If you do one thing this year to increase your numbers, what will be the top priority?

Here is the leading answer, with an article excerpt, and a note from me at the end.

I will say this: You will need to Prioritize –

1. Knowledge

2. Influence

You need to really know the minds, and spending PATTERNS of your customers, and your in store traffic (yes, that includes physical stores and web store/sites)

Author: Bill Gerba on 2006-11-17 07:45:47

The good folks at Reveries Magazine have once again conducted a survey that highlights some of the prevailing opinions about in-store marketing. Their Shopper-Centricity Questionnaire looks at the recent phenomenon of “Shopper Marketing” and tries to determine whether it’s a powerful new strategy or (as some suggest) simply a re-badging of existing, common practices for informing customers. Given that nearly 70% of the 170 respondents listed shopper marketing as either an “important” or “extremely important” part of their 2007 marketing strategy, there’s clearly a renewed interest in how to focus marketing activities on the shopper. With this in mind, I was quite eager to look through the results and see if everybody really is on the same page.

What is shopper marketing?

Oddly enough, the Reveries survey doesn’t actually define the term “shopper marketing,” instead preferring to let the respondents decide if it’s something they engage in, and if so, how important it really is. A Google search for the term and a trip to all of the usual marketing resources on the web also don’t turn up much. But if we apply some common sense, “shopper marketing” can be in-store marketing, loyalty marketing, or even customer relationship management — basically anything that eschews broadcasting ads to the masses in favor of systems that narrowcast relevant, targeted ideas and messages to the individuals who will value them most, thereby improving the overall shopping “experience.” There’s a key distinction between “customers” and “shoppers,” and this is key to the entire idea of shopper marketing: a customer is someone who has purchased something from you before (and who may or may not do so again in the future). A shopper, on the other hand, is someone who is actually engaged in the action of shopping, whether by looking through your catalog, browsing your website, or roaming the aisles of your brick-and-mortar store. Ideally, the right messaging helps convert shoppers into (repeat) customers.

What do marketers think about it?

Many (myself, at times, included) have romanticized shopping into an exciting, social quasi-sport that’s about as far as you can get from your typical 7 pm quick top-off trip at the local supermarket — and there are arguably millions of people who enjoy shopping as a pastime. However, for every shopaholic sitting outside of a department store at 5 am on Black Friday, there are thousands of others who shop out of necessity, and that means millions upon millions of opportunities for retailers and CPGs to deliver a pleasurable experience, whether through innovative product selection and placement, an exceptional in-store environment, or a conversation with a knowledgeable store employee. And if you look at the statistic that I mentioned in the opening paragraph, retailers and product marketers clearly seem to understand just how important those opportunities are: about 70% of the 170 respondents listed shopper marketing as either an “important” or “extremely important” part of their 2007 marketing strategy. But add in those who consider it “moderately important” and we’re up at nearly 90% of respondents, which indicates a pretty significant trend to me.

Why isn’t everyone using shopper marketing?

Barriers to adopting shopper marketing as a major part of an overall program or campaign included all of the usual suspects, including lack of budget/resources, lack of management commitment and the like. However, almost equal to those was a “Lack of a commonly understood Shopper Marketing definition within your company (or client),” which was reported as a problem by 41% of respondents. That’s interesting to me for two reasons: first, it says that shopper marketing is a discipline that doesn’t have clear, uniform boundaries (or perhaps it’s an amalgam of existing marketing practices whose new moniker hasn’t yet caught on). Second, the idea that shopper marketing could be different for every company says that one marketer’s idea of what it entails could be completely different from another’s. That makes the job of putting together a shopper marketing program a tough one, but it also suggests that the demand for such services should be high. When asked which factors are most important to becoming an effective shopper-centric organization, an overwhelming 73.9% responded that having a clear idea of why “understanding one’s target consumers as ’shoppers’ — as opposed to just ‘consumers’ — is important,” and right now, it would seem that there’s a strong need to find marketing experts that can understand this critical distinction.

What are the benefits (sales, loyalty, ROI, etc)?

In terms of the perceived benefits of implementing a shopper marketing program, 42.7% of respondents believed (or hoped) that it would yield increased sales, while others predicted improved customer loyalty or overall ROI. In terms of soft benefits, respondents also expected effective shopper marketing to yield improved relationships with customers (30.2%) and a better understanding of the shopper’s needs (31.5%). That last one is a bit puzzling, since I don’t quite understand how you’d effectively market to your shoppers without knowing what their needs were in the first place, though as one of many tools in the analytics toolbox, responses to existing marketing programs can certainly be used to improve future marketing programs. On the topic of ROI, most respondents believed the ROI of a shopper marketing program to be 50-74% better (45.3%), 75-99% better (14%), 100-124% better (4%) or even more than 125% better (3.3%) than traditional trade spending, though a quick read through the write-in responses for this question shows that a lot of people think it’s too early to tell. Despite this, it’s pretty amazing that two-thirds of respondents find that shopper marketing yields a higher ROI than traditional practices, and with improved methodology (as time goes on and marketers have a chance to refine their techniques) the results should only improve.

