In RetailWire’s January 14th issue, I posted to the following discussion. Read it and tell me your opinion. Mike
Consumers Exert Control and Stop Spending Wendy Liebmann, chief executive of WSL Strategic Retail, describes the economic scene as being in a state of “anarchy” and retailing is no longer immune from its deleterious affect. Ms. Liebmann believes that department stores have a major opportunity to achieve gains this year as they have developed product selections that better fit the lifestyle needs of consumers. She also sees a big upside for drugstores with improvements in the front-end beauty category and the addition of in-store clinics. Mass merchants and specialty retailers are going to have a tough time in Ms. Liebmann’s estimation as consumers continue to limit the number of trips they make to stores. Discussion Questions: Do you share Wendy Liebmann’s assessment of the current state of the economy and retailing? Are consumers making fewer trips and spending less when they do shop? What channels do you think are in the best position to weather an economic storm?
The situation we face is based on several factors meeting at once: the housing/sub-prime mess, a wildly fluctuating stock market, high energy and food prices, continuing declines in service levels, and BORING product selection as retailers and manufacturers play it safe due to the preceding factors. Despite these issues, I believe the American consumer desires to spend – retailers are simply not offering the combination of product, service and value to overcome the economic issues. Wendy may be correct that department stores and drugstores may see gains this year, due to attempts to improve assortments. The recent announcement by Macy’s to expand the availability of the very-cool LUSH bath products line in their stores is an example, as is having Sephora products at JC Penney. I am still concerned though about the retailers’ ability to provide the service to go along with the cool product. If they can’t do it, it is off to the internet for me…
Mike Osorio, Your Dare to be Contagious strategist…. www.OsorioGroup.com