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Retailers Selling Compassion

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The Associated Press

Published: October 18, 2008

CHICAGO - Months before a financial implosion shook shoppers straight to their checkbooks, Saks executives realized a problem might be brewing with their holiday lineup.

The luxury department store thought its extravagant gift packages featuring foreign travel and celebrity chefs might seem out of touch at a time when the nation's economy was beginning to falter and even the wealthy were wary of what was ahead.

That's why this summer, more than halfway through planning the retailer's most important quarter of the year, the New York-based company switched gears and swapped elaborate trips for gift packages from which half the proceeds will be donated to charity.

"We really reconsidered and thought we need to be careful with that over-the-top message, because it doesn't feel relevant," said Kimberly Grabel, the senior vice president of marketing for Saks Fifth Avenue.

As banks collapse and investment accounts sink alongside consumer confidence, some of the nation's most venerable brands are struggling to strike the right tone for marketing and advertising campaigns amid one of the worst economic downturns in decades.

"From the wealthy down to the poor, everyone right now is feeling a little poor," said Richard Honack, a marketing professor at Northwestern University's Kellogg School of Management.

For many companies, the daily assault of dismal financial news is creating a high-wire act, forcing brands to debate whether they should emphasize daily discounts over decades of heritage or swap glamour for feel-good messages.

"It's just striking the right balance," said Ann Mack, director of trend-spotting at advertising firm JWT.

Just as promotions released in the weeks after Sept. 11 incorporated emotional and patriotic messages, today's fretting consumers are beginning to be bombarded with statements chock full of advice, sympathetic counsel and messages of so-called "rational guidance."

There's the somber:

"These are unprecedented and unsettling times for investors," opined Charles R. Schwab in a full-page ad published by the asset-management firm in late September in the New York Times, Wall Street Journal and USA Today. "... We recognize that many investors feel challenged at times like these and our priority is to be here to help you in the way that works best for you."

The cheerful:

"A new day, new ways to save," says a Target Corp. announcer, while a ponytailed girl bounces inside a backyard tent, which the retailer proclaims as the new family room.

There are also those that strike an inspirational tone. Among them is a new 30-second advertisement by Dunkin' Donuts that began airing this month showing dozens of people trudging up a steep hill symbolizing life's uphill battles.

"I think that it's incumbent upon any brand to make sure they're in tune with their consumers, that they're empathetic with what's going on in their lives and they're meeting a need," said Frances Allen, brand marketing officer at Dunkin' Donuts. "We wanted to remind everybody that we know what they're dealing with and we're there for them. We know they're hurting."

Others are opportunistic.

"It's one thing to bail out Wall Street, but who's going to bail you out?" intones an announcer promoting Denny's $4 weekday breakfast.

Some marketing experts, however, caution companies that have built their brands into household names to think carefully before changing their marketing focus in response to the troubled economy. That's because doing so could ultimately undercut decades of work spent building a brand from a commodity to a product shoppers are willing to pay more money to own.

"Many brands are like deer in a headlight right now," said Peter Madden, founder and president of AgileCat, a Philadelphia-based branding and advertising firm. "Strong brands are built from strong messaging that's consistent. It's a really bold move to just jump out there and say, 'Before we were one thing, and now we're going to be something different.'"

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