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Using Cause Marketing to Preserve Retail Pricing Power

The Consumer Wars have been fought, and frankly, Consumers won. In the process, retailers ceded their pricing power and maybe their sustainability. Can cause marketing come to the rescue?

That question came after reading the unsigned editorial at the left in a recent issue of Outdoor USA Magazine, a trade publication of the outdoor retailers and manufacturers industry. The editorial is specifically about the dangers to outdoor retailers of using Groupon. But at a broader level for retailers it's really about preserving brand, margins, maybe even the business itself in this post-Consumer world.

Groupon really isn’t the problem so much as it is the symptom. After-all retailers have had deep-discount sales promotions in their arsenal for generations. Instead, Groupon is another sign that retailers don’t have many weapons left in that arsenal to preserve pricing power. Opines the magazine’s editors;

“At the end of the day, marketing channels like Groupon and Facebook Deals are really just new version of old traffic triggers like the ‘one-day only’ sale. And just like those old-school traffic-driving gimmicks, they tempt retailers into a discount death spriral.”
For all the similarities between Groupon and old-school One-day sales, what’s different is that consumers can now walk into a retail establishment, check the price, pull out their smart phone, scan the barcode using a $5 app and instantly see what the best price online is for that exact item, and then order it. In the post-consumer world retail shops are, in effect, now showrooms first and sales floors second.

Cause marketing can’t necessarily save retail. But it can help.

For instance, both REI and The North Face choose a cause marketing promotions, when using the nascent Facebook Deals, the editorial reports. Instead of offering a discount or a freebie, both companies instead donated $1 to charity when customers checked in.

What do you think? How can cause marketing help retailers remain viable in a competitive marketplace?

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