A week surrounded by retailers, manufacturers and consultants from around the world at the 14th annual National Association of Retail Marketing Services (NARMS) conference was the ideal opportunity to see and hear first hand how the global recession is being addressed.
Colorado Springs hosted the conference this year, with a very different approach to topics and subjects than previous years. Without exception attendees reported declines in spend in some areas of retail activity, matched by significant growth in other areas.
The constant theme was of innovation and creation of great shopper experience, termed “giving good aisle” by Paco Underhill, author of Why We Buy and global retailing guru. It served to remind us that through all the gloom, many manufacturers and retailers are doing very well indeed. They are doing well by adopting a limited number of key focus areas within their retailing mix, against a clear understanding of how shoppers are thinking.
So how are shoppers thinking?
Shoppers have clustered into three groups. The first group is those that have actually lost their job. From CEO to fork lift driver, this recession is different in that it doesn’t fall on any one industry, work type or level.
The second group are those who know someone who has lost their job, and the third group are those who are still wealthy, but just less wealthy than before.
All three are linked by the common mentality that paying full price is just not acceptable. Shopping for a bargain is now a badge of honour.
In the first category, people only have a limited budget to spend. They cannot flex the $200 a week they have. They shop from a list and stay within the list, with very few impulse purchases.
The second group are just nervous; they haven’t seen any drop in income, in fact their disposable income has increased along with their purchasing power. They just need the confidence, or emotional stimulus, to spend.
The third, and wealthiest, group can continue to spend but consuming conspicuously when others are hurting is just bad manners. They have postponed purchase of luxury items, and have adopted the secondary market for the first time and are now buying used luxury cars and boats.
What this means to all retailers and manufacturers is that the need to reflect large clear pricing, supported by strong displays of stock around core items within retail stores or dealerships and showrooms needs to be paramount.
If you’ve created the desire in the shopper to come into a store, don’t miss the dollar because your display is poor, stock is insufficient or your store staff don’t know it’s on promotion.
Importantly, neither retailers nor manufacturers are setting the price. Shoppers are deciding what’s important and what they are willing to pay.
A week at NARMS always makes your head spin, and it simply isn’t possible to capture the week in one blog. So over the coming weeks I’ll blog on ‘What’s the real price of a pair of shoes’, ‘Hip to hip via triangulation’, ‘The 5 new rules of retail’, ‘Category creep’, and ‘Back to the route trade’.
In closing, if any of you reading this blog don’t have a copy of Why We Buy or Call of the Mall then you are missing the work of the best minds in shopper marketing. Read them and you’ll never shop the same way again.
In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.
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