Close-Up: Why are so many retailers pitching?

Does the number of top retailers reviewing their accounts amount to a trend, Noel Bussey asks.

In the past few weeks, three of the UK's top retailers have put their creative accounts up for pitch.

But are they linked by anything other than their sector? And will the recession prompt more major retailers to follow suit in 2009?

On the face of it, each of the three reviews were caused by individual circumstances. Some believe that John Lewis was concerned about turmoil at Lowe London, others say Debenhams tried to put pressure on Miles Calcraft Briginshaw Duffy's margins, which led to the agency resigning the account. Meanwhile, an insider involved with B&Q says the pitch is about money, new leadership and a need for new ideas.

But what has also become very clear is that, in one way or another, they are all inextricably linked to the current economic crisis.

Maureen Hinton, a retail specialist at Verdict Research, says: "Because they are so customer-facing, retailers are always the first to get hit by a recession, which means they begin to cut spend from all of the supply chain, which also means advertising budgets."

This will be exacerbated by the fact that for many retailers, especially high-street stores, using agencies is a relatively new thing. Given that they wouldn't have had these relationships in the downturn of the early 90s, they have little experience of how to approach advertising in a recession.

The intervening years since the last recession have also seen the relentless rise of the client procurement director. In response, agencies have trimmed costs and margins to deliver a competitively priced service. So there is little agency fat to cut when recession places additional pressures on fees.

One agency chief says: "You can only cut so much, and at some point you have to say no. But if you are a new agency, you can start from scratch and will probably work in a much more streamlined way." But are retailers - and consequently their agencies - feeling the pinch of recession more acutely than others? Certainly the retail sector as a whole had a disappointing Christmas and is having to face tough financial questions perhaps earlier than other sectors.

But retailers are also taking the opportunity to use an ad review as a way of examining some more fundamental business issues. Smart retailers are talking to agencies about how they can help revitalise their performance well beyond the communications remit.

Ali Jones, the marketing director at Debenhams, says: "We weren't expecting to go to pitch, but it is a way for us to see new ideas and a new strategic direction to give us standout from the rest of the pack."

One industry source adds: "The next few months will be characterised by red. There'll be a lot of discount and sales advertising, but by summer this won't be effective - it will just be a wall of noise. Retailers are going to need new, more effective ad campaigns and advice on backing that up with a better quality product and service."

There's no reason why your existing, tried-and-tested agency shouldn't be able to come up with just that sort of stand-out idea and business insight. But perhaps there's more scope for innovation in a pitch environment.

Observers suggest that campaigns that are not based on the two founding principles of retailer advertising (price or quality), such as the Sainsbury's "Try something new today" line, may be the way to stand out from the pack.

And it's worth remembering that Abbott Mead Vickers BBDO came up with that campaign as part of its ultimately successful repitch for the account.

AGENCY HEAD - Ian Pearman, managing partner, Abbott Mead Vickers BBDO

"They're pitching because retailers are always in the front line, the worst hit in a recession and they are looking for one of two things: cost reduction or the hope of some route out of it - some magical advertising that can make it all better.

"The procurement route is the easiest of the two but the creative answer can be found with some guts to go for it; they need to find a campaign idea that isn't about the staples of retailer advertising: price or quality.

"However, if they go down the procurement line, they're going to get the work they deserve; if they shoot for better they'll succeed."

CLIENT - Craig Inglis, head of brand communications, John Lewis

"While several retailers are pitching right now, I'd be wary of presuming this is a trend caused by something specific to retail.

"However, the economic conditions we are facing are the one thing that is likely to be common to most brands.

"In these times, marketing budgets will inevitably come under scrutiny, and it's natural and prudent to consider if the external marketing support you have in place is right. All advertisers should give really serious consideration to their other options before embarking on a pitch process, though, as, while they can deliver new ideas, they are neither easy to manage nor are they an instant solution."

INTERMEDIARY - David Wethey, chairman, Agency Assessments International

"It's all down to the considerable economic pressure that retailers are facing because of the downturn.

"In the last recession, clients held off from pitching, but now it is seen as either a valid way out of the problem, or a good chance to cut spend. However, agencies are also much more robust this time around and can take the loss of an account - so some are not bowing to procurement demands and have the option of resigning business."

CLIENT - Ali Jones, marketing director, Debenhams

"We were forced into pitching by Miles Calcraft Briginshaw Duffy going for the John Lewis account.

"I wouldn't have made the decision to pitch myself but it's an exciting process and a fresh pair of eyes is always good. Now we're going into 2009 thinking that fresh ideas could be a good thing.

"There are obviously some related economic factors affecting retailers but I don't think this is a trend because everyone is looking at their own strategic direction. You can't make sweeping generalisations about this - you have to look at your own business and make a decision. This is a coincidence more than a trend."