Editor’s Letter

Dare I say that specialty retailers have a reason to be optimistic when it comes to the future?

The Retail: Next Studies from RetailWire and Dechert-Hampe & Co. released a series of research studies at the beginning of the year that analyzed emerging trends in retailing. The survey results were a composite of 228 manufacturers/vendors, retailers, consultants and agencies, and just over half (54 percent) of all respondents think the retail industry will experience modest or better growth” over the next five years.

Looking at it that way, one could be optimistic. Looking at the fact that almost half of the respondents see no growth, one could continue to be concerned. Either way, there are steps that retailers can take to better prepare themselves for whatever the future holds.

Some of the findings include:

Winning formats will not focus on “what to sell” so much as “how to sell it.”

Traditional product-focused attributes of retailing are expected to take a back seat to how — and where — the shopping experience is offered. For example, stocking national brands and a broad assortment within a category fall in the “much less important” tier of format attributes.

Winning formats will focus on consumer groups – not product groups.

Targeting consumer groups, such as seniors, teens and ethnic, is predicted to be a format winner. While certain product groups and fads may fade in and out, there are certain consumer characteristics and lifestyle changes that have remained strong— more digital lifestyles, a busy family’s need for convenience and the rising population of Hispanics and Baby Boomers. Instead of pushing product groups, focus on the groups and what products they may need.

Unique formats will prosper — multiple chains within a format will not.

Respondents overwhelmingly predicted continued fallout in the number of chains that can exist within a given format. But they also expect the number of unique retail formats to grow over the next five years. They note that much like Whole Foods and Trader Joe’s have developed as icons synonymous with organics and the treasure hunt, successful stores will own their own unique concept.

The current economy is having an undeniable impact on retailing, and the search for value will not go away as a retail driver — but its importance will be trumped by other attributes of the consumer’s shopping experience.
A third of respondents said “economic trends” would be the major source of successful new retail formats. But over half said “changing consumer habits” would trump the economy as a key driver. The single highest rated factor in importance to the future of current formats was “value for the money” â but the next six are all related to the consumer experience.

So what does all this mean for you, the independent retailer? It could mean that “who you are selling to and how” is going to trump “what you are selling” in the future. By knowing your customer and your market — and playing to those strengths — you may just find that you’ve bucked the trend.”