NEW YORK — Retailers and manufacturers still reeling from the Great Recession of 2008 to 2009 and the changes in consumer behavior that it triggered might do well to brace themselves for the next decade, which promises to serve up more change.
Retailers and manufacturers still reeling from the Great Recession of 2008 to 2009 and the changes in consumer behavior that it triggered might do well to brace themselves for the next decade, which promises to serve up more change.
A panel discussion titled “Consumer 2020: What Lies Ahead for the Retail Industry” at the National Retail Federation’s Big Show here explored the opportunities and challenges confronting retailers around the globe. The session kicked off with a concise yet comprehensive overview of the ongoing effects of the recession worldwide and the most significant possible changes looming for the world economy.
According to Ira Kalish, global director of Deloitte Research, many of the most important changes will involve the United States and China. With Americans forced to pay down their consumer debt in the wake of the burst housing bubble, the United States will have to focus more on exports to sustain its economy.
China, on the other hand, needs to spur domestic consumer spending to make up for a decline in exports as higher wages and value-added processes are adding costs to the country’s manufactured goods. Growth will move increasingly to such emerging markets as India, China, Russia and Brazil, where middle classes are expanding rapidly.
The revolution in communication technology, especially the current explosion of social media, gives ultimate power to the consumer, Kalish said, and represents a huge challenge for retailers.
In the following panel discussion led by Alison Paul, Deloitte’s vice chairman and U.S. Retail leader, Andrew Higginson, chief executive of retailing services and group strategy director for Tesco PLC, agreed that technology is creating discontinuity in the consumer market. "But we also see that discontinuity creates opportunities as well as challenges," he said. "Consumers are being challenged by having more choices, and the opportunity for the retailer is to step in and help them make those choices. And one way to do that is to really understand the customer."
He added that while Tesco has an enormously successful loyalty program that yields tremendous customer insights, the company has not felt compelled to move aggressively into social media. He suggested as well that retailers need to tread a fine line between providing wanted information and intruding on consumers’ privacy.
Peter Sachse, chief marketing officer of Macy’s Inc., noted that social media are enabling consumers to demand a two-way conversation with retailers and predicted that mobile wireless technology will soon be everywhere, enabling shoppers to compare prices of different retailers and walk out of a store whose prices are not acceptable. While some retailers are reluctant to enable Wi-Fi in their stores as a result, Cathy Green Burns, president of Delhaize Group’s Food Lion family, urged embracing it as a means to achieve "deep personalization."
"Retailers who really understand their customers and can take action based on those insights, are going to be set up very well for 2020," she said.