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NRF attendees look for a good year ahead

January 16, 2014

Exhibitors and attendees at this year's NRF Big Show were in a positive mood as they made their way around the cavernous halls of the ever expanding annual meeting of retailers and technology vendors.

RetailWire was on hand and, in our own anecdotal and unscientific sort of way, surveyed individuals among the throng to gauge the industry's mood compared to previous years. What we found was encouraging and several themes emerged.

The first is that retailers, while having committed to technology investments in the recent past, appear ready to further dedicate financial resources as they look to create a deeper engagement with consumers and focus aggressively on growing their top line following years of trying to wring out expenses. One vendor told RetailWire, "A recognition of what's needed is there. We are potentially at the edge of a U.S. store renaissance." Another said, "Retailers are coming to our booth with firm ideas of what they want and are ready to spend."

Our second key takeaway is the belief by most that America is finally emerging out of the worst economic crisis since the Great Depression. Fears of a double-dip recession have lessened and vendors talked about an incredibly resilient consumer market, albeit increasingly competitive for retailers. "I think the Christmas sales numbers proved to be in line with expectations, but retailers are going to have to figure out some way other than 70 percent off to drive business," said one vendor. "We can help."

Finally, respondents seem to think that the political brinksmanship in Washington, D.C. will be dialed back in 2014 as the majority of people in Congress come to understand there are no winners in defaulting on the nation's debt. They also see recognition of the Affordable Care Act as a reality in the lives of millions of Americans and the focus shifting from repeal to improvement. One vendor told RetailWire, "There are steps we'd like to see out of Washington, but I think we'd pretty much all vote for them just calling a truce at this point."

Here is how the mood of the industry shakes out by the numbers compared to previous years.

Discussion Questions:

How confident are you about the retail industry's prospects for 2014? What factors do you think will be most important to retail performance over the course of the year?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Are you more or less optimistic about the retail industry's prospects for 2014 compared to where you were at this point last year?

Comments:

I would be more optimistic if I thought we could work our way out of this crazy promotional madness we've gotten into. We're training consumers in very bad ways.

Apart from that, I stand by what I said in 2009-2010. American consumers in particular love to shop. It's what we do. Consume. So given half a chance, consume we shall.

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Paula Rosenblum, Managing Partner, RSR Research

The future of retail is the consumer.

Retail has always been about the consumer. But in the past, retailing has been all about ads, promos and pricing "to get consumers to come shop."

Today, the consumers are in charge of their journey. They shop any time, everywhere, 24/7/365. Omni-channel is the new normal.

The critical success factor in 2014 will be reaching consumers when and where they want to shop, versus "racing to the bottom" on price to get them to come to a location (store).

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Chris Petersen, PhD, President, Integrated Marketing Solutions

From time to time we're reminded of pent up demand. I think the report of retailers' view of 2014 acknowledges that consumers will be there for them if their personal finances allow them to be.

Economic forecasts point to continuous growth, albeit slow. At the same time the possible increase in the minimum wage, reinstated unemployment payments, lower health insurance premiums and possibly stable, if not lower gas prices, suggest there will be more money for consumers to go shopping.

If retailers direct their strategies accordingly, I think the retail industry prospects for 2014 are positive indeed. On the other hand, if retailers overreach, i.e. think they can bring back their pre-recession tactics, their individual results will suffer. There is a new "normal."

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Joan Treistman, President, The Treistman Group LLC

I didn't attend, but I monitored the tweets (#NRF14) - I share some of the tweets below (from Monday morning/afternoon) - but the theme I saw most often was a big shift to mobile as the central touchpoint and deep frustration over the term omni-channel v. a single customer experience.

It looks like retail is interesting again - at least much different then the doom reported in that 1990 Management Horizons report - remember, the over-stored/me-too days! As Paula said, we like to consume, it's been that way since the Agora.

