John Boccuzzi, Jr.

BrainTrust Query: Retailing in the Absence of Recovery

March 15, 2010

FROM RETAILWIRE:
It seems that each week experts look for even the faintest sign that the fabled "recovery" has begun. The problem with a speculative view of recovery is that it's oddly similar to the shortsighted behavior that brought on the recession in the first place. How should strategies change for retailers during this recovery versus those coming out of previous economic downturns?      [more...]

To see a slight increase for year over year numbers is a good sign. A better sign would be to compare Q4 2009 to Q4 2007 to understand how far off retailers are from sales when the economy was healthier (or at least appeared healthier).

Clearly retailers have made adjustments and continue to make adjustments including a focus on private brands, increased use of coupons and more active programs using loyalty data.

Increased savings will lead to smarter purchase behavior. Quality will trump quantity as shoppers look to buy only what they need. When they do make the purchase decision, they want it to last.

All of that said, as an industry we need to be concerned with some global trends that will impact all of us moving forward. The biggest concern is the consolidation of retailers and manufacturers. Similar to the banking meltdown and the auto bailout, we may see the "too big to fail" trend seriously affect the retail industry.

To learn more, I encourage you to read "Cornered: The New Monopoly Capitalism and the Economics of Destruction" by Barry C. Lynn. Barry makes some compelling arguments regarding the seriousness of monopolies globally.