TO DERAIL U.S. RETAIL
Retailers, the major beneficiary of the ‘90’s surging economic expansion enjoying the ride to increased sales, gross margins and profits are facing substantial reduction in their customers exuberant spending. Bulging consumers pockets provided retailers the opportunity to raise prices and margins with little resistance, expand, add category offerings, cover-up assortment errors, consume markdowns, take advantage of expanding credit based transactions.
The surging economy
stuffing consumer pockets and encouraging their spending enticed retailers
to expand facilities, increase product offerings, add categories and strategies; producing over capacity
in their struggle to increase sales and profits to satisfy the
financial investment markets. An
example; Food Supermarket chains have ventured across parking lots to steal
business and market share from their non-food neighbors by adding
decorative home, table top, bed and bath, beauty products and other
categories to their assortments. And
non-food stores have added food and other consumable items to build both
volume and daily traffic
There is new competition everywhere
from new strategies selling the same products in a new brick and mortar
format and the rapid rise of Internet based retailing adding the effect of
millions of more square footage to an already over-stored industry.
Millions
of square feet of square feet of physical retail space supplemented with
growing accumulation of virtual/electronic retail square footage produces
marginal productivity results with a surging consumer economy . . . A
condition destined to plunge productivity to unacceptable low levels,
sending retailers in their quest for survival scrambling to avoid Chapter
Eleven.
Running parallel to over capacity, inflation and increased competition is the over sized assortments lining retailers shelves, Internet pages and warehouses; the result of not wanting to miss any potential sales . . . A condition requiring immediate attention if retailers expect to achieve acceptable levels of return on inventory investment.
Then there is the "Last Twelve Inches" . . . Moving product the last twelve inches off the shelves into customers hands, through the checkouts and out the door with point of selection communication graphics focusing on raising shoppers "Comfort Level" to the point they commit to purchase . . . A retail survival strategy missing in today's retail environments; also requiring immediate attention.
Planning
Over the past two decades corporations have developed "Emergency Disaster Plans" in anticipation of natural disasters, potential terrorism attacks, sabotage, etc.. Plans detailing both defensive and offensive strategies for quick launch in response to potential disasters. Today retailers need a series of "Disaster Response Plans" in place for an assortment of various revenue reductions . . . Keeping in mind there is not a FEMA for retail disasters.
