Tactics to Combat Poor Economies and Financial Data Woes

Through my research, I am discovering more ways that retail groups (and specifically, Corte Inglés) have attempted to combat poor economies, and consequently, decreases in sales. In my last post, I discussed the current economic state of Spain and Portugal, which has been a significant challenge to Corte Inglés and a hit to their profits. When economies are in crisis, consumer spending decreases as the population tightens their wallets and become more financially conscious. However, retailers such as Corte Inglés use various tactics to motivate consumers into purchasing their goods and services. One is to decrease prices on some of their goods (Corte Inglé cut prices on 5000 of their products by 20%). For those that are financially aware, this decrease in price serves as an incentive to come into the store and benefit from the savings. Once in the door, company’s hope that the consumer will perform impulse buys and purchase other goods and services that they had not originally intended. Hand-in-hand with decreases in prices is increased promotional campaigns to raise more awareness of these new deals. In 2012, El Corte Inglés decided to release a campaign touting how they offered the lowest prices on 4500 products such as bread, milk, and hake. These campaigns of course also focused on the quality and prestige of their products, as did the spring campaign with Beyoncé. Another technique is to offer personal payment options, such as Corte Inglés’ where the customer can pay their balance over a maximum of 36 months, starting at 30 EUR a month (close to 40 USD). Also, offering “satisfaction guaranteed or your money back” options help to add incentive and strengthen the bond, satisfaction, and confidence between the consumer and the business. Other services that cater towards pleasing the customer such as adding restaurants, shopping list services, and home deliveries can catch the attention of the potential client and bring them into the store. And finally, utilizing mobile technology can help combat poor economies. With the shift towards mobile technology, brands and retailers are attempting to tap into this new potential for advertising. The introduction and popularity of smartphones have changed the way people worldwide shop and connect. A study in Spain showed that 56% of smartphone owners use them to access the Internet daily, 86% of consumers took notice of mobile ads, and 68% used their devices to search for a product after seeing an offline advertisement. It also increases accessibility to the company, allowing consumers to utilize clickable phone numbers and location based services. Consumers are more familiar and comfortable with technology than ever before; therefore, making a forum available for customers to purchase goods and services on their personal devices is highly advantageous. The ability for consumers to access a company’s products from their mobile devices (wherever that may be), allows for greater exposure to the company and the increased probability of online sales. As a result of this movement towards mobile technology, department stores such as Corte Inglés have invested in mobile sites, where consumers can access their webpage into their handset browser or smart phone. Mobile shopping allows for an enhanced experience for online shoppers, permitting them to browse and buy products. Specifically for Corte Inglés, their mobile site contains a scrolling image carousel, which displays and continuously rotates product images on the home page.

 

Also, on an unrelated note, I’m noticing that attaining accurate and uniform financial data is trickier than I expected. Part of the complexity arises as a result of Corte Inglés’ many business lines–they not only operate department stores, but also supermarkets, convenience stores in addition to financial, travel, and insurance services. This can make narrowing down and finding complete data for a single business line just a bit harder. I was fortunate to find financial reports for El Corte Inglés that included the category “Financial Year Result (Profit) by using ReferenceUSA from the Swem Library Database, but unfortunately this is for the entire group, not a specific division. Since I am focusing on a single component of the El Corte Inglés group–their hypermarkets, which is a combination of a supermarket and a department store–I am searching for data that does not include the other categories. In my Marketing Plan Objectives section, I want to include a bullet on what I believe an attainable goal should be for their net profit. However, by including a number that is for the entire group, it makes it slightly less unsubstantiated in my view. Ideally, I would like a numerical value that is specifically for the industry that Corte Inglés would be expanding to a foreign country so that when the time comes to judge its success, there would be a stated value. Maybe I’m being too picky…

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