Brands Go Overboard to Attract Customers

Firms Old Navy, Lush and Johnny Cupcakes cajole, harangue, pamper and feed shoppers.

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Fashion companies are pulling out all the stops to get shoppers’ attention — from having staffers hawk $2 tank tops outside Old Navy like they were old-time newspaper boys to lathering up passersby on the sidewalk with lemongrass-scented soap, as was the case with Lush on Manhattan’s Upper West Side store on Sunday.

And there are plenty more hands-on marketing techniques to come, whether its with multisensory branding, implementing augmentation reality online or some old-fashioned face time to brainstorm with potential customers, according to branding specialists and industry executives.

The moves are all aimed at reversing the downward trend in retailing that began over a year ago and is expected to continue through holiday. Even though consumer confidence has improved substantially since March, consumer spending figures do not reflect that upswing, according to Gallup’s chief economist Dennis Jacobe.

“There is general optimism about the economy, but the way people behave, which we track on a nightly basis, has not improved,” Jacobe said. “Individuals’ spending levels on average are down 30 to 40 percent compared to a year ago. That is a striking decrease, particularly when you discover even the upper tier of people have been affected.”

According to a recent Gallup survey, 33 percent of consumers said their reduced spending would be permanent and 20 percent said it was temporary due to factors like fear of unemployment. Some of the leftover shock from the financial crisis can be seen in lost wealth in the stock market, housing values and money for retirement, which is likely to have a pronounced effect on consumer spending down the road, Jacobe said.

Another determinant is the psychological effect the downturn is having on people — many of whom have never experienced a recession to this degree.

“Anybody that looks at this as largely cyclical or as the same kind of thing that happened after the downturn in ’90 and ’91 is mistaken,” he said. “This is not the same thing. This is different and the so-called ‘new normal’ for spending and saving is real.”

But that doesn’t mean shoppers are only driven by price, according to Ellen Ruppel Shell, the author of “Cheap: The High Cost of Discount Culture.” In an interview Monday, she noted the current economic climate has prompted many to reconsider quality versus quantity. Given that, she doesn’t expect consumers to spend their way out of this financial mess.

Meanwhile, many stores are merely treading water in a crowded pool of bargains.

“At this point, people are in a panic,” Shell said. “It’s really hard for us to innovate. So many retailers are in such disarray and are so concerned about losing customers. You need to be able to take a deep breath and not feel as though you are losing traction every month in order to innovate.”

That may be the case for some retailers, but others are trying to stoke creativity in different ways. More than 100 fashion types are expected for cocktails Aug. 25 for some recession-surviving brainstorming at Mau Mau Studios. Co-organizer Julie Crisman, who runs her own public relations agency, said, “Many have lost their jobs, are afraid of losing their jobs or are working with teeny tiny budgets in the jobs they have. They need to be creative to trade resources to get things done for free.”

Staffers in advertising, film, fashion and other creative industries turn up for a monthly informal breakfast at Katz’s Deli on the Lower East Side to talk about everything and anything. The location is meant to be counter to more predictable power breakfast spots like Balthazar, according to founder Noah Brier, director of strategic planning for the Barbarian Group, a digital services and creative agency. In 2006, he co-founded a monthly coffee hour called “Likemind” that is now held in 50 cities around the world.

Having attended last week’s breakfast at Katz’s, Doug Jaeger, innovation director for the creative agency Taxi Inc., said, “There is a real need for social interaction as people become more about computers and less about people. What’s interesting now is that because no one is spending money they are forced to be creative. It’s an exciting time in terms of how people dress and how they look.”

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