By Michael Haydock
The retail industry might just be the last bastion of the gut instinct.
In my 20 years working with apparel merchants, department stores and big box companies, I've seen bosses make bet-the-company decisions on little more than a "feeling." Retailing is that kind of a business - it's filled with wonderful visionaries who have an uncanny sixth sense for the nascent trend - or, the moment when a powerful trend is about to falter.
Managing with your gut isn't going away anytime soon -- nor should it. Nevertheless, recent years have seen an important shift in consumer behavior, suggesting that sellers need a few more tools in their bag.
For one, the retail environment is becoming much more seasonal. It used to be that the major retail seasons - or selling opportunities -- were Valentines Day, Black Friday and Christmas. Today, however, the previously minor seasons of Easter, Dads and Grads (in June) and Back- to-School are becoming much bigger - shoppers are spending a lot more during these periods. And new seasons - or mini seasons -- are popping up regularly. Cyber Monday is quite recent. And Teacher Appreciation Day is even newer.
Adding to the complexity, shoppers are creating their own "buy times" or "wait times" among product categories. I produce a forecast of retail sales in the electronics and appliance sector, and I noticed this new phenomenon after the 2008 economic downturn began.
Prior to the recession, consumers had plenty of disposable income - or at least plenty of credit - and thought nothing of buying clothing, electronics, home goods, you name it, all in a concentrated time period. Today, they're still buying, but they seem to be staggering their purchases. Their motivation may be to better manage their disposable income and balance credit outlays. A typical shopper in 2010 might buy a smartphone and then wait a few weeks or a month before taking home that new 50-inch television.
The result of this category rotation, combined with increased seasonality, is that trends are more important now, and they also form and dissipate more quickly. They're harder to anticipate. A retailer that fails to catch one of these buying waves is missing an opportunity.
In this new environment, the gut instinct can be substantially enhanc