NRF: The Mood Was Good in New York

Discussion
Jan 12, 2011
George Anderson

Ah, remembering the bad old days. It was interesting making
the rounds at the National Retail Federation’s Big Show in Manhattan over the
past several days to discuss the difference in the mood of attendees this year
compared to the recent past.

Everyone we spoke with recounted how depressing
the atmosphere was two years back as the realities of Great Recession were
becoming clear. Engaging in a bit of black humor, we joked that we had collected
as many resumes from individuals as business cards with many concerned whether
their current jobs would be still be around when NRF rolled around the following
year. While obviously an exaggeration, we did get quite a few emails with resumes
attached in the weeks following with messages along the lines of “in case
you hear of anything.”

Several CEOs of exhibitors at the show recalled
being “hopeful” last
year that business would turn in a positive direction as a larger number of
retailers had expressed interest in the solutions their companies offered and
were just trying to decide on timing. Some, it turned out, had pulled the trigger
in 2010 while others had not.

That brings us to this year’s show, where the mood was
noticeably improved. No, there weren’t displays of irrational exuberance with
folks dancing in the booths. Okay, maybe there was a little dancing in one
or two, but that only seemed to happen after Happy Hour kicked in. Retailers
were giving technology vendors, we were told, the go-ahead
on projects and no longer waiting for the right time to get started.

RetailWire polling at the show confirmed our anectdotal findings. Of
114 asked whether they were more or less optimistic about the retail industry’s
business prospects this year versus the last, 22 said they were “much
more optimistic,” 70
were “somewhat more optimistic,” 19 were “the same” and
only three were “somewhat less optimistic.”

Echoing sentiments expressed
at Monday’s Super Session, “Retail’s Road to Recovery: Status Report on the
Global Economy,” almost all were confident that 2012 and 2013 would be better
still. Caveats such as the effect of rising fuel and other commodity costs,
employment figures and the fiscal health of the government were all mentioned
as factors that could get in the way of even happier Big Shows in the future.

Are you more or less optimistic about the retail industry’s prospects this year versus the same period last year? Where do you see the greatest opportunities for improvement at retail?

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13 Comments on "NRF: The Mood Was Good in New York"


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Dick Seesel
Guest
10 years 3 months ago

I’m optimistic in the sense that economic recovery and rising employment will have a positive effect on consumers’ outlook and willingness to spend on discretionary goods. But these signposts of recovery won’t appear overnight, so I expect the rebound in retailers’ results to be “slow and steady.” Nobody knows whether the “new normal” of tighter household budgets will be a long-term brake to recovery, but holiday 2010 looks modestly healthy in this context.

Kevin Graff
Guest
10 years 3 months ago

I think we’ve passed the point where retailers can blame the economy if business isn’t going well. If sales are shrinking, you probably have no one to blame but yourself now (with apologies to those selling items that tech is making somewhat obsolete; DVDs, CDs, books).

W. Frank Dell II
Guest
10 years 3 months ago

At the NRF show yesterday, the majority of vendors gave a sigh of relief that the hold on IT spending seems to be over. Retailers have spent little on IT the last few years. Now they need to update and upgrade. They have the money and management knows they must move ahead. There is simply pent up demand for IT products with a twist. There appears to be less interest in cost savings and more interest in increasing sales. This is further supported by the realization that the consumer has changed and it will be harder to grow sales.

Roger Saunders
Guest
10 years 3 months ago
The Consumer has made adjustments, psychologically and financially, to deal with this “new normal.” That should mean a continued slow improvement in the retail picture. However, we’re still a good way behind 2007 pacing. The good news from the December, 2010 Consumer Intentions & Actions (CIA) Survey regarding “Changes the Consumer has made in the Past 6 months” comes from both Households earning $50,000+ and Total Household groups. 38.2% of Households earning $50,000+ say that they are focused on being more Practical and Realistic in their purchases in (12/10) vs. 47.0% in (12/09). Total households shifted to 50.2% (12/10) from 54.0% (12/09). In addition, consumers are not quite as strident in adhering to a continuous budget. 32.1% of Households earning $50,000+ said that they were more budget conscious in the past 6 months in December, 2010 vs. 39.6% in December, 2009. Those earning less than $50,000 are loosening up a bit, as well, with 44.4% watching the budget closely in December, 2010 vs. 47.9% in December, 2009. If retailers follow both the consumer trends and… Read more »
Len Lewis
Guest
Len Lewis
10 years 3 months ago

There’s always this “put on a happy face” mentality at these shows. But I think there’s reason for the IT guys to be cautiously optimistic. There seems to be a lot of pent up demand out there for business intelligence solutions.

