Learning to Thrive in Post-Recession Retail

As retailers and retail partners, we’re all relieved that 2009 is now a fading memory. The worst economic year in recent history has given way to tangible signs of recovery in consumer spending and a renewed sense of optimism about the future of our industry.

Nevertheless, the past has left its mark. Bearing in mind the axiom, “Those who forget history are bound to repeat it,” we’re now at a good vantage point from which to assess the factors that helped many retailers weather the storm, as well as the strategies and tools they will need to navigate effectively in our new business landscape.

While almost all retailers struggled to survive the recession, some of those in this year’s STORES’ Top 100 managed to retain or even improve their positions. As noted in Deloitte’s Global Powers of Retailing 2010, companies that were able to sustain bottom-line hits from repeated heavy promotions tended to fare better, as did those with diverse formats and a more global base of operations. Yet financial and structural advantages do not tell the whole story. Most mid-sized and smaller retailers also managed to hang on by adapting their operations to suit the adverse conditions.

The lesson this offers as we move through and beyond 2010 is that vision and agility may be your most important assets. Regardless of your size and retail focus, you must have the foresight to recognize change and the ability to take advantage of it by shifting your resources in line with market trends.

We are, in fact, in transition. Mall traffic may be up, but shoppers are more conscious of what they buy and cautious about overspending. They’re focused on value – on getting the right products at the right price, easily, while being engaged by the experience. And to deliver that kind of value, retailers will have to improve their capabilities while also controlling expenses.

The right tools for the job
It sounds like a tall order, but a variety of recent research indicates that retailers are moving fast to fulfill it by strategically adding or upgrading technology. For example, to ensure product offerings are both relevant and accessible, planning and assortment planning systems are flagged as priorities for retailers seeking to align their products with each market to maximize sales and minimize costs. Cross-channel integration and order management solutions also rank high on the list of “must-have” technologies.

With smartphones poised to surpass PCs as the main point of web access for most consumers, mobility is another area receiving great attention. Retailers are positioning themselves to intersect with customers who live on-the-go and expect “right now” information and service to support that lifestyle. Mobile POS solutions make that possible by placing chain-wide product and customer data in the hands of store associates, accelerating transactions and delivering promotions directly to shoppers’ devices.

Cross-channel and mobile solutions also serve to enhance your customers’ experience, which is a key benefit of advanced POS and CRM systems. Both facilitate faster and more personalized service and marketing. Fully one-third of respondents in a recent survey indicated they are planning POS upgrades, and many studies highlight the importance retailers now place on customer loyalty, analytics and target marketing. Leveraging your hard-earned base of customers is an excellent, affordable way to grow your business without growing your chain.

For limiting costs and increasing revenue, loss prevention offers a potent combination of fast payback and excellent long-term ROI. Automated exception reporting and case management tools allow investigators to quickly identify procedural violations, uncover fraud and prepare evidence, plugging profit leaks that can’t otherwise be seen. Retailers are also looking with renewed interest at improving sourcing, warehousing and merchandising capabilities to boost efficiencies throughout the supply chain.

We still face many challenges in our post-recession world, but we have many opportunities to excel. We can continue to manage and profit from evolving market conditions if we think strategically, apply the right resources and remain agile in the face of change. These qualities have been instrumental to Epicor’s success, and they will enable us to help retailers succeed for years to come.