Spa Marketing & Retail Trends

The marketing world in is broadly governed by a number of macro-themes: the impending American economic slowdown and the continued rise of interactivity, personalization and mobility of marketing efforts, fuelled by the evolution of digital technology. The coming year will also, if prior years are any indicator, witness small but significant leaps of innovation and several perception-changing strategies and tactics.

1. The American Economy
At the end of 2007, many economists had already indicated that the US economy was headed for a slowdown, if not a full recession. The Livingston Survey, a semi-annual sounding of several respected economists undertaken by the Federal Reserve Bank of Philadelphia, predicted in December substantially lower growth for the first half of 2008 than they had originally estimated (1.9% growth, revised from 2.9%). In such a situation, marketing dollars are usually the first thing to go. But, as marketing and advertising budgets get leaner, the focus on connecting with customers in the most effective possible way becomes absolutely paramount. Not just for retailers, but for every business. So, with a sluggish economy looming, we can expect new initiatives designed to maximize adoption/response rates and readily demonstrate positive ROI in the short term. Many of the campaigns that relied on mobile technology or that were based in web 2.0 fit this bill, and will enjoy continued usage and growth in 2008.

2. The Decline of Traditional Media Streams
It seems this particular topic gets more and more coverage each year- and will continue to, at least until the internet is reclassified as traditional media. According to Forrester's study of consumer media consumption trends, released September 2007, 26% of households are using DVRs, like TiVo, to skip television advertising, up from just 19% only a year ago. At the same time, 35% of households actively use MP3 players - like the iPod - avoiding radio advertising, and 52% of households are using broadband internet at home during typical television viewing hours.

We are in an age where consumers have unprecedented control over what sort of media they are exposed to, and, by extension, how much and what kind of advertising reaches them. Coupled with the well-publicized decline of newspaper circulation and advertising revenue, and the trinity of traditional mass media that was the basis of every marketing 101 textbook printed before 1996, "traditional media" is slowly tipping over into obsolescence.

3. Green Marketing
The practices of assessing environmental impact and promoting sustainability have transitioned from being exercises of goodwill to economic necessities. Many large multinational corporations are pouring significant resources (read: millions, or billions) into developing sustainability plans and practices, the marketing effect of which is readily translatable to brand image and overall reputation. Wells Fargo, according to data published by the Riskmetrics group, instituted a 10-point climate change action plan and dedicated $1 billion to sustainability initiatives in 2006. Indices like the Ceres, Inc. report on corporate governance and climate change rank companies based on environmental criteria- and with GE, DuPont and Cinergy leading their respective industries on the list. Poor performers are cast in a decidedly unfavorable light. Data sets like these are widely disseminated and available for public consumption, making them extremely significant from a marketing perspective.

4. Mobile Marketing
By combining demographic and media consumption data, SmartReply is forecasting that by 2012, 90% of the most active retail consumers will be unreachable by advertising via radio, television, and newsprint. Only five years ago, these were the main staples of the media mix for every major retail company. With consumers now demanding more control of the marketing messages they receive, and how companies communicate with them via individual accesses and controls, what better platform for reaching them than the ubiquitous mobile phone?

As phones have evolved rapidly into multimedia devices (think iPhone, the BlackBerry nation), their capabilities have opened unlooked-for advertising channels. Emarketer, a market research and trend analysis firm specializing in Internet and e-commerce, predicts that advertising on mobile phones and through web video viewable on mobile devices will triple in the next 3 years. The efficacy of webpage ads is consistent whether viewed on a PC or on a smartphone. SMS-based text advertisements and marketing campaigns are increasing in frequency and adoption. The coming year will also see a social-network approach to mobile marketing, incorporating group texts and friend-circle communication, hosted by savvy retailers looking to connect with their customers in real-time. Drew Neisser, CEO of, sums the mobile marketing revolution up nicely: "[it's] the missing link in personalized communications."

5. Social Networking
"The continued growth of social networking seems assured," says Debra Aho Williamson, eMarketer Senior Analyst and author of the new report, Social Network Marketing: Ad Spending and Usage, "unless teens stop social networking as they become adults." Indeed, eMarketer predicts that almost 10 million more Americans will use a social network in the next year (up to 56.9 million), a 5% increase of online users over 2007. Consequently, advertising spending on social networks will also increase, though perhaps not at the exponential rate witnessed in 2006: spending is projected to increase 75% to $1.225 billion in 2008 (compared with a 155% increase between 2006 and 2007). With the scope of the audience and the scale of the advertising dollars, the social network angle is still very much in play.

6. The Rebirth of Second Life and Game Marketing
"Don't ignore Second Life," says Eric Krangel, Reuters Second Life reporter. "Don't write it off. [This] is a tremendous untapped market that can be reached with savvy marketing." Second Life, once thought of as the new horizon of online marketing, has fallen onto disfavor in the latter part of 2007. But while some of the data associated with the virtual world is indeed pessimistic (9 of 10 accounts are inactive, according to the sheer number of subscribers warrants marketers' attention. The "metaverse" has approximately 1.2 million active members- who log in at least once a month- which represents significant buying power, both within the virtual realm and in the real world. As the online population tires of traditional social networking sites like Facebook and MySpace, Second Life, with its unique avatar-based interaction model, might just be poised for a renaissance.

Likewise, the increasingly interactive and realistic world of online gaming is becoming more attractive to marketers and advertisers. As World of Warcraft and the like are drawing thousands of play hours, the opportunity to reach the gaming demographic through integrated in-game advertisement grows commensurately. Offline, the unprecedented popularity and physical interactivity of the Nintendo Wii makes the new system an exciting tool for marketers.

7. Widgets, Other Service Marketing and More
Widgets, small software applications designed for integration with social networking home pages and PC/Mac desktops, are growing in popularity, thanks to the MySpace/Facebook effect and the new Vista operating system (which supports and encourages the addition of widgets). These gadgets are occasionally frivolous (random picture generators) and sometimes quite useful (real time weather updates, stock tickers), but are generally free to distribute. Attaching a brand to one of these little gadgets can provide access to difficult-to-reach audiences, and certainly represents a future avenue for PC marketing.

Other useful services not necessarily tethered to the computer are being provided to customers free of charge by forward-thinking companies keen on deepening brand loyalty. HSBC BankCab, for instance, provides free cab rides to HSBC customers in New York. Another US-based company is currently testing out a new group text platform for its customers through their cell phones, allowing participants to send text messages to groups of their choosing. These initiatives, like useful widgets, deliver tangible value to potential and existing clients without directly referencing a product or service, and create brand loyalty with each encounter.

8. Do It Yourself
Look out for more "self-serve" web-based solutions for businesses who want to create loyalty and the big brand image, but without the big brand spend. Programs like Voiceblast, a voice-marketing and loyalty tool, tailors the technological power of voice marketing to the small business, handing smaller companies the same tools as a multinational retailer. Unlike the big-spend mobile campaigns, Voiceblast aims to drive sales and profits and reduce cost per touch through personalized, highly effective voice messages for enterprises looking to deliver 100 to 250,000 voice marketing calls per month. This new breed of "self-serve" marketing tool allows businesses to upload their preexisting contact lists, upload or record a personalized message, and create an individualized campaign, including start time and date and message frequency, employing a do-it-yourself approach to campaign creation and implementation.

Projects such as these will enjoy success in 2008 and Holmen is steadfast in his prediction, "Progressive brands and retailers need to take advantage of the remaining mediums still at their disposal and gather these opt-ins and communication preferences, as by 2012, their customers will be very difficult to reach - even for an opt-in request. It will then be too late".



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