Most retailers are looking for an economic turnaround miracle. And as early back-to-school sales fizzled, many of them aren't sure if they should look for another traditional peak shopping season or push off hope for the holidays. The bad news for retailers hit when monthly figures for July showed only modest growth over last year. Overall, retail sales increased 0.4 percent in July, and rose 5.9 percent over sales in July 2009. It's movement, but most fear that the movement isn't sustainable.
"Retailers continue to persevere in an uncertain economic environment, relying on cost controls rather than sales growth to maintain profitability," noted Sandy Kennedy, president of the Retail Industry Leaders Association. "Retailers continue to deal with considerable market and regulatory uncertainty."
With the exception of automotive, retailers saw a decline in virtually every category. Department stores, clothing, furniture, and building materials were all slightly down. The most common reason for the sales slump is attributed to 14.6 million Americans remaining out of work.
Finding New Solutions In A Down Economy.
In days of old, most retailers relied on location. It was the reason that malls were mapped out all over the United States. As a retailer, you wanted to choose high traffic areas in order to capitalize on pedestrian traffic. The same was true for high traffic streets and urban centers. The people were already there. You only had to be there among them.
One change seems certain in this economy: people need a reason to visit beyond location. In a tightening economy, most consumers are trying to cut back on necessities in favor of occasional luxuries. So maybe, just maybe, retailers need to stop waiting for the people to show up and start trying to find them.
Proximity mailing and online market penetration are good starting points, but even those alone are not enough. You have to do something and that something has to be more than host a sale. Mini-events, new line launches, and educational series are smart starting points.
I'm not making this up. Two of the retailers we work with have seen the most success building connection-centric communities online (helping consumers meet each other) and complimentary or low cost events that people cannot find anywhere else. They don't have to be huge events. Some can be as simple as a local chef hosting a cooking demonstration or authors signing books.
As long as the marketing that accompanies these events includes traditional event listings (citywide), proximity mailers (store radius), and online (interest focused), more people are likely to attend than if the establishment simply handed out in-store flyers to a dwindling walk-in consumer base.
As for the freeze created by regulatory uncertainty? I don't blame retailers for being concerned. However, at some point, you have to forget what the emperor is doing and get down to the business of milking cows. The day to worry about future regulations is best saved for the day they happen. And the day to wait for a miraculous economic sales surge is, well, never.
