Each year, NRF gathers a dozen or so of its most
important partners from retailing and the
businesses that support retailing for a weekend
of in-depth discussions about the future of our
industry. These wide-ranging conversations
between and among a broad and diverse array of
experts generally elicit some interesting
observations and predictions.
This year, the sixth annual “Big Think” examined
the industry through the prism of the economic
crisis. Not surprisingly, comments were mixed
with caution, some anger and not a little
nervousness about the future. While everyone in
the room brought their own biases and thinking
to the table, there was remarkable consensus
around some major themes.
The changing consumer. We are seeing a
fundamental change in the consumer brought on by
the economic crisis. Consumers are no longer
interested in “badging” — showing off luxury
brands and labels: they are now more interested
in value. Consumers have been living in a
paradigm of prosperity; now they are living in a
society of scarcity. They are grieving over what
has been lost and retrenching, and that is
likely to continue until there is greater
clarity about the future.
Customer experience. There is growing
acknowledgement that retailers need to be
relevant, authentic and transparent. They need
to focus on improving the customer experience
through a better-trained workforce, greater
efficiencies or better customer communication.
For example, more grocers are investing in
self-checkout; other retailers are spending
money on social networking. Fashion designer
Tory Burch has created a new social community,
“Talk with Tory,” that allows her customers to
connect directly with her and with each other.
Investment in new technology. Mid-tier companies
that have not made ongoing technology
investments are now demonstrating real concern
about not keeping up with change and are trying
to buy time or accelerate decision-making.
Larger companies still have capital to invest,
but the stakes are higher. They need to spend
quickly, but whatever they buy must have a
demonstrable ROI within 12 months. There is no
room for error. Those that can reduce costs and
invest smartly during this decline will have a
strong jump on the competition when the economy
improves.
Digital commerce. First-time e-commerce shoppers
are growing 6 percent per year – compared with
the bricks-and-mortar channel, which is
experiencing a decline. A lot of companies have
outgrown their initial e-commerce models and are
increasing investments in the digital world
because the e-commerce channel is more efficient
and more measurable. There is a lot of re-platforming
of e-commerce sites to allow for interpretation
of multi-channel, social media and mobile
technology.
The economy. As painful as this economic decline
is for the retail industry and all those who
work with it, the resulting shakeout may, over
time, be beneficial. It will clear out
underperforming stores and create a better
environment for consumers. But living through
this velocity of change is challenging even for
the best-run business.
