The Catalyst

The many events over the past few months, particularly those in recent weeks, will have a profound and long lasting effect on consumer shopping habits. Here are a few quick points.

• Research tells us that these are troubled times…potential financial collapse, high gas prices, big-business closings, mortgage foreclosures, and more, have created a seismic shift in consumer shopping behavior that will have permanent ramifications.
• The losers…mid-tier companies with moderate “ho-hum” appeal. Today, large chunks of consumers are searching for answers on how to adapt. Therefore, retailers must respond to the changing consumer value equation…the elements that drive value have changed.
• Who do you trust? That’s the question the “results now” consumer is asking. People are shaken to the point where the lack of trust in institutions, and in a growing Global environment, has never been lower. There are exceptions in the retail world, and those exceptions are being rewarded tremendously. How well do you know the key elements of trust that can increase sales?

The dynamics are already there, and the shift in consumer buying habits is clearly evident. It will be more so during the upcoming holiday season. Retailers must start to adjust now. This holiday season is not expected to generate large sales increases (The NRF projects a 2.2% lift). Thus, retailers must recognize the need for new tactics that will help to grow the business during the near term, and beyond. The top priority will center around a strong value position…not just an emphasis on “sale.” This must be coordinated with a concerted effort to build customer trust, and artificial acts aren’t the answer.

A dedicated action plan is essential…one that recognizes the new consumer priorities. Just remember that this will continue well beyond the upcoming holiday season. Be ready. Use every available resource to increase your knowledge and understanding of the consumer buying behavior in your market. Positive action will increase the probability of success.

William “Mac” McDonald has worked as a Senior Retail Marketing Specialist for over 40 years, focusing on consumer actions that affect retail tactics and strategies. An advisor to the National Retail Federation (NRF), Mac can be reached at Mac@ESACompany.com.