But the phrase I kept hearing–and one to keep in mind as we move forward to omni-channel shoppers. This is not multi-channel where consumers make a choice of where to shop. The omnis shop everywhere all the time and retailers have to understand who they are and be there to greet them whether it’s brick and mortar, online or mobile shopping. Thin integration!

Bill Emerson
Guest
Bill Emerson
10 years 3 months ago

My sense is that the optimism at NRF is much like that of the survivors of the Titanic sinking–“yeah, things are much better now, I feel great.” How about the people at Circuit City or Linens n’ Things or Mervyns?

Retail is undergoing a major re-ordering. In a multi-trillion dollar industry, there will always be winners (and losers). We’re just on a different base now.

Charles P. Walsh
Guest
Charles P. Walsh
10 years 3 months ago
It is a pre requisite for Retail Industry Executives to be optimistic in nature. It is my experience that a leader who is not optimistic is unable to inspire his team towards driving business and building solutions to short and long term problems and/or opportunities. That said, I think it is fair to say that the RetailWire poll results are skewed by a couple of things. 1) Natural optimism and 2) a reluctance to portray your companies prospects as being as bad as they might actually be. Optimism is good as long as it is anchored in reality and planned for accordingly. There was a great deal of optimism about Holiday sales (which looked strong in November but fizzled in December) however retailers planned for a modest holiday as generally reflected in their inventories during peak sales periods were many outs were noted. I am personally optimistic that retail sales will eventually recover but not before Americans start working and saving again. Unemployment and personal debt are major mountains and inflation is further weakening discretionary… Read more »
James Tenser
Guest
10 years 3 months ago

The mood was upbeat and the attendance quite obviously up at this year’s NRF Big Show in New York. A number of sessions were standing-room-only, and some locations on the exhibit floor were downright congested on Monday.

My conversations with exhibitors tended to confirm RW’s poll – optimistic, but not giddy. They seemed to enjoy some pent-up interest from retailers who had postponed some IT and operational investment during the two lean years just past.

Analysts I spoke with were not exactly forecasting a boom, however. Solid growth in IT spending yes, but no where near double-digit. More like back to normal – 2-4% range.

So the good feelings may be as much relief as positive conviction. We’re not out of the woods economically speaking, so folks are still treading carefully. To paraphrase Beat Novelist Richard Farina, “We’ve been down so low, this looks like up to us.”

Tim Smith
Guest
10 years 3 months ago

If gas prices reach projected highs and grocery retails keep inching up more, consumers will keep the purse strings tight, shopping their list, and clipping and redeeming coupons. Discretionary income will shrink as more will be needed for what they need vs want.

Mary Scimone
Guest
Mary Scimone
10 years 3 months ago

I’ve attended these types of events for 20 years (give or take) and I feel that this was one of the better ones in recent memory. What makes a good show, in my opinion, is not just the sheer volume of retailers walking the floor or the general session presentations. What makes a good show and what makes me hopeful is the dialogue and the attention to detail I experienced over and over on the Expo floor. I had relatively long discussions with many disparate retailers and the types of questions that were being asked were thoughtful and provocative.

There’s a fundamental shift that has occurred in the ways in which these organizations are thinking, which I think will more and more be seen in the choices they make this coming year. Change is good and progressive thinking followed by action is even better.

Ted Hurlbut
Guest
Ted Hurlbut
10 years 3 months ago

Of all of the comments coming out of the NRF Convention, I was most taken by one by Matthew Rubel, chairman and CEO of Collective Brands.

“Focus on your customers. Innovate for them. Know how they shop, and why they shop. Buy low, sell high, keep your overheads low. Anybody who goes beyond those fundamentals will wander.”

It’s not a question of being optimistic or not. I believe success this year and in the coming years is going to depend on adhering to core retail fundamentals, as Mr. Rubel so clearly laid out.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
10 years 3 months ago

Acquiring stuff. That’s how consumers view the role of retailers in their lives. It’s a symbiotic relationship and it will never change. One cannot survive without the other, a scientific fact (trust me on this one). The “retail industry’s” prospects are the same as ever: When consumers want to buy, they buy. And they always want to buy. And they always spend more than they can afford. The trick is in shifting their supplier preferences. Also, more people, more purchases. Don’t let population increases influence your evaluation of the true retail landscape. Always compare foot traffic to item movement and not to inflated register rings.

In the new year, give consumers something new or a new version of something they already have. “New” rules the day while “improved” finishes a distant second. I am very optimistic about retail sales in the U.S. this year. I just hope that most of it is for American-made stuff.

Bill Hanifin
Guest
10 years 3 months ago

Consumers will continue to adhere to debt reduction and financially responsible tactics for the next period of time (24-36 months). During this timeframe, retailers are well advised to focus on substance and value if they are to earn their share of consumer spend.

One tip to retailers: Make use of the assets in house, i.e. your database to more intelligently allocate marketing spend.

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