Saks Fifth Avenue is reporting that luxury is back. Tell your neighbors. Sales are up and discounting is down at Saks, even online. Instead of just buying individual items, their customers are back to buying lines of merchandise.
There seems to be a bit of bifurcation going on, as we discussed last week in my marketing class. At the same time luxury buyers are shopping more, so are buyers in the middle, but they're buying more products at the lower end. Which is why Saks is also expanding its off-price Off-Fifth chain.
While all this is going on, advertising agencies are getting worried again.
The c.e.o. of French-owned Publicis, the fourth-largest international ad agency holding company, is about to tighten its belt in anticipation of another potential slowdown in the business. So is Leo Burnett, the huge Chicago agency owned now by Publicis. They're watching everything, from purchases from vendors to the hiring of freelancers.
The next question is, what can we expect in the creative work that anxious ad agencies turn out?
For one thing, I would expect more conservative executions. Television commercials that are "closer to the ground", with more announcers doing the heavy lifting of information. Less humor, more boring. Print ads that are in one of two camps: either more direct, with louder, more strident claims; or more spokespeople. Uggs, for example, is using New England quarterback Tom Brady for its new multi-media campaign. We'll see him ugging around with his dog.
I would also anticipate an even stronger shift to social media, not because it's more effective, but because it's so much cheaper. A way to reach more eyeballs, potentially, at a lower cost, making a media plan look more responsible. Even though there's still no evidence that social media is nearly as effective as traditional media.
How will the creative people at ad agencies feel? A little tense and anxious. More pressure to hit home runs, and a shift in how a home run is defined. At many agencies, that means anything that pleases the client. Look for larger headlines, copy about product features, and silly claims. Less subtlety.
It all adds up to a complicated time to get in the advertising and marketing business, best if you have a creative mind and have learned all you can. But you'll have to work at it. Bosses are tougher, less likely to take chances. Yet companies need help, and they know it.
Ordinary marketing is a luxury nobody can afford these days.