JEM Retail Consultants providing services in buying and merchandising, Programme Management, IT services and Logistics & Warehousing.

Monday, 11 November 2013

It's The Most Wonderful Time of the Year - To be in Advertising!

What does Christmas mean to you? Kids jingle belling and everyone telling you "Be of good cheer" or a bonanza for advertising companies promoting images of size zero models in skimpy underwear, impossibly attractive men posing as Aladdin and cartoon animals exchanging presents in the snow?

According to market analysts at Neilson, retailers will throw off the cloak of austerity by spending £390m on advertising over the last three months of 2013. John Lewis launched its campaign on Saturday night, paying £750,000 to take over an entire ad break during the X Factor. Apparently a single ad slot for the final will cost £180,000 despite steadily falling viewing figures indicating that the adverts are probably more entertaining.

Much of the discussion in the press is about the spending on TV advertising going up year on year and a move to social media to engage the consumer. The John Lewis offering, for example, was much anticipated by unbranded ads fuelling Twitter traffic under the hashtag #sleepingbear. But will the sight of Rosie Huntington-Whiteley prancing around in mashed up scenes from fairy tales (or the opportunity to name the Westie on Facebook) reverse 9 successive quarters of falling clothes sales for M&S?

"We think" says Steve Smith from Asda, "it's more important to invest money directly into lowering the prices of all our products instead of producing costly campaigns that just keep the ad guys happy". Of course this could just be sour grapes following last year's ill-judged campaign (more than 600 complaints to the advertising watchdog) but a recent online poll suggested that nearly two thirds of us agree and would rather see the big retailers giving money to charity than spending it in this way.

Having worked at the John Lewis Partnership I know they invest both money and partners' time doing all sorts of great things for community projects. Personally I would far rather see them use the money to do even more of this work than spend it on what looks remarkably like a remake of Watership Down with the strange addition of a bear. As great as the animation no doubt is the whole thing left me (and 68% of us according to another poll) strangely unmoved.

One important point to make here is the reliance on this quarter to make or break profits. In my "old school" merchandising training I was taught two things: spread your promotions over the year thereby reducing reliance on any one period; and don't mark down (people will just panic and buy late in the quarter). I see little evidence of good strategic planning and retailers holding their nerve.

An expensive TV advertising campaign is a poor substitute for a great product range and excellent customer service. Ironically this is another reason that the John Lewis campaign is lost on me: I would have shopped there anyway as they have products I want to buy, when I want to buy them. All the advert has done is to ensure that I will record anything I want to watch on ITV so that I can skip the very thing the retailers have spent so much money on.

So do you look forward to the seasonal tradition of the blockbuster adverts or would you agree that the whole thing has got out of control?

Bah, humbug!

Written by Erica Vilkauls: Director JEM Retail Consultants

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