Retail holiday ads dress up discounts

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With the traditional start of the Christmas selling season kicking off this week, retailers are adding a variety of marketing tactics that dress up their underlying strategy: discounts.

Many are adding sweepstakes, multicultural efforts and tie-ins to celebrities. Some are bringing back heart-warming branding spots normally lost in the promotion clutter. Others, such as discount department store Kohl's, are offering special sales from 6 a.m. to 11 a.m., followed by a round of midnight madness.

The Gap Inc.'s Old Navy, in a spot reprising the "Family Feud" game show, brings back wannabe stars from "American Idol" to push fleece. It also introduced, via TV ads for the first time, a scratch-off game with a $25,000 prize, followed by a promotion for a trip to an ice hotel and other locales. Sweepstakes have "been terrific in-store vehicles for us," said Dennis Leggett, VP-creative director, Old Navy marketing, adding that the chain intends to increase affiliation with the Fox network show.

Sears, Roebuck & Co. Dec. 1 launches its first campaign introducing newly acquired Lands' End brand into 183 stores. New ads feature shoes, jackets and other items dancing, and are tagged "now at Sears." Sears said the spots are from Element 79, part of Omnicom Group's DDB Worldwide, Chicago, which has the conflicting J.C. Penney account. Lands' End is now at Interpublic Group of Cos.' Martin Agency, Richmond, Va.

Sears is also continuing its "Sears: Where else?" campaign with eight spots from Y&R, Chicago, and WPP sibling Ogilvy & Mather, Chicago, backing its holiday messages with discounts of as much as 50% and 0% financing offers.

In addition to general-market advertising, Target Corp.'s Mervyn's, bracing for the influx next year of rival Kohl's into its core California market, is augmenting its Hispanic efforts with novella actor Carlos Ponce starring in a TV spot running on Hispanic networks. Acento, Los Angeles, handles; general market advertising is from agency Ron Foth Advertising, Columbus, Ohio.

Penney's, which has fueled its dramatic turnaround with a heavy stream of discounting, will add a branding spot from DDB to its holiday mix showing sentimental American scenes.

Walgreen's is trying to pitch its stores as a gift destination with 35 spot and national cable ads positioning the chain as the place you go when things go wrong, said Craig Sinclair, VP-advertising. Havas' Euro RSCG Tatham Partners, Chicago, handles.

Retail king Wal-Mart, flying high despite the down economy, plans four holiday-related spots breaking this week, among them one focusing on charitable works and another targeting last-minute shoppers. Omnicom Group's GSD&M, Austin, Texas, and independent Bernstein Rein, Kansas City, Mo., are Wal-Mart's agencies.

Flat spending

Most retailers indicated their overall ad spending was flat with last year. Some executives report media is nearly sold out through the holidays.

But Burt P. Flickinger III, managing director at consultant Strategic Response Group, said there's only one marketing strategy with a chance of success this holiday season: dramatic discounting. Last year, discounting reached 50% and this year, with discounts starting early for the short selling season amid economic woes, it could reach as high as 65% to 70%, or even steeper after New Year's, leading into a 2003 that, for the retail sector, will be "catastrophic," he said. "Thousands of [individual] stores will be closing and there will be an unprecedented number of retail bankruptcies."

contributing: hillary chura and kate macarthur

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