To paraphrase a saying mostly applied to the weather, everyone’s always talking about the economy but nobody’s doing anything about it.
That’s not really accurate. Millions of consumers are changing their shopping patterns every day. They’re buying less. They’re making fewer trips to the mall (as I write this a few days before the start of the Olympics, I predict huge ratings as Americans choose their TV rooms over a trip to the shopping center, even if it is back-to-school season). When they do trek out to the store, they’re abandoning normatives set during the go-go years of the late 1990s and the early 21st century. They’re shopping for essentials, with few dollars squandered on discretionary purchases.
Visits to most types of shopping centers, including trendy lifestyle centers, are down, according to TNS Retail Forward. High gasoline prices are trumping potential savings, even deterring trips to outlet malls, indicated Kelly Tackett, senior consultant.
Wendy Liebman, the guru behind WSL Strategic Retail, suggested women are channeling their inner June Cleaver beings. To cope with rising gas prices, they’re becoming more like the “Leave It to Beaver” mom, cooking more meals and baking more from scratch rather than buying ready-made food and pastries. They’re stocking up on sale items, using more coupons, trading down to less expensive brands.
Even as crude oil prices dipped in early August, and gas prices moderated to just below $4 a gallon, there were dire warnings that the energy crisis was far from over. Not when winter is approaching and estimates range from 25% or higher for the increased cost of home heating options in the Northeast compared to a year ago.
“The consumer will have less control over discretionary spending after this heating season,” said Jeff Bloomberg, principal and managing director, Gordon Bros. Group. “Consumers have reduced gasoline consumption but won’t be able to do so for heating oil.”
It’s September. What are you to do for the upcoming holiday season? No doubt, you’ve already adjusted inventories to reflect softer expectations. But to maximize sales you must take proactive steps.
In whatever form it exists, your customer database must be mined to create individualized marketing and sales pitches. Mass appeals will simply bundle you with other retailers desperately trying to dump product at the lowest possible price.
You must individually target customers based on their prior purchases and their current lifestyles and life stages. Scour public records for newlyweds, new homeowners and new parents.
Staff needs to be re-educated and trained to focus on building sales—accessorize every sale with high-margined add-ons. Belts, scarves, costume jewelry, ties for apparel; carrying cases, batteries, warranties and the like for hard goods.
Retailing cannot be permitted to be treated as an impersonal job, even by hourly associates. Make them understand that in today’s economy, their future employment is at stake because the viability of the whole enterprise is hanging in the balance.