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December 01, 2009

New retail realities

Many observers of the economic scene say we're in a new economy, one where buying everything we want when we want it is over. How will this new economic world show up in retailing?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Retailers are really struggling with this right now, because they do think that a new era in consumer spending is coming upon them, and it's not necessarily going to be a good one. Some of the things we think retailers are going to embrace are, for example, having less stock available. They're going to want to keep their inventories very, very lean. So you may have to wait longer in the future for some things, because the shelves aren't going to be overflowing. Retailers are going to emphasize lower prices, but they're going to discount less. And when they do discount, those discounts are going to be much more targeted. Retailers are also going to promote one-stop shopping. They know that consumers with tight budgets aren't going to drive around and shop as much, so retailers are going to want to do as much as they can to say to the consumer, hey, you can get everything you want right here. I think that's going to change the composition of products in many stores. And finally, retailers - and of course, they've always done this, but they're going to try even harder now - they're going to try to stand out, to stand out from the crowd. And some retailers interestingly right now are focusing on higher prices. They argue that we actually have the higher quality product and the higher prices to make them stand out from all the lower prices that I think we're going to see more of."

Posted by Dave at December 1, 2009 08:00 AM