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Cold Stone Creamery’s Orchard closure promo: Will this help with other outlet sales?

Cold Stone Creamery has revealed that it will be closing its Orchard Central outlet on 7 April 2019, after eight years in operations in that area. The outlet is launching an exclusive one-for-one promotion for its newly introduced, Thai Milk Tea ice cream. Cold Stone Creamery is under Far East Organisation’s lifestyle arm, called Refinery Concepts. The creamery has three other outlets in Singapore, located at Vivocity, Waterway Point and HillV2.

The closing of the outlet comes amidst a challenging retail scene in Singapore. The industry has in recent years been struggling, largely due to declining store footfall, high rental prices and eCommerce competition. To combat this, the Infocomm Media Development Authority (IMDA) rolled out a retail industry digital plan last year for retailers to enhance customer experiences and facilitate in-store and online shopping.  In addition, IMDA looked to enable SME retailers to exploit advanced platforms such as omni-channel and digital marketing to extend their reach and grow their brand, to meet growing customer expectations and demands.

Speaking to Marketing, Lies Ellison-Davis, non-executive partner at Kantar Consulting said that as a general rule, promotions, such as the one ensued by Cold Stone, alone will not save a struggling retail outlet. According to Davis, drivers of lacklustre retail sales will most often revolve around inconvenient store location, a concept or assortment that is no longer relevant, or service that is no longer in line with customer expectations. She added that this is in comparison with the growing amount of offline and online alternative options available.

Promotions will not tackle these issues and can – if repeated too often or at too aggressive levels – even do significant damage to a brand.

However, if the one-off promotion by Cold Stone Creamery around its store closure is applied with the “right communication tools”, it could temporarily revive interest in the brand and drive awareness around its new flavour. Davis also said that this could be of the benefit of the remaining outlets, adding that it will still not tackle any structural challenges the retail brand may have.

Meanwhile, Jaime Syjuco, CEO of Lean Retail Labs said that Cold Stone Creamery is a “quality” brand, in the eyes of customers. According to Syjuco, this one-for-one promotion is a “cheap way” of customer acquisition, as it creates hype and urges customers to visit its other outlets. Although the store closure may come across negative for a brand’s image, Syjuco said that providing a promotion is cheaper than sending out an EDM.

“If it can, the company should find a way to continue the conversation and engage with customers with aloyalty programme. A good marketer will never let go of engagement and staying in contact with customers. It is an honest and sincere move to take an opportunity and continue the relationship with good customers,” he said.

Marketing has reached out to Cold Stone Creamery for comment.

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