As a veteran of the surf industry and founder of Sunnyside, a marketing agency that works closely with surf and coastal lifestyle brands, I’ve had the unique opportunity to collaborate with some incredible industry leaders.

This year has been tough for many, especially in the retail space, with so many external factors disrupting plans—everything from economic uncertainty to shifts in consumer behavior. But in times like these, I believe brands that double down on their core strengths and stay the course can come out stronger on the other side.

To dive deeper into how endemic brands can navigate these challenges, I sat down with Ian Stewart, CMO of Xcel, as someone who has been through it all but has continued to innovate along the way.

We talked about the current state of the industry, why brands should continue to invest in marketing during tough times, and a few key tactics leaders can use to maintain momentum and build loyalty with their customers.

Matt: So here we are. The economy hasn’t fully rebooted, consumer spending is timid, political outcomes are uncertain, and capital markets are dry. Without doubt the toughest year for many consumer brands in recent times, with e-commerce particularly hard hit. 

Ian: The surf industry is facing all of this. On top of that, we’re feeling the afterburn of ownership changes and inventory levels remain high. Discounting is rampant and consumers are sitting on seasonal items they scooped up for cheap earlier in the year. 

Matt: Talking with most of our clients, the pressure is on to cut back on marketing. Of course, if you have to choose between payroll and marketing, people come first. And if sales are down, budgets need to be adjusted accordingly. But history tells us that these are the exact moments to maintain spend, refine tactics, sharpen the message, focus on your core customer, and build loyalty as we ride out of it. 

Ian: We’ve been here before. Studies from past recessions, from as far back as the 1920s and as recently as 2008, show that brands that spend on marketing through tough economic times come out with at least a 20% increase in sales relative to pre-recession levels, compared with brands that cut marketing and saw up to a 10% decline in sales. The opportunity to capture share of voice and share of market, versus losing visibility and momentum, is a motivating strategy. But it takes a brave leadership team. 

Matt: Right. Consumers are spending, but they are spending on increasingly expensive necessities and pulling back on things that aren’t essential right now. They are more price sensitive, more cautious before buying, and definitely looking for brands that offer value. 

As we look for holiday spending to (hopefully) kick in, here are three things a brand can focus on today and the tactics to deploy to navigate these uncertain times. 

1. Focus on Your Core Customer

Matt: Focus on the core customer – the ones that love you the most – with retention tactics and enhanced loyalty programs, particularly going into a noisy holiday period. A recent study showed that a 5% increase in retention can lead to a double-digit increase in revenue.

Ian: That’s key. Plus, it costs four times as much to acquire a new customer as it does to keep an existing one. Loyal customers not only spend more but also become brand ambassadors if they feel valued and appreciated.

Matt: A loyalty program doesn’t need to be overly sophisticated. One of the most effective tactics is a simple 1:1 segmented email strategy aimed at rewarding your best customers.

Here are a few ways to do this:

• Know who your core customers are, where they are, and how they buy.
• Build an email program specifically for this group.
• Use brand messaging that communicates tangible benefits and value.
• Create personalized loyalty offers but keep an eye on margins relative to AOV.
• Test leveraging referral incentives.

2. Focus on Your Owned Channels

Matt: Double down on e-comm to engage and retain your core customer and keep site conversion rates high while investing where you can at wholesale for brand building and future acquisition. 

Ian: Absolutely. Here’s how to do this:

• Increase e-comm conversion rate by optimizing product pages and fine tuning the checkout process.
• Reduce e-comm return rate by removing friction (which is usually size and/or fit issues) and quickly answering customer questions in copy.
• Increase wholesale in-store visibility with high impact point-of-sale material.
• Increase retail staff incentive and affiliate programs to get brand trial. 

3. Focus on Closing the Deal

Ian: Now’s the time to be precise in your targeting. This period of time is about closing sales, not just opening conversations.

Matt: Right. This isn’t about casting a wide net. We’re talking about laser-focused targeting – more precision, less waste. Here’s how:

• More precision in targeting, use a scalpel not a cleaver. 
• Build impressions and consideration for the future (and be ok with not seeing an immediate return).
• Close the deal vs. opens the conversation.
• Benefits with value messaging. 

Ian: We know several things to be true: people will spend again, particularly with the holidays coming; the weather will get colder bringing demand for fall products; and the waves will come back bringing winter surf. In the meantime, a brand’s current and future customer is still using social media, receiving brand emails, surfing the web, and still thinking about things to buy.

Matt: The name of the game is to keep your brand in their consideration set for when that time comes. Also… waves please. 

Interested in learning more or discussing how to keep your brand resilient during tough times? Reach out, we’d be happy to chat.

Additional Resources and references: 

• How to Market in a Downturn (Harvard Business Review).
• Prescription for Cutting Costs (Bain & Company).
• Reduce marketing spend during a recession? History says no. (Medium Giant).
• The Dos and Don’ts of Marketing During a Recession (Invoca).
• 5 Marketing Strategies To Grow Your Business During a Recession (VWO).

Matt Raminick is the founder & CEO of Sunnyside, a leading performance marketing agency that connects creative and business performance to generate revenue for surf and coastal lifestyle brands. Prior to founding Sunnyside, Matt held senior digital marketing roles at Quiksilver, Volcom, and Pacsun. He can be reached on LinkedIn and at [email protected]