Everyone wants their business to return to the heady days of 2007. It’s a natural desire, fueled by happy memories of limitless growth and consumer’s huge appetite for indulgence in a buoyant economy. But the new reality is far different from our not-so-distant memories.
The economic meltdown of the last year hit when the world was already undergoing some profound and sweeping changes. The rapid advances in technology, coupled with the globalization of most businesses, has made the planet a much smaller and more connected place.
While that has driven impressive growth as brands and retailers seek to expand their reach, it also has linked economies in some unsettling and disruptive ways. What happens here doesn’t stay here and vice versa.
This is most evident at retail, where merchants of all stripes are struggling to readjust expectations in light of the global spending slowdown. And while some have managed to weather the storm better than others, most find themselves nervously planning for the next selling season without a road map.
That’s where falling back on old notions and patterns can be a recipe for disaster.
Tradition dictates that the retail business lives and dies on last season’s results. But the size and scope of this recession isn’t the only dynamic affecting retailers. The consumer has dramatically changed their shopping habits, and the two forces are creating a “perfect storm” that makes many merchants confused and error-prone.
Simply wishing and waiting for business to return isn’t enough. Now is the time to accept that the world has changed. Now is the time to lay the groundwork to meet a new set of customer needs and expectations.
The smartest players have already set the wheels in motion. They know that this unsettling period is a golden opportunity to make the kind of sweeping change needed to survive the next decade and beyond.
Here’s a look at 10 points that will be instrumental in determining future success:
Retailers must give up the idea that the consumer will eventually return to old shopping patterns. They need to accept that today’s consumer is going to buy less and be more concerned about the quality of each purchase and the experience of buying it.
A new wave of tech-savvy consumers will challenge old retail notions. They will continue to have more access to product info, new trends, pricing and other details — all at the touch of a button on their cell phones or computers. They will continue to be the most knowledgeable and fickle demographic because they have the tools to search for the best product at the best price.
Retailers will increasingly be forced to speak their shopper’s language and use the high-tech options available to their advantage. Just look at Zappos.com’s recent success with social media (and a major deal with Amazon.com) as proof that the best retailers will also need to be the best — and most effective — communicators.
Customize the Mix
Cookie-cutter retail won’t cut it in the future. National or global retail chains have to learn to better customize their mix to their location. Product selection has to be fine-tuned to address local tastes, seasonality and demographics.
The age of the soulless, big-box selling floor is over. Large chains need to break their offerings down with stylish merchandising that presents fashion trends in appealing ways. Just look at the new Topshop store in New York’s Soho for a glimpse at how this creates excitement among shoppers.
Address the Audience
An increasingly younger consumer is all about fast, trendy product. Middle-aged audiences will increasingly identify with younger shoppers while demanding more comfort, and the aging baby boomer crowd will require stylish product and a higher level of service. That’s why the green, wellness and comfort categories have a very bright future.
Dollars & Sense
Price is now a vital part of the game for shoppers at all levels of the market. The conversation needs to move from “when will we return to full price” to “what pricing represents a good value.” Value is king of the new world.
Stylish, well-designed product will always drive sales, regardless of the economy. Look no further than troubled GM’s Camaro, the “it” car of the summer, or Apple’s smash iPhone for proof. Buyers need to focus on shoes that make a statement and offer either irresistible style or meaningful technology. Or better yet, a combination of both.
Shoppers will increasingly demand better service. Higher unemployment allows retailers to invest in top-quality help that knows how to coddle customers. Those people will pay for themselves, and the customer loyalty they engender is invaluable in an era when consumer fickleness is at an all-time high.
I’ve said this before … and I will say it again. Retailers need to listen to their shoppers. Find ways to gain meaningful feedback. Set up blogs, conduct customer focus groups, send out surveys, etc. Do whatever it takes to find out why people are buying and what they think of your store. The answers will be the most telling and important information you will ever receive on the road to a vastly different future.