Shop Talk

Retailers, consumers and prices

Check Out Line: Retailers’ ad strategies face “Tipping point”

September 18, 2009

newspaperCheck out the quickly shifting media landscape putting retailers’ ad strategies at risk.

In a research note this week, Credit Suisse analyst Michael Exstein examined what changes in the media world mean for retailers who are used to reaching consumers through traditional channels — like the newspaper.

In the past five years, there has been a modest shift from print toward digital media, but Exstein warned that: ”We may in effect be reach a ‘tipping point’ where past media strategies will no longer be sustainable.”

Promotional national retailers that cater to a younger demographic and rely on national media to communicate to customers may be most exposed to changes in the media landscape, he said.

“This is a particularly acute problem for retailers that are used to (some would say dependent on) driving sales and marketshare through promotions such as Target, Kohl’s, Macy’s, and JCPenney,” he said.

“How will they promote in the future if the Sunday newspaper can not be counted on to distribute an insert or an television network can not be counted on to deliver an audience at a specific time/day?”

Retailers like Target that have a large number of younger shoppers — shoppers who rarely, if ever, read a newspaper and instead spend large amounts of time using Facebook or Twitter – there is less time to respond to the changing way consumers consume media, he said.

But retailers with older demographics – like Bon-Ton, Dillard’s, JCPenney or Macy’s – may have the advantage of at least being able to follow the lead of other retailers, who will need to move swiftly to respond to the shifting media landscape.

Also in the basket:

Estee to end wholesale distribution of Prescriptives

Hemlines heading way up in spring 2010 fashions

Kraft may need 850-900p to swallow Cadbury

Pilgrim’s Pride files Chapter 11 plan

(Photo: Reuters)

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