With the bustle of the holidays now behind us, it’s time to focus on our retail strategies for the New Year. To help you with your planning, here are Blacks’ forecasts for 2011 and the important areas we believe retailers should focus on if they want to continue to grow and adapt in the current retail cycle.
The New Year should bring continued growth, but not at the rate we’ve seen in 2010 since we’ll be further along in the recovery and going against stronger numbers. We expect sales among brick-and-mortar retailers to be up around 7% to 8% overall, which is a bit lower than the 10% growth rate we saw this last year.
Established online retailers will fare even better, and could be up by as much as 25% to 30% in 2011. Online retailers really showed off their strengths over the holiday season, posting double-digit growth, and there’s no reason to think that they won’t continue to build on that success.
Marriage of Marketing & Merchandising
One reason why online retailers have done so well is that they are very good at marrying their merchandising strategy with their marketing strategy, and bringing it all together in one consumer-facing platform. This differs greatly from how traditional stores have worked in the past. Usually, retailers would buy far in advance and work their marketing strategy out later. The problem is the merchandise and marketing didn’t always coincide—trends and consumer sentiment may have changed since the merchandise was bought, and the economic climate may have shifted.
However, in a fast-paced online world merchandisers buy on an almost continuous basis with marketing top of mind. Now, when merchandisers are selecting items they are thinking (or should be thinking!), “How am I going to market this?”
If you haven’t already adjusted to this new pace of tandem buying and marketing, this year is the time to do it. It doesn’t matter if you are a brick-and-mortar or online retailer—you should be landing merchandise every month, if not weekly, and have a marketing strategy in place to promote those goods.
For better or worse, the recession has left consumers expecting ongoing promotions to inform them of new merchandise and great deals. The good news for retailers is that you can design these as brand-building promotions aimed at growing your customer base and solidifying your relationship with customers.
When it comes to promotions, don’t just think of markdowns—think of creative ways to engage your customers and entice new ones. Online marketing is great for brand-building promotions because you can reach people where they are comfortable, at home, in interactive ways.
(For more on innovative marketing strategies see “Rev Up Your Marketing with a Multipronged Approach.”)
Invest in Analytics
Once you have your merchandising and marketing strategies in place, you must have a way to measure your success. This is where analytics, or business intelligence, come in. Chances are your current inventory system tells you a lot but it doesn’t tell you how specific products performed using certain promotions. It also won’t tell you which of your vendors are performing the best and which are not, and exactly when to markdown items and still retain margin.
However, by implementing analytics into your current system you can have these answers at your fingertips, allowing you to make smarter decisions, quickly. And, investing in analytics is more cost effective than investing in a new inventory system.
(You can learn more about the advantage of analytics by reading “Make Informed Decisions and Plan Future Growth with Blacks Analytics.”)
Finally, remember that this new year is giving you the opportunity for a fresh start. Part of this opportunity is a chance to be innovative. If you don’t innovate, you will die. The competition is moving too quickly for you to rely on old patterns. So get out there, test strategies and measure your success. 2011 can be a great year if you make it one.
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