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Marketing Matters: Marketing in a Shrinking Marketplace

Donna Barson

It seems you can’t pick up the newspaper today without reading about a company merging with or buying another company. But behind the headlines and monetary value of every deal is something similar, and potentially ominous, for every marketer: a rapidly contracting retail marketplace ruled by a growing number of super companies. How is a marketer to cope?

Reality Check

If you’ve been cowed by the volatility and uncertainty of the marketplace over the past few years, and are hunkered down in your office hoping that things will improve, it’s time to wake up and smell the competitive coffee. More mergers and acquisitions are on the horizon.

Survival of the fittest in retail is only going to continue. This means that weaker retailers—possibly some of your retailers—are going to succumb to the stronger. But it’s not only retailers that will die out—entire companies, formats and industry segments will go. So look for more seismic shifts.

What does this mean? Simply, it means that an ever-dwindling group of retailers will gain more and more control of markets, both domestic and foreign. There could be less shelf space for your product in your traditional distribution channels because of this merger/takeover fever. Additionally, these combined retailers might be looking to market their own private label brands or exclusive brands.

Finally, don’t depend on former consumer loyalty to rescue you. Consumers are becoming more and more uncertain, and will flit from brand to brand until they find the best one for them. Such previous marketplace touchstones as demographics and lifestyles are fading, and will continue to fade in the face of what some are calling the multi-faced consumer of today.

Yet, conversely, consumers will continue to call the shots. But a fickle and hard-to-define consumer means that every point-of-contact with them is critical; every interaction, if not handled properly, could be your last.

The bottom line is that marketers cannot hope for a calm business landscape. Uncertainty is, and will continue to be, the name of the game.

But there is hope.

Marketing Matters

The new retail landscape, while tougher to negotiate, also provides the savvy marketer with new opportunities. Marketing does indeed matter.

First and foremost, marketers must create their own unique niche so that consumers are willing to follow the product in the event a retailer is lost. With so many products fighting for increasingly limited shelf space, your product must stand out. This means two things: in addition to delivering what it promises—performance—your product must be distinctive in other ways. Packaging and innovation are two obvious areas. The days of sticking a product into a dull cardboard box without promoting benefits are over.

Next, marketers must continue to develop new products. This has a dual benefit: retailers will find it difficult to cut shelf space of innovative new products and consumers will be in a state of anticipation over what comes next. Beauty consumers like newness. An ancillary benefit is that a company that continues to develop products with buzz can garner great publicity.

Third, marketers must work with retailers to stimulate sales. Of course, this has a double benefit, too; by stimulating sales of a certain product, it increases consumer traffic and other sales in general.

Marketers must become more detail-oriented and use the new devices at their disposal. New analytic tools are emerging almost daily, making processes once considered impossible, possible. Thus it becomes practicable to construct a finely detailed model of your typical consumer.


Speaking of the consumer, how should you treat this creature who has more riddles than the Sphinx? Marketers should view today’s environment as an opportunity to get closer to their consumer.

  • Set up a loyalty program. Reward consumers for their patronage. Show them that you appreciate their support.
  • Establish an electronic newsletter. Stuff it full of product news, new product teasers, and special coupons and offers that only newsletter recipients are eligible for. Create lots of buzz for your products.
  • Partner with retailers to offer special values, events and promotions that bring consumers to their stores. Treat retailers as equals—not somebody you’re forced to deal with.
  • Develop good relations with beauty editors and get more exposure for your products.
  • Employ an aggressive sampling program to encourage trial of your product. Seek out non-traditional venues for sampling. Offer samples of a men’s moisturizer at a large home store. Giveaway samples of sunscreen at a tennis tournament. Why not?

Marketers will be challenged in the future if they are not prepared. Flexibility and adaptability are necessary. For example, one major drugstore chain has established some expanded beauty departments on the East Coast complete with knowledgeable beauty advisors, and they carry some brands not typically found in drugstores. This could be an opportunity for added exposure for your brand.

Product performance is key, and one of the best ways to secure additional shelf space is through innovation and hype. So let’s see more of the great products that this industry can turn out.

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