STORES Magazine - April 2009 - (Page 10) CONSIDER THIS / PRESIDENT’S PAGE Velocity of Change BY TRACY MULLIN The Voice of Retail Worldwide STORES is published by NRF Enterprises Inc., ach 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. E a subsidiary of National Retail Federation Inc., 325 7th St. NW, Washington, D.C. 20004. (202) 783-7971 FAX (202) 737-2849 CHAIRMAN OF THE BOARD Myron E. (Mike) Ullman, III, Chairman and CEO, J.C. Penney Company, Inc. VICE CHAIRMEN Philip L. Francis, Chairman and CEO, PetSmart, Inc. Stephen I. Sadove, Chairman and CEO, Saks Incorporated PRESIDENT & CEO Tracy Mullin SENIOR VICE PRESIDENTS Denise Brassé, Industry Relations Mallory B. Duncan, General Counsel Michael G. Gatti, Communications David Hogan, Retail Operations and CIO Carleen C. Kohut, CFO Steven J. Pfister, Government Relations NRF Divisions Association for Retail Technology Standards EXECUTIVE DIRECTOR Richard E. Mader (202) 626-8140 National Council of Chain Restaurants PRESIDENT John R. (Jack) Whipple (202) 626-8183 FAX: (202) 626-8185 Retail Advertising & Marketing Association EXECUTIVE DIRECTOR Michael G. Gatti (202) 626-8117 FAX: (202) 737-2849 EXECUTIVE DIRECTOR Scott Silverman (202) 626-8192 FAX: (202) 626-8191 325 7th Street, NW Suite 1100 Washington, D.C. 20004 All articles published in this magazine represent solely the individual opinions of the writers, and not necessarily those of the National Retail Federation. 10 STORES / APRIL 2009 WWW.STORES.ORG http://WWW.STORES.ORG
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