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Dare we say the ?R? word? Recovery, of course

By Eric Holmen

The past couple of weeks have served to temper our optimism for an immediate recovery, particularly in the retail sector. July retail sales declined slightly ? by 0.1 percent ? despite the most consumer-visible government stimulus to date in the CARS program.

Consumer confidence also dipped after an encouraging rise in June and July ? 63.2 percent for August, according to the Reuters/University of Michigan preliminary consumer sentiment index, compared to 66 percent in July. 

But the overall picture is a bit rosier.

The leading economic indicators are almost unanimous in pointing toward an honest-to-goodness recovery, and in an economy that is dominated by consumer spending ? it accounts for 70 percent of all U.S. economic activity ? any uptick is indicative of, and governed by, positive consumer action.

Retailers, for their part, continued to express interest in mobile marketing strategies through the first half of the year, even as the economy remains shaky. It is those lagging indicators, including wage and employment figures, that will have the most effect on retailers as the recovery continues. 

But we all know that this recovery is not about lighting the fuse on a rocket. It is about getting a derailed train back on track, and ultimately back up to speed. That takes time.

The big question
A recent New York Times article quoted Art Hogan, the chief markets analyst at Jeffries & Co., posing a succinct and apt question about how and when the U.S. economic locomotive will start chugging along under its own power: ?When is the consumer going to take over from government stimulus??

Part of the answer may be, from the point of view of retail marketers, when we start expecting them to. 

The marketing community, particularly the retail segment that deals in direct consumer interaction, has spent the better part of two years framing every marketing initiative, message, strategy and budget in terms of the recession. 

We think it is time for a fundamental change in this attitude. 

We believe that the retailers most prepared to enter the recovery phase of this economic cycle are engaging in innovative techniques such as mobile marketing right now, before conventional wisdom and media consensus gives the green light on a full-fledged recovery. This reflects a willingness to embrace the future, to stop dwelling on the worst and instead plan for the best.

It is time for retailers and marketers to shelve the recession talk. It is old news. Really old. More than that, it is perpetuating a cycle of faltering confidence that can, in the worst case, sabotage a real (if slow) recovery. And no one wants that.

It is too easy, and too destructive to any brand to rely on knee-jerk deep discounting that assumes a persistent demand-depressed climate. It is too reactionary to think that the only appropriate response to a downturn is to cut marketing budgets and hunker down. 

Instead, we believe the most successful retail players will apply the hard-learned lessons of the recession to a robust recovery marketing strategy.

Value is a constant
The key phrase in the above sentence is ?learning the lessons.? We are not advocating a wholesale restoration of the marketing strategies of 2006. After all, things can never be the same. 

Every recession leaves a lasting mark on the economy, though whether that mark is a scar or a birthmark of a new age is determined in part by time ? acute challenges in the trough evolve into fait accomplis through the recovery ? but also by how well businesses adapt to new circumstances.

This recession, as deep and prolonged as it has been, will leave behind a lingering emphasis on value. Retailers will surely feel this the most.

Customers, holding tight to their purse strings, are not just seeking the bargain, they are expecting them. Retailers must direct their marketing efforts to showcase and create value, whether through direct value-creation efforts such as mobile couponing or through perceived-value initiatives including sponsored mobile applications.

Time to build relationships
There is an old restaurant saying that says you sell the sizzle, not the steak ? the idea being that the presentation and the experience are at least as valuable, or if not more, than the product itself. 

For retailers embarking on a recovery-based marketing strategy, that concept should be updated to emphasize the direct relationship with customers. 

Yes, a holistic experience is still important, but consumers want more than a show.  They want a dialogue, a tangible interaction with their brands and retailers. They want to reward trust with loyalty, and they value choices presented to them within the framework of an established relationship. 

Of course, the best way to develop these high-value relationships is through the mediums that encourage a high level of interaction ? mobile in particular.

Mobile marketing features a box full of tools perfectly suited to relationship building: opt-in methodology, one-to-one communication, interactivity, value-add applications, the possibilities are endless.

Effectiveness of emerging tech
These techniques only scratch the surface of what new media can achieve in the recovering economy.

Indeed, emerging channels will be, or at least should be, the foundation for many marketing strategies coming out of this recession. And why not? They are cost effective, offer unrivalled penetration and adoption rates, and produce high ROI, all in addition to building the kind of relationships that can yield expanded revenues over the long term. 

In the case of mobile, it reaches consumers immediately and personally, through the device they are likely carrying in your store right now. There is power here, and though retailers probably did not need a recession to recognize it, it certainly cannot be ignored now.

Going out on a limb
Forward-thinking businesses since the Great Depression have recognized economic crises as opportunities for advancement.

The list of companies that used innovative initiatives including new marketing techniques during downturns to gain market share and build their brand is a long one.

These companies all have one thing in common: they saw their competitors taking the conventional route ? battening down, preparing for the worst ? and instead went out and paved their own way to recovery. 

This time of upheaval is the perfect time to try a new online strategy, or embark on a cost-efficient mobile initiative. It is the perfect time to try new ideas that are long on potential and short on initial outlay, as these are the concepts that can serve as a base for future success ? in any economic climate. Consumers will respond to the chances you take now.

Recovery marketing is going to be just as important to retailers as how they weathered the recession. The latter is ? can we say ?was? yet? ? about survival, but the former is about jump-starting prosperity. 

It is about learning and loving the mobile channel, as it represents the future of relationship marketing. It is about delivering value in every way possible and creating worthwhile, welcome messaging and mobile applications. It is about preparing for the future.

The first step to getting onboard with recovery marketing is the big leap ? changing that recession-dominated attitude. 

Eric Holmen is president of SmartReply Inc., a mobile and relationship marketing firm in Irvine, CA. Reach him at .