The 2016 holiday retail numbers were disappointing for retailers like Macy’s, Kohl’s, and Sears. Despite large gains from the shift to shopping online this season, Macy’s has announced it will shutter 68 stores. Sears has announced it will close 150 stores. While the recent jobs report showed a gain of over 150,000 jobs, and the unemployment rate is the lowest since 2008, the forthcoming loss of over ten thousand retail jobs and the lowest holiday hiring rate in retail since 2008 suggest an acceleration toward the inevitable. But here’s the good news, it need only be a recession and not the death knell for traditional brick and mortar retail.

Retailers gave away the store to get consumers inside. Margin-eating price promotions killed profit. Instead of chasing promotions, having a compelling purpose story is a better reason to drive consumer traffic

Dick’s Sporting Goods is actually opening new stores in 2017 after having a stellar 2016 that saw huge gains in online sales. Consumers don’t want to stop shopping, they just want to do it differently. We have very successful examples of how to win with purpose. We already know consumers are brand promiscuous, but that they prefer brands that contribute to society in a meaningful way. We also know that while they aren’t afraid to shop online, they still crave tangible experiences that go beyond traditional sales interactions.

Here are 5 tips CMOs and retail brand managers can use to prepare for the oncoming retail recession using purpose.

1. Make purpose an investment in your consumer. Dick’s Sporting Goods has been recession-proofing itself with a major investment in e-commerce. Simultaneously, Dick’s has heavily promoted its purpose (to make sports matter). Tactically Dick’s wants to save youth sports. Rightly so! Active youth are happier, healthier and youth sports are an integral part of community life. What’s more, they are the source of Dick’s future customers. So just as you are investing in your customers online, see your investment in purpose as a similar investment.

sportsmatter

2. Look for a purpose inside – you may already have one. REI asked it’s employees how to approach holiday which lead to the wildly successful #OptOutside campaign. Remember, purpose isn’t a cause campaign–it’s about promoting the highest level contribution your brand can make to society. Chances are your employees can help you articulate it, quickly and efficiently. Are the majority of your store associates in an area impacted by natural disaster or climate change? Do your customers use your affordable apparel to ‘dress for success’? Do you improve the lives of your manufacturers? There’s a purpose there waiting for you to start branding around.

3. Fake it until you make it – tactics help you get started. There’s a reason “buy one give one” is a tactic consumers love, and there’s a reason why more than one brand uses it (Toms, Warby Parker). It works! If you feel you don’t have time, maybe you can evolve your purpose from your tactics later. Just get started. Also, this approach pushes you to identify communities in need and start serving them right away. Don’t know which contribution you could make that would matter most to your customers? Ask your associates. If your stores employ a lot of veterans…if your stores are in an area impacted by natural disaster….you see where I’m going with this.

4. Cut the promotions and tell more purpose stories. Purpose branding will lead to better margins. Funny thing is more consumers opened their wallets this holiday season than expected due to higher consumer confidence and low gas prices, and still brick and mortar retailers didn’t always benefit. A simple reason, retailers gave away the store to get consumers inside. Margin-eating price promotions killed profit. Instead of chasing promotions, having a compelling purpose story is a better reason to drive consumer traffic, like Patagonia did when it donated its entire Black Friday sales to environmental grassroots organizations to the tune of $10 million.

5. Use what you’ve got. The strength of every retailer is also its weakness amid changing shopper behaviors, physical locations. Consider this though: you don’t have to go out and find a grassroots army to promote your purpose, you’ve got thousands of associates. You don’t have to go out and find a community space, you’ve got one. And if you’re really lucky it’s smack in the heart of the community you want to serve. If you’re also a retailer/manufacturer like say Shinola or Filson then you have a made in America story, and a jobs story to tell already. If your store has thousands of products, chances are some are purpose-driven brands, too. 

Parlay with the merchandisers and make room to feature one or two purpose-driven brands. Make it a pop-up brand in limited quantities and locations, as Target successfully did with fashion label collaborations. Tell the purpose-driven story in your circulars, on your social media, and with a special in-store position. During promotion periods or holiday, tell the impacts, perhaps in a short branded film. Tell their story, elevate them! In turn, it will elevate yours.

Joel R. Johnson is co-founder and Chief Strategist at Admirable Devil, a purpose driven ad agency.

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