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You Can't Cut Your Way to Growth



Henry Ford said that “a person who stops advertising to save money is like a person who stops a clock to save time.” The pressure to reduce expenses at retailers is real but at what cost?

The data and technology exists today to generate very sophisticated measurement of the effectiveness of media investments. Numerous companies make their living at doing only that as well as numerous job titles within retailers who focus on performance analytics rooted in ongoing testing. One wonders how much influence all of this intensive analysis is having on executive decision making.

A recent article from myretail.com reported that Nordstrom cut their direct mail program in an attempt to get the program online and reach customers faster. Their co-president said “We’re making the changes we believe are necessary to drive our top line sales as we continue our aggressive focus on expenses.” The Nordstrom co-president went on to say that the shift caused a reduction in foot traffic at all of its stores as many customers rely on receiving those rewards by mail.

Print media solutions of direct mail and targeted inserts have long been an anchor in successfully driving store traffic and sales. A Nielsen Homescan survey concludes that about 80 percent of U.S. households still use traditional printed sources like circulars, and that print is the primary medium used by consumers for information about stores, sales and specials.

Finding the tipping point between cutting costs while still driving traffic and sales is delicate work but companies like planitretail make our living at doing just that. We have plenty of examples of significantly improving retailers’ return on investment by generating cost savings without negatively impacting sales and often increasing sales.

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Windsor, CT 06095

860.687.9900