Tesar-Reynes

With the holidays around the corner, how will advertisers counter effects of a slumping economy in the most important shopping season of the year?

According to a Times article today, it all comes down to one word – price.

The article talks about how consumer psychology is changing. Nowadays buyers are skipping “luxury” items from Macy’s in favor of the practical buy from Wal-Mart. When you’re constantly bombarded with messages of a slumping economy, it makes you think twice about reaching for that $100 sweater from Ralph Lauren.

Consider Tim Calkins opinion, a professor of marketing at Northwestern’s Kellogg School of Management:

“The brands that will do well in this environment are your low-priced brands, brands that are very cheap and value-driven. The brands that will struggle are the brands that ask people to step up, because people are not inspired to do that right now.”

Even Target, who began as a competitor to Wal-Mart for value-driven products, has struggled with an image their wares are suddenly more expensive. Can you believe that? Target has done such a good job marketing their brand as affordable high-end items that now people believe they just sell high-end items. As a result, advertisers for Target are pushing price, coupons and bargains in their creative.

The article surmises this trend in the markets won’t last forever. I don’t know about that. Everything I’ve heard says we’re at the beginning of a recession, not the end of one. Why would you expect consumer behavior to change after just one season?

In the past, I could rely on my being a college student to catch a break on cheap Christmas presents (Sorry Mom.) Now that I’m done with school, that argument no longer holds water.

Maybe I’ll just blame the slumping economy this time around?