How critical is the psychological component to consumer spending? Is a strong retailing environment a by-product of consumer optimism and, conversely, are periods of weak sales created by shopper pessimism?

The psychological component to consumer spending is huge, of course. The problem is that there is often a mismatch between consumers’ perceptions of their own situations and prospects (usually good, and improving), and those of the economy as a whole (often bad, and worsening). As a marketer or retailer it thus becomes your job to appeal to consumers on the basis of value, whatever the (perception) of the overall economy. There are different ways of doing this with different consumers.  http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13058 

Filed Under Consumer Behavior

Which offline direct marketing media will become more valuable for retail and consumer brands in the future? Which will lose value?

According to PQ Media, spending on alternative media hit $73.43 billion in 2007, a 22% increase over the previous year, and will continue to surge. As reported on AdAge.com, the research firm forecasts a 20.2% increase over the next year, to a total of $88.24 billion, and a compounded annual growth rate of 17% for 2007-2012, reaching $160.82 billion. By then, alternative media will represent 26.6% of all advertising and marketing dollars.  According to The Future Exploration Network, the fastest-growing and largest segments of digital advertising over the next few years are forecast to be paid search, mobile, and video. However the pace of growth is expected to be solid across the board. They expect new segments of digital advertising to emerge, including personalized outdoor and in-building advertising, and advertising in virtual worlds. The domain of digital advertising will continue to expand. For example, newspapers delivered on e-paper will be a new forum for digital, personalized advertisements.   http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13047 

Do the expectations of Best Buy and Toys “R” Us for the holiday season suggest that it may turn out better than is commonly thought at present or are these retailers possible exceptions to the gloomy rule? What is there about one or both of the two chains that makes you expect that they will have a strong 2008?

Yes, I expect the holiday season will turn out better than is commonly thought at the present. Our latest Consumer Demand Index is in negative territory for the first time ever, but consumer buying intentions for specific durable and non-durable goods are down only marginally or in some cases even stabilizing. The explanation is again in the large percentage of consumers (56%) that are in a wait-and-see, sit-on-the-fence mode, declaring themselves not ready to make any major purchases in the next 3 months.  This uncertainty and insecurity are being driven by pronounced price increases for food and fuel, which have been sudden, rapid and pronounced. Consumers don’t know if these increases are temporary or not, and so are cutting back drastically on discretionary spending. In fact, 78% of Americans think the US is in recession (it isn’t–the economy grew .9% in the first quarter), even though 72% rate the financial situation of their own household as “good.”  What else is there about Best Buy and Toys “R” Us that makes me expect that they will have a strong 2008 holiday season? Electronics and toys are always strong in the fourth quarter; our 7 years of CDI data confirm it. [Feel free to email me for a free sample issue.]  http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13040

Filed Under Seasonal Forecast

How do you see this experiential retailing trend working its way across retail? Are these strategies somewhat limited to specialized concepts? What are some of the best and worst examples of experiential retailing in the marketplace?

In an age of commoditization, consumers shift their focus from product and service attributes to the experience obtained while using the product or service.  The more relevant and memorable the sensory experience, the higher the value, the higher the worth, the higher the price that can be charged.  Customers are actively engaged, involved–they have a relationship with the product, the brand, the company.  Needs, wants and desires are fulfilled.  Bottom line: the experiential is never a commodity.  The experiential = differentiation/competitive advantage.  A great example of experiential retailing is L.L.Bean.  At their flagship store, Bean is developing a family-friendly outdoor adventure attraction with lodging amenities.  Visitors will soon be able to hike, bike, golf, cross-country ski, or go kayaking, seal watching or fishing in nearby Cisco Bay.  Then they could eat and stay the night on the property.  Is this a savvy move? Very much so.  Roughly 3 million people walk through the Freeport stores every year, making L.L.Bean Maine’s second-most popular tourism destination behind Acadia National Park.  In recent years, Bean has branched out into recreation through its Outdoor Discovery Schools, where customers take lessons for activities like fly-casting or kayaking.  These activities are very popular, and Bean has found they generate good customers who buy products.  Creating a destination adventure center such as the one being discussed–where people can stay and participate in these and other outdoor activities–takes the formula to a higher level, and would propel Bean from being a store, mail-order retailer and a brand into a full-fledged outdoor experience.  Bean is on a fast track to make the project happen: it wants to see the theme park operating within three years.  Bean operates seven full-price retail stores and 14 outlets on the East Coast.  It plans to open 35 more full-price stores within five years, and future stores also could be linked to outdoor adventure centers in other states.  Experiential retailing is a trend with staying power–people increasingly want to combine leisure, travel, learning and family vacation time–and adding retail to the mix is a brilliant gambit.  http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13030 

Filed Under Lifestyle & Culture

Would it benefit Amazon to add Borders’ bricks to its existing clicks business? Do you think Amazon can go on indefinitely as a pure-play e-tailer or will it eventually have to open physical store locations?

This is brilliant, inevitable, and necessary, as I have been saying for 8 years! Multi-channel, then merged-channel is how best, most successful retailers operate today and in the future. Even dedicated Amazon users will gladly visit physical stores for the total experience, where they will be able to access in-store terminals with with their accounts, history, etc. The Borders operation is a very good one; I see this as a win/win/win, with expanding visits, sales, profits, growth (and rising stock price).

Can Amazon go on indefinitely as a pure-play? No, that’s the point–they would be limiting their potential. It won’t be easy, and has to be done right, but it is the way to go.

http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13024

Filed Under Business Strategies

What lessons are there for developers, retailers and consumer brand marketers in the Baldwin Park experience? How quickly is acculturation taking place within Latino communities and how do marketers successfully navigate the differences in evidence in Baldwin Park?

What we see here is a clash of first, second, and third generations. You really do have to know which you are dealing with, whether as a developer or a retailer. There’s a lot of expertise here in LA, but either these guys didn’t tap into it, or were ready to rely solely on what a demographic report was telling them. They sure as heck didn’t call me!

http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13008

Filed Under Consumer Behavior