Desperate retailers turn to viral marketing

A new front has opened up in the festive promotional battle with many high-street retailers resorting to guerrilla marketing to fight the onslaught from online rivals and stave off the need to bring forward their post-Christmas sales.

House of Fraser, Gap, Selfridges, Habitat, Next, HMV and Dorothy Perkins are among retailers that have e-mailed discount vouchers and promotional codes to thousands of potential customers. Such offers have been widely circulated via the internet, clogging up inboxes and sparking a rush on certain stores - most notoriously Threshers, the off-licence chain, that learnt to its cost the potential dangers of viral marketing.

Retail analysts said high- street chains were using the marketing ploy to entice the burgeoning army of internet shoppers back to their stores amid mounting evidence that people are shopping online from home.

Matt Smith, co-founder of The Viral Factory, a viral marketing agency, said viral marketing was "a way for retailers to respond to the shift online last Christmas by getting people to come back to their shops".

Paul Smiddy, at HSBC, added: "Against a dull retail background, companies are looking to secure sales where they can. E-mailed offers are a way to stimulate sales without telling people and investors that you are one step away from a profit warning. They don't draw attention to the fact that you are desperate for sales."

Some retailers - Threshers included - see themselves as victims of the phenomenon, which invites abuse because e-mails can be so easily forwarded. Dorothy Perkins, which is part of Sir Philip Green's Arcadia group, offered internet subscribers to its newsletter 15 per cent off all purchases until midnight on 14 December if they use a special promotional code.

"Someone must have forwarded their code on to someone else and this e-mail was obviously passed on to a lot of people," said a spokeswoman for the chain. She added that a 15 per cent discount at Miss Selfridge, another Arcadia brand, that had been offered exclusively to subscribers to the fashion website Get Lippy had been "forwarded on virally". The group has said it will honour the offer, which is valid until midnight this Thursday.

The fashion chains Oasis, Warehouse, Crew Clothing and Urban Outfitters have all offered similar discounts to potential customers as has the clothing website Asos.com. Next is offering customers free postage and packaging if they order from its website, while other offers from the shoe chains Faith and Ravel have expired.

Robert Dirskovski, head of interactive media at Direct Marketing Association, said: "E-mail marketing has come of age. It shouldn't be a surprise that the big retail groups are using it."

Foot Fall, which tracks high-street trends, said the number of shoppers out over the weekend was 10 per cent weaker than the same period last year. However, it was up on the previous weekend.