Last fall I attended the 2009 Strategic Outlook Conference in New York, held by Retail Forward. I took away four key insights.
The economic revival—luxury will lag. The country is on the verge of recovery, predicted Frank Badillo, senior economist at Retail Forward, but it will come in stages, with sales of high-ticket discretionary goods and services lagging.
Short-term growth will be fueled by lean inventories, pent-up demand, and sales of food and drug staples. Badillo predicted a 1 percent increase in retail sales for the fourth quarter of 2009, a 3 percent increase for 2010, and 4.5 percent growth for 2011.
He said mass, specialty, and non-store (online) retailers would be the winning channels, and department stores and regional malls would lag as value-based shopping becomes the “new normal.”
The budget boomer. Lois Huff, Retail Forward’s senior vice president, said the baby boomer consumer is gone. The boomers recognize they no longer can have it all, and retailers must be prepared to fulfill a more thrifty approach to buying.
Huff said investment spending is the boomers’ new mantra. Boomers will make responsible choices that “beat the system.” Timeless quality is the No. 1 attribute for boomers, and they know the difference, so don’t try to fool them. Close the deal by creating more “must haves” and transforming “must haves” into “need to haves.”
Shopping online and on a line. Matt Pace, managing director of Compete Inc., said the explosive use of mobile Internet devices and smart phones is transforming shopping from a planned occasion to an integrated part of daily life. Consumers don’t have to set aside time to shop at a store—they can buy what they want while waiting in a line or riding a train. Mobile shopping “apps” (applications) are proliferating, and traffic to the top 200 e-retailers increased 7 percent in the last 12 months.
Social media—the power of community. Social networking is here to stay, according to Dan Stanek, Retail Forward executive vice president, and retailers must learn to embrace it. Forward-looking merchants have adopted social media as an interactive and cost-effective way to engage shoppers and create their own customer community.
Twitter, with 23 million visitors per month, and Facebook, with 123 million per month, offer a number of benefits, including immediacy and low-cost access beyond traditional media, an opportunity to “walk in the customer’s shoes,” and the ability to engage shoppers on their turf and on their terms.