Retailers Work Web 2.0 to Craft Their Own Bailout For Fall and Holiday 2008

Written by Amanda Ferrante

Retailers are expecting Web 2.0 applications to “work it” to help pull out a decent holiday season amid a tough year. In fact, many major retailers are already in full swing with fall campaigns that stressing innovation and customer engagement to spark a bleak economy.

“Value-added services like how to’s and customer product reviews are now considered the norm in the retail industry,” says Doron Levy, president of Captus Business Consulting. “Customers are always looking for resources, especially when it comes to higher priced products, such as cosmetics and electronics. These services build confidence for the customer and can drive them to purchase based solely on the extra information they receive.”

Saks Fifth Avenue is taking Levy’s advice to heart. As part of its fall promotional campaign, Saks Fifth Avenue is pulling out an arsenal of Web 2.0 tactics to engage and entertain online customers. Saks.com offers a video catalog called “Fashion in Action,” which treats cosmetic shoppers to step-by-step instructions on proper skin care, makeup application, and combining scents. The new element is designed to give customers a “real sense of the product,” which is a big step forward in the Web 2.0 world, where video is vital.

Among other new Web features, Saks.com developed the Fashion Incubator, “as the source for what’s new, what’s now, what’s next.” Here customers can read up on new featured designers, and shop their collections.

Many retailers have already rolled out the Christmas allocation, while others will implement right before Halloween to try to get a jump on sales. Macy’s Inc. and Costco have already put out holiday merchandise. “There will definitely a sense of Christmas in the air much earlier than previous years,” says Levy. “It will be interesting to see the circulars this seasons and the aggressive promos and price reductions to get inventory moving.”

Levy says Wal-Mart and Target will be aggressive players this holiday season—Target will offer a gift card that doubles as a digital camera.

Hot products make the difference
Since prices have come down on electronic gadgets like MP3 players, smartphones, and LCD TVs, analysts say these items will be hot gift choices this year. “Prices have come down on many of the televisions, making them more accessible to more economic groups,” says Levy. “Video game consoles will also do well, especially since there is improved allocation on Playstation3 and the Wii. Blu ray disc players have also seen some price reductions.”

As part of its marketing campaign, Bloomingdale’s is integrating music into print advertisements, email messages, catalogs, Web site, shopping bags and window displays, bringing the concept to its customers across all channels. The retailers will offer live performances by musicians and bands in stores, in addition to selling artist CDs and DVDs distributed by the Sony Music Label Group division of Sony BMG Music Entertainment.

Jack Hruska, executive vice president for creative services at Bloomingdale’s in New York told The New York Times the music campaign was inspired by the recent fashion trend for clothing inspired by rock and roll, like “rocker t-shirts, skinny pants, leather and siren pants.” But the campaign isn’t limited, as it will include genres like jazz, show tunes, pop and classical in the campaign. Bloomingdale’s plans to include music in its Christmas campaign as well, which is scheduled to start November 20.

One analyst says retailers need to focus on their customers rather than getting “caught up in all the teenage angst of the financial, commodity, political circus.” “Those who put their nose to the grindstone, work the long hours, connect with their customers and shut their mouths about anything related to disappointment, lack or worry will do fine,” says Bob Phibbs of The Retail Doctor.