I hope you saw my previous post on lessons learned in retail, which shared insights from industry leaders Terry Donofrio, President of Retail Systems & Services; Frank Andryauskas, former CIO and Executive VP of Supply Chain for KB Toys; and Val Trivisonno, VP of Commercial for The Body Shop Canada.
They also shared their predictions for the industry, which include continued aggressive pricing and promotions as retailers compete for today’s budget-conscious consumers. If Terry’s right (see number 4 below), you’ll be able to do your holiday shopping early and still get great deals.
What’s going to happen next for retail as a whole? What do you think we’ll be seeing retailers do more of/less of in the coming year?
As a whole, we’ll see more pressure on retailers in terms of reduced customer demand. Consumers are going to be buying only essential items, and as close to when they need them as possible.
Retailers will do more:
1. Carefully tailored assortments.
2. Being very aggressive on price.
3. Stressing promotional activity.
4. Taking markdowns on seasonal merchandise earlier than ever before.
5. Delaying store allocations to match customer delays in purchases.
6. Coming up with more new ideas and new programs that address customer need and reduced demand.
More sensitivity to what’s in-stock and rationalizing assortments (i.e. know what customers want and have it in stock so that you can narrow what’s offered in the store). Rationalized assortments improve inventory performance, help retailers preserve cash because they’re not carrying peripheral merchandise, and reflect attention to what the customer is looking for.
Less massive monolithic system changes. Instead, we’re going to see more retailers focusing on integrating process improvements with BI and creating best practices for using data in a cross-functional, integrated process.
We’ll see more heavy promotions. Consumers are now conditioned to promotions, so those won’t go away.
We’re going to see less in the way of assortments. The days of wide breadth of assortment are over. We can’t offer everything to everyone and be profitable.