  • Consumers don't GO shopping anymore, they are ALWAYS shopping
  • Retailers' fears of 'showrooming' could be overblown, study shows
  • There hasn't been a new indoor mall built in the US since 2006... a strong hint that customers don't want them. @RickCarusoLA
  • If you are in the brick & mortar business - you must also be in the hospitality business.
  • We're expanding the definition of what's "retail." Travel/hospitality, telcos, even healthcare. No one is exempt
  • e-mail is still the second trigger for a customer to look after a special deal, according to Forrester's research.
  • "Omni-channel is an overused buzzword. That is just #retail today." #CIO panel
  • @WarbyParkers personalized webcam video responses to customer service questions average 80 views each

Vahe Katros, Consultant, Plan B

My theory is the economy is always good all the time for good people and good retailers. Maybe the question should be, will mediocre retailers survive 2014? My answer is there will be more and more failures and consolidations. Consumers will be very unforgiving.

David Livingston, Principal, DJL Research

It is wonderful to read of optimism in the retail community. I hope the vendors George cites are right in their assessment. And I agree with Paula, given the means, American consumers are "born to shop."

But there is one lingering concern in my mind about the long-term direction of our structural economy - and its impact on consumers' ability to spend. Our U.S. labor participation rate has now dropped to the lowest level since the early '70s. The post '70s economic growth and the attendant rise in two-income households had a dramatic effect on U.S. household wealth and ability to consume.

If our labor participation rate stays on trend, we will inevitably see lower household wealth, less ability to spend and an increase in the "wealth gap" we love to dream of eliminating. This does not bode well for the sale of BMWs, Bordeaux and Barbie dolls. Consumers need to see real job creation for retailers to see sustained consumption growth.

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Ben Ball, Senior Vice President, Dechert-Hampe

For consumables, I think Livingston and Rosenblum hit it. For non-consumables, I think 2014 will be a rebound year as consumers relax the tight grip on their wallets a bit. Purchase procrastination will ebb.

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Dan Raftery, President, Raftery Resource Network Inc.

We in retail have been saying for years that it's all about the customer. Well, finally we mean it and we're doing something about it.

I saw retailers with their pocketbooks open (now that's a first! Ha!) at NRF this year. It's going to be a very good year for all of us.

Now we just need to get beyond that discount, discount, discount mentality.

Lee Kent, Let's meet share and succeed in Retail, YourRetailAuthority

The present national and global economy is in fact much worse than what was the great depression of the 20th century. If it were not for the federal reserve currency system we now use globally, the world economies would be apocalyptic instead of just plain catastrophic. Supporting any and all desires for success is always cheerful and uplifting in the face of long -term struggle. This hope and leap of faith will become a fatal distraction for the believers if the economy continues to stagnate in FY 2014.

The recent news of rioting in Europe's large cities and the shrinkage and/or mergers of large retailers and OEM companies is not a sign of support for optimism of any kind. I am of the opinion that retail must keep inventories well tuned to ensure every customer can and will complete every order with every visit to ensure a highly desirable one-stop shopping experience. Logistics and inventory will be the keys to expanding profits and market share for the 2014 fiscal year in retail-ville. But that's just what I think, and the real facts seem to support.

'gjarnoldjr'

Two big factors that can get retailers excited.

First, we are coming out of a bad economy and the numbers are looking good for retail.

Second, with technology there are multiple ways for consumers to buy beyond traditional brick and mortar stores. Buy online with a computer, tablet, smart-phone, through an app, etc. I can be out with a friend, like a product he/she is using, and not have to wait for a convenient time to go to a store or be in front of a computer. Just pull out my phone and make the purchase.

Those two factors, the economy and "easier-than-ever" should make retailers excited for 2014.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

It's going to be a good one, I can feel it. A lot of pent up purchase power will get rocking right after we stop freezing to death. It will not look good at first as many forecasters, including savvy retailers, seem to forget: weather plays. And right now, it's hard to even go outside over much of the Midwest and Northeast. Keep that in mind. But come warm weather, look out!

This is, of course, barring any 9/11 or Wall Street disaster, which, you know, this IS America, so anything's possible.

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Lee Peterson, EVP Creative Services, WD Partners

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