Don’t tell anyone, but if you cut me, I still bleed a little Walmart blue. After working there for 18 years, can you blame me? Walmart does much of its teaching through storytelling, and in 2008, when times were tough for the consumer, an executive stood up and told the parable, “The Man Who Sold Hot Dogs.” Indulge me, please:
There was a man who lived by the side of the road and sold hot dogs.
He was hard of hearing, so he had no radio.
He had trouble with his eyes, so he read no newspapers.
But he sold good hot dogs.
He put up signs on the highway telling how good they were.
He stood on the side of the road and cried, “Buy a hot dog, mister?”
And people bought.
He increased his meat and bun orders.
He bought a bigger stove to take care of his trade.
He finally got his son home from college to help him out.
But then something happened.
His son said, “Father, haven’t you been listening to the radio?
Haven’t you been reading the newspapers?
There’s a big depression.
The European situation is terrible.
The domestic situation is worse.”
Whereupon the father thought, “Well, my son’s been to college, he reads the papers and he listens to the radio, and he ought to know.”
So the father cut down on his meat and bun orders, took down his advertising signs, and no longer bothered to stand out on the highway to sell his hot dogs.
And his hot dog sales fell almost overnight.
“You’re right, son,” the father said to the boy.
“We certainly are in the middle of a great recession.”
We certainly are in the middle of… higher fed rates. An annual core CPI that keeps rising. Consumer confidence plummeting. It’s time to prepare for a sales slowdown — something we haven’t had to deal with in some time.
What to do? Well, there are two lines of thought:
1. Cut costs, streamline and hunker down.
2. Get creative, invest strategically, adapt and be willing to course-correct.
No. 1 is easy but painful. Get your P&L and calculator out and start cutting. Slash e-commerce, promotions and ad spend; make the hard personnel decisions, and don’t forget to table those innovation initiatives for the foreseeable future.
No. 2 is much harder but much more rewarding. It forces you and your team to utilize creativity, dig deep into consumer mindset and apply real-world experience to find a better path to thrive within the realities of the day.
It might go against your first instinct, but I know from experience that going on the offensive during a recession is the only way to go to maintain market share.
A robust omnichannel strategy will stretch your marketing dollar, giving you economies of scale to retain the loyalty of current customers and gain new ones, not to mention distance yourself from your competitors.
Where to start? Gain a strong understanding of your target consumer’s behavior shifts; this is absolutely critical. Find the opportunities. While total consumer spending is trending down, some segments have maintained and even increased their spending.
Next, ask, “Am I doing enough to lean into value, loyalty and performance-based deals?” (That’s what retailers are focused on, and you need to be, too.) Our MPG Possibilities group recently partnered with a health and wellness products manufacturer struggling in today’s volatile marketplace. We had to dig deep into the data and use some creativity, but we came up with an Omnichannel Strategy and Activation plan that’s now driving loyalty and high engagement.
One last thing: Don’t walk away from your innovation pipeline. You’ll need those new brands, formats and packaging if you’re going to continue to provide value versus your competition.
Yes, we certainly are in the middle of a downturn, so what strategic decisions will you make? Maybe schedule time to sit down with your team, have a hot dog for inspiration (don’t forget the brown mustard).
As others pull back, continue to drive forward. And take a cue from Sam Walton on the best way to approach a recession: “I was asked what I thought about the recession. I thought about it and decided not to take part.”