Caveat emptor

While the findings from the Reveries survey are certainly interesting, there’s one big problem with taking them at face value: only about 5% of respondents said they worked directly in retail — the bulk were from agencies or related service industries. Now, I know there’s been a lot of buzz lately about major retailers hiring agencies to improve the store experience, but for the vast majority of retailers most in-store decisions are still made by corporate, not an outside agency. Thus, the results from the survey may have been somewhat self-selecting: those agencies and service companies that have experience with shopper marketing (or want to turn it into a revenue stream) were more likely to respond, potentially skewing the results.

Still, the news looks good for those of us who spend our time thinking about how to improve the store experience. Everything about a store — from layout to lighting to signage — can (and should be) improved to make shopping easier and more fun. These efforts tend to help shoppers find what they want and encourage them to spend more time actually enjoying themselves while shopping. Companies like Apple and Starbucks clearly get it, and even behemoths like Wal-Mart are working hard to catch up. So if you still think your retail firm can get away with offering the same bland experience to your customers, perhaps you might want to reconsider. While making your plans for 2007, leave some room for a few simple shopper marketing experiments, and consult your agency, partners and outside experts to help with your store experience planning. Shopper-centric marketing programs are on the rise, and based on the numbers above, they can not only improve your customers’ relationships with your store and your brand, but also drive increased sales and stronger ROI for your marketing dollar.

Let’s put a new lens on the future of shopper marketing.

I’ve pasted a link below and took some excerpts out of the article

http://www.hubmagazine.com/archives/the_hub/2010/jan_feb/the_hub34_mars.pdf

We propose a new diagram as a better way to depict the current landscape of shopper marketing relative to reality only a few short years ago (see chart one). We can use the right column as a checklist of things that require action in today’s version of shopper marketing; full engagement in the discipline means actually delivering something against each item. The practice of shopper marketing is evolving rapidly, with sophisticated retailers expecting manufacturers to bring solutions that drive trips, leverage the potential of the total store and grow basket size. Use this diagram to help make the transition from yesterday’s way of thinking to tomorrow’s action plan simpler and more effective.

We can use the right column as a checklist of things that require action in today’s version of shopper marketing; full engagement in the discipline means actually delivering something against each item

The new shopper-marketing landscape has changed from CPG to Retail

Yesterday

Today

Consumer

Shopper

Top Down

Bottom Up

Brand Management

Shopper Solutions

Category Share

Shopper Share

Transactional Data

Shopper Insights

How They Shop

Why They Buy

Talk To

Talk With

Media Silos

Everywhere Messages

Creative Isolation

Integrated Campaign

Isolated Innovation

Collaborative Innovation

Snapshot of a solution. To win where the shopper’s decision is really made, marketers should move beyond home-based demand/consumption thinking to full path-to purchase understanding and messaging. We’ve coined the progressive path to planning all marketing activity as “shopper-designed” planning. This planning rigor has been in place for years within many progressive agencies and manufacturing companies, and may well be the defining principle of a retailer-specific view on shopper marketing processes for the future. When the initiative works as a solution for the shopper and builds traffic/basket size for the retailer, and grows a brand without undermining the category, it makes the cut. When an approach or concept supports a strategy that both the manufacturer and multiple retailers have in common, it should ladder up to be considered by the manufacturer as an integrated national program that marketing dollars can support across a range of timeframes that make sense for multiple retailers

Get started, with a great snapshot of customers and traffic, there are innovative ways to gain insight and influence, you need to know for 2010.

Here is an idea whose time is long past due.

What do you really know about your customers and your store traffic, and if it is a web store, what do you know about the traffic there?

You probably have some metrics that tell you traffic totals, conversion rates, average sales etc…

What do you really know about their needs, thoughts, and aspirations?

How much is it costing you in lost sales, poor performance, and MISSED OPPORTUNITIES?

The example below, demonstrates the value of really knowing your traffic and your market, as well as your customers.

Retailer Caters to the Recently Divorced (only 50% or more of the adult population right?, so not very important?)

By George Anderson

Lindsay Conway, director of social services in the Presbyterian Church in Northern Ireland, finds it “very bizarre.”

Debenhams sees it as a social service and an opportunity to drive sales in its stores.

The “it” here is Debenhams’ Divorce Gift List registry service, which was launched earlier this week to help people who have ended their marriages get on with the rest of their lives.

Peter Moore, head of retail services at Debenhams, told the Belfast Telegraph, “With so many couples now living together before they marry, the Wedding Gift List concept is now regarded as more of an upgrade service, rather than stocking up the first home with the basics.

“However, a divorce means that one partner will be leaving the marital home and therefore be left without any essentials in their new house.”

Among the items the recently divorced often need include dishes, glasses, linens, towels, microwaves and toasters.

“Divorcing can be an expensive time and registering for a Divorce Gift List means that family and friends can help the newly separated begin their new life,” Mr. Moore told the Telegraph.

Richard Dodd of the British Retail Consortium, told CNN, “It’s about focusing on what your customers need and want, and of course looking for new opportunities.”

Great idea, pray tell, how will you excel this coming year?

Well here is some fresh thinking: And at the end, I will tell you a better way to get results

By Dan Alaimo

Shoppers do not necessarily fit into the demographic boxes marketers have traditionally used to develop promotional and sales programs. When consumers are divided into three groups based on shopping behavior, the usual definitions of size of household, income and age do not apply any more.

As a result, retailers and marketers have to rethink what drives the consumer to buy, said Mack Hoopes, manager of shopper insights at Henkel’s Dial Corp. More specifically, what is needed today is a better way to help retailers understand how their customers prefer to shop.

That was the central finding of new research from Henkel Consumer Goods, Scottsdale, Ariz., which markets Dial and Purex among other prominent brands.  The company is now presenting the study results to retailers, Hoopes told CPGmatters.

“We are helping our retail partners identify the proper timing of communication, and the type of communication by category to shoppers so they can increase baskets, trips, revenue and profits,” he said.

The study was published in the spring, and retailers are seeing it for the first time this fall, so “we are fairly new at this,” and there are no measurable results yet. “It is getting a very positive reception from our retailing partners, and we are understanding together how we can execute behind this.”

The company hopes the study will help retailers attract new customers, and then communicate to them with clarity and precision. The research will enable retailers to “understand which categories attract them and which categories don’t attract them so they can be more efficient operators,” he added. At Henkel, “we think we have some brands that play into that, and drive some of those attributes.”

Hoopes presented the results of the study at the LEAD Marketing Conference recently in Chicago. Using a common market research presentation technique, the study named the three groups as: ‘Shoptimizers,’ ‘Mainstreeters’ and ‘Carefrees.’

Shoptimizers is “a group that takes a lot of time pre-planning their trips, reading ads, cutting coupons, organizing lists. They spend an inordinate amount of time doing that,” Hoopes said.

Mainstreeters is a “group that says, ‘I don’t have that kind of time’ or ‘I don’t want to spend that kind of time.’ ‘I’m just going to go to the store with my simple list. I trust the store and I’m going to buy what I have to.’”

Carefrees are not responsive to marketing messages. “They are not going to spend any time (preparing to shop), and they are the kind of people who buy what they want when they want to buy it. Regardless of pricing or promotions, they are just going to go in and get what they want,” he said.

But the most surprising finding of the study was that none of these behaviors can be predicted based upon current demographic information. “Regardless of how much you make, how old you are, or how many people in your household, you could actually be anyone of the three behavioral types.”

So as a result, “we have to rethink how we go into the marketplace because each of these groups responds to the stimuli that manufacturers put in front of them very differently. It requires thinking about how we are communicating with the shopper and at what point in their shopping trip – or shopping style – we are going to talk to them,” he concluded.

Retailers and manufacturers need to evaluate implications in four areas, according to Hoopes’ presentation:

• Retailer Positioning Realize that different groups frequent different formats. There are opportunities to appeal to certain segments and define their place in the market, while taking into account key behavioral tendencies of core shoppers.

• Retailer Segmentation The study suggests more relevant and impactful ways for store clustering. Retailers can determine what type of shopper they want, and develop marketing and merchandising strategies to appeal to them.

• Promotion Targeting Shopper segments react differently to various messages and promotions, so focusing on what the desired segments respond to can lead to more effective targeting.

• Product Distribution The study could lead retailers and other marketers to rethink the 100% ACV (all commodity volume) objective. Some stores or store formats may not need to carry some products depending on the purchase behavior of their    core shoppers.

In conducting the research, Henkel, led by the Dial team which includes Hoopes, analyzed over 300 categories from 2006 through 2008. The company is continuing to track these segments to determine how or if shopping behavior patterns change during 2009 and beyond. Besides Dial and Purex, other Henkel brands include Combat, Dry Idea, got2b, Loctite, Renuzit, Right Guard, Soft & Dri, and Soft Scrub.

Summing up, Hoopes said retailers and manufacturers need to take a closer look at “what drives their shoppers to buy: where they buy and the types of media or vehicles that would stimulate them to buy.”

Integrating the latest cutting edge market research tools that measure emotional response and linkage, to a top grade tool to measure buying habits and patterns, with regular buyer and non buyer surveys, will help you understand what makes consumers tick.

Retail Winners get to know customers on an intimate basis.

Cut through the noise

Increasing Retail Sales Now – More Customers More Often Buying More

Executives ask one question on an almost weekly basis: “How can I differentiate my company in the marketplace?” My reply to every president, chief executive officer, or vice-president of marketing is always the same: “Why do you want to be different?” We are swimming in an overabundance of products and services. “Different” is no longer a differentiator.

What is? Creating a RELEVANT brand, offering and relationship with your customers and market.

What world do you live in as a retail executive?  Do you really understand your customer and the pressures of the marketplace?

Consumers are changing like quicksilver now.  They are far less brand loyal, they search for deals and value, they prioritize what they need differen

 

Consumers seek meaning and a brand they can trust. They are busy at work on Web 2.0 platforms creating ways to cut through the noise in search of products and services that resonate with integrity and transparency; in a word, authenticity. That quest for authenticity is a call to action for any company intending to be relevant in the 21st century.

Step Back and Consider Your Brand

As the marketplace has shifted, so too must your brand offering and service contract. A single, beautifully designed product offering and service contract is nothing, if it is no longer RELEVANT TO BUYERS IT IS AN OPPORTUNITY WAITING FOR a company that will take the time to understand three things: the deep-seated desires of its customers, its own DNA, and the sweet spot where the two overlap.

What is the right approach for innovative companies to take? First, take a step back before introducing just another product. Decide who is your true tribe and what makes the most sense for those customers and your company at a particular time. Push the pause button, dig deeper, and reconsider what it would take to make your customers truly love who you are as a brand.

Back in 2001, Umpqua, a regional bank in Oregon founded to provide loggers and farmers a banking alternative, approached Ziba, my design company, to help redefine the banking experience. Instead of getting to work designing right away, we had to discover what banking meant to Umpqua’s customers. What were their attitudes about banking in general? How did community banks like Umpqua, with its 65 branches, fit into that picture? How did large commercial banks fit into that same picture? With the convenience of online banking and ATMs, what would motivate customers to go into a bank in the first place?

Customers Crave Personal Service – RELEVANCE 101

Next, Umpqua had to understand its own culture. What did Umpqua believe in? What was it good at? What did it stand for? What could it stand for?

After researching these questions thoroughly, Umpqua found its customers were craving intimacy. They were tired of the impersonal service they received from regular banks and suspicious of financial institutions in general. While other banks were competing with a convenience strategy centered around the Internet and ATMs, Umpqua identified an opportunity to provide customers with a “slow banking” experience that was both inspirational and encouraging. This translated into comfort and personal service—a hotel/retail metaphor with a modern-craftsman aesthetic.

The result was a flagship store in Portland’s Pearl District that delivered an unprecedented banking experience tailored to the specific needs of Umpqua’s customers and the unique expression of Umpqua’s DNA. It also happened to make Umpqua a lot of money. The first week the store was open in April, 2003, it generated $1 million in deposits. Nine months into the first year, the new store had a record $50 million in deposits. Since then, Umpqua has rolled out stores based on this template in other cities in Oregon, and created a smaller version for smaller neighborhoods.

Starbucks Recovers from Disaster – RELEVANCE 101

Customers will forgive brands with which they feel an authentic bond. Starbucks (SBUX) is the story du jour of a company whose strategy went from grassroots to gimmicky somewhere between the original handful of stores in 1982 and the more than 15,000 in 43 countries today. By its own admission, the company lost sight of who it was and what their customers wanted.

However, CEO ’s process of recovery from this potential brand disaster is what makes this story so compelling. Schultz chose the path of integrity: He publicly admitted Starbucks’ role in its own decline and invited others to participate in the company’s recovery. Transparency is a requirement for companies striving for authenticity. And, from his public admissions all the way to the launch of the social networking site mystarbucksidea.com—which invites customers to submit store improvement ideas—Schultz has embraced this concept in spades.

Now, instead of the media focusing on the dilution of the brand, the press and the blogosphere report on how Starbucks rediscovered its DNA. While the future remains to be seen, my bet is on it recovering gracefully.

The Art of the RELEVANT Relationship– RELEVANCE 101

The women’s clothing store Anthropologie is another modern, authentic success story—with a twist. Anthropologie’s retail environment is an artful rendition of a French market that creates a mood of discovery and whimsy. While the merchandise is a unique mix of found objects from around the globe, the store is as close to a genuine French flea market as is the French bread sold at Safeway (SWY). However, customers have been known to spend over an hour in a store and close to $80 a visit.

Anthropologie has made an art of the authentic relationship. The company’s customer is not a roughly sketched demographic. Nor does it expect to sell to everyone with a one-size-fits-all approach. Anthropologie has dug