The recent trend in the home furnishings space has not been rosy. Weather crippled January in most sections of the country. Presidents’ Day was underwhelming but still generated results. Traffic is down while tickets are up or traffic is flat while tickets are down. Consumers who would buy $5000 items are buying $2500 items and consumers who bought $1000 items just aren’t buying. Interest rates haven’t dropped and financing and credit card charges are shrinking gross margin. Seems like the pandemic joy ride is a distant memory.
The 2008 recovering ad executive version of me would know exactly what could turn the tide. Run a high impact mailer giving your best and most long term customers an offer they couldn’t refuse. Whether it is would be the Factory Authorized Manufacturer Savings STOREWIDE or THE BIGGEST OFFER IN OUR HISTORY WITH 4/5/6 YEARS INTEREST FREE or BOGO 1/2 OFF events saved the quarter, month or even year. So what if the ad expenditure increased by 10/20/30% for that month it produced 40/50/60% more than everyday advertising. That recovering ad executive circa 2008 is realizing something —- that philosophy ain’t it.
The long term financing mailers runs far this year? Down 20/30/40% verses last year and the last year was down from the year before. The BOGO 1/2 off? Well, when they say only want one item that smoke and mirror isn’t giving the same ROI we used to see. Warehouse sales? Those are down too. Sooo…now what do we do?
1 – Spread the Wealth
The spend for these “BIG” events is not wrong relative to the overall yearly ad expenditure. We need to start treating our ad budgets and approaches as a 401K. Pick out maximum amount we want to contribute in a year that makes sense in our financial future and hopefully our manufacturers help contribute some to make it go further. We then take that amount and spread it out equally over our 12 month expenditure to allow our valleys to be not as low and our peaks to be higher. Overtime the investments will grow and predictability of budget will help balance the P&L.
2 – Digitally say goodbye to display and hello to video
Not to get completely technical here but the internet browsing history methodology of advertising is going away. In most cases it has been gone but this is the year. Display and what we have come to know about it from our digital partners in all facets is a wasted expenditure. We have already begun saying good bye to it and will in more earnest start that trend to be gone completely by the end of Q2 2024. Video is the future through closed platforms. Whether that would be YouTube, Connected TV, Facebook, Instagram, TikTok or media owned distribution that is how our message and targeting will cut through the clutter.
3 – Diversify your digital landing spots
With less demand it has put extreme amounts of pressure on SEO. With those pressures in SEO it means we are not being found as prevalent as we might want to be. Creating specific, unique digital environments to move specific categories gives us a chance to win locally. Want to feature outlet product? Create a ABCFurnitureOutlet.com or your main CityFyrnitureOutlet.com. Want to sell more mattresses? Set up a ABCMattress.com or CityMattressStore.com. It will create cost and some more work but it will give a natural organic lead in via SEO but also gives a unique landing spot for all advertising.
These are not going to be circa 2007 fixes. To be honest, if that fix is needed for you today then the programs you ran in 2020-2022 didn’t produce enough to make you weather this storm of today. This approach will help you prepare for the future and live in the present.
