R.S.V.P.P.

What’s a retailer to do? Holiday shopping tanked, the economy’s double-dipping, terrorists and war are glowering on the horizon, and winter’s chill won’t dissipate…let’s party!

The current mood of gloom has actually given top-end retailers a fresh approach to shoppers whose needs now go far beyond price, selection and convenience. With big budgets and imaginations to match, retailers are creating instore events to connect with consumers, drive sales, build customer loyalty and establish their store as a fun place to hang out.

For years, retailers shunned in-store events because of their excessive cost and labor. But in today’s retail climate, they’re becoming increasingly important — some would say a necessity. Why? Just look at sales for this past holiday season. According to the Retail Advertising Council, they climbed a meager 2.3 percent over the same period in 2001, as compared to the six percent average of prior years.

Ready for something new, Neiman Marcus invited 2,000 of its best customers to its Dallas store in January 2003. Some 500 attendees kicked off the spring fashion season with a publication party for a book featuring photographs of the city’s “influentials” in a style reminiscent of the work of Andy Warhol.

Guests were met by four models wearing white wigs, black wrap-around sunglasses, skinny black pants and black turtlenecks or long-sleeved shirts underneath t-shirts. Silver balloons were scattered across the floor and silver mylar balloons hung from the ceiling. “We recreated Andy’s famous factory in our store, wrapping columns with tin foil and duck tape,” says Ken Downing, VP of public relations and event coordinator for the Dallas-based specialty chain. Neiman’s menu for the event included such “glamour food” as Twinkies, jellybeans, chocolate-covered bananas and, just like some of Warhol’s paintings, tomato soup in cups that resembled Campbell soup cans.

During the two-hour event, models snapped pictures of guests, downloaded the film in a nearby computer and printed the images onto colored paper, which were then displayed on the walls. While some customers scanned the walls for their photos, many shopped and danced to oldies-but-goodies tunes.

Although Downing wouldn’t release the party’s budget or sales figures for the evening, he did say it was so successful that the same party is being recreated in the retailer’s Houston store.

Not all retailers are convinced that events will drive sufficient sales. An increasing amount of retailers are still focusing their efforts on product discounts instead of events, says Wendy Liebman, president of WSL Strategic Retail, a marketing and retail consulting firm in NY. However, she says retailers must establish themselves as more than just clothes racks and shelves. They must create an environment where shoppers can feel good about themselves.

“Today, retailing is all about emotion,” Liebman says, explaining that even retailers who are very price-driven (think Wal-Mart) understand the importance of in-store events. “An emotional bond has become very important. These kinds of events create a much more personal relationship than another sale or coupon.”

Another advantage: if well done, instore events create a buzz that reinforces the brand’s image.

That’s exactly what Saks Fifth Avenue planned for its Brazilian Carnival event, held in late February on the fifth floor of its New York City flagship store. Co-sponsored by Lucky magazine, the party “wowed” some 400 guests with a Samba parade, dancers from local samba schools dressed in traditional costumes, native food, drink and music, says Lori Rhodes, VP of media relations and special events at Saks Fifth Avenue Enterprises in New York City. Displays included some of the original clothes and fruit-laden hats worn by Brazilian and Hollywood legend Carmen Miranda, as well as authentic Carnival parade pieces for store windows and party décor.

Guests could purchase apparel from a new Carnival-inspired clothing line by Brazilian designer Tufi Duek and from other vendors whose Brazilian-styled accessories were sold in the store that evening only.

“These events help differentiate us from our competitors,” says Rhodes, adding that the party generated excitement among consumers during a cold and gloomy winter. “We don’t want to just do another party where we’re serving a glass of white wine and chocolate-covered strawberries. We’re constantly trying to reinvent everything we do and reinforce our brand image as the most luxurious shopping experience in the country.”

Although large retailers continue to outdo themselves and each other, instore events aren’t just for the big guys. Last year, tiny Blest Boutique in Los Angeles began hosting evening socials in its 600 square-foot retail space. Each party is centered on a theme and promotes local fashion designers, artists or photographers whose artwork is showcased in the store until the next party.

The theme for its February party was a Sweetheart’s Valentine Social, explains Christina Carey, the store’s owner. “We decided to promote lingerie designers, super girly stuff because it’s such a girly holiday,” she says. In addition to the usual — a DJ, free food and liquor and art-work displays — guests were treated to a kissing booth.

Past themes for parties at the boutique involved a circus, which promoted the Cotton Candy clothing line and featured paintings of clowns by a local artist. Another promoted two local designers. About one week before each party, promotional flyers are distributed to nearby establishments, such as bars, and post card-sized invitations are mailed to customers on the store’s mailing list. Carey says she also relies on the designers to help spread the word to their network of friends, which ultimately expands the store’s customer base.

Between 100 and 300 people attend each monthly social. Best of all: daily sales soar between 50 and 70 percent at a costs of under $500. Events are held on Friday nights from nine in the evening until one in the morning.

“It’s probably the best way to really get to know your customers,” says Carey. “And they really want to come back. Everybody dances, everybody drinks and everybody shops.” Party down!

CREATIVITY KEEPS RAISING THE BAR FOR INNOVATION

Ignore the fact that history books are filled with examples of daring forays into event marketing. (What was the Oklahoma Sooners Land Rush if not a 19th-Century attention-grabber contest in the middle of the prairie? If you saw the Tom Cruise/Nicole Kidman movie Far and Away, you know what I’m talking about.) In many minds, event marketing is still the “new” game in promotions.

These days, the creative teams behind events rarely allow themselves to be limited by budgets or logistics. In this special report, we profile large and small retailers who are making shoppers their new best friends through exclusive over-the-top parties and socials. Watch the credit cards fly!

We also take a close look at automotive marketers that are abandoning traditional advertising for new car models targeted to Generation X. Instead, Toyota, Chrysler and Honda on channeling their energies into experiential events that lay the groundwork for a lifetime of brand loyalty.

As with any new “frontier,” there is a need for structure and guides to help those who are staking a claim to find their way. Contributor Steve Woods has laid down five laws for measuring the short and long-term ROI generated through events, as well as managing for realistic expectations of how much can be measured.

Standards for the creativity and returns from event marketing are a moving target nowadays — but moving in the right direction.