loyalty among customers has them spending more than last year on an ongoing basis. Walgreen’s is as aggressive as ever with it’s sales circulars, but it’s aggressive growth continues as it offers programs like flu shots and in-store clinics to keep the customers coming back every week.
What’s the difference? You got it, Joe. It’s branding. These stores continue to strengthen their brands with the customer and with their associates and then market themselves in a way that keeps their relationships strong. The history after the 9/11 tragedy showed that stores with the strongest brands continue to succeed in hard times. The history after the collapse of Bears, Lehman, and AIG will likely be the same. It’s time for some positive news--like the Rays and like the stores who succeed by building their brands every day
