Post-Recession Dynamics
The dynamics of retailing were already changing prior to the Wall Street melt down. Think about the revolution in digital communications and demographic shifts caused by the emergence of Gen Yers and retirement of Baby Boomers.
Shoppers are now fully empowered by new technologies to research and exchange opinions like never before. They are instantly communicating across channels (Facebook, Twitter, text messages), looking up products and pricing via mobile Web browsers, and sending in-store photos to friends for feedback. What started as an emerging shift prior to the recession is now exploding.
Retailers need to embrace digital channels with the same fervor as shoppers, even while recovering from recent cutbacks and layoffs. Make transactions more convenient, provide access to online shopping carts in stores, and enable viewing of in-store orders online. Help associates place and fulfill orders from other locations. And create product reviews and comparison functions, even for viewing in stores. Sears, for example, lets customers search competitive prices right from stores.
Without question, the recession has altered shopper behavior in significant ways. At least temporarily. For the past 15 years the average savings rate in the U.S. was marked in red numbers. In 2009 it was five percent in the black. This is a massive shift, but it will moderate as the economy recovers and shoppers loosen their wallets.
Lessons learned during the recession will not disappear overnight. Shoppers will continue to search for sales, discounts and bargains, and smart retailers must adapt to a new era of price sensitivity and value.
The New Year marks the dawn of post-recession retailing, but not a return to retailing as we once knew it. New realities require new strategies, technologies and business models. To provide retailers with a roadmap RIS has begun posting a major, multi-part Thought Leadership report called "Planning for the Rebound." The first part is now available on the RIS Web site and can be found by clicking on the Thought Leadership tab.
Check it out, because retailers that execute these recommended post-recession imperatives and bottom-line strategies now will be able to hit the ground running while others are still in recovery mode.