Treading water

 In Faith Thinking

The seasonally adjusted May retail figures show retail sales up 0.1% following a fall of the same number in April and 0.3% growth in March. Whilst the election result appears to have had a positive impact on consumer confidence the two reductions in interest rates show how fragile the economy is. Retail sales are effectively treading water. The government tax cuts will help but we must acknowledge how much the ‘new world’ is impacting on the way consumers shop. In the US Credit Suisse has identified that 6400 shopping centres closed in 2018 with a further 20-25% of all shopping centres set to close in the next five years. Rising online sales, falling disposable income with cost of living increases and the introduction of new currency options, including Facebook’s Libra, suggest continued retail disruption. The challenge for retail marketers is to continue to be relevant and to move with customers tastes and trends. After sales service, product quality, store presentation and effective communication strategies will be vital. For those in the ad industry there is a dilemma. Migrating from traditional tools. making sure our clients are digitally ready and acknowledging that marketing costs spent per dollars sold must decline. Advertisers must have websites which are current, relevant and talk to their customers. This means better content. Whilst agencies can do this the sheer weight of content will mean more clients will want to produce internally using their own resources and perhaps deploying teams away from catalogue and press production into more video and EDM activity. How agencies tackle this problem will be interesting but one thing is certain margins on content work will decline and a more streamlined service will need to be introduced by agencies to drive the creative process and help improve the communication value of content. Unless agencies can meet this challenge they will see their relevance continue to diminish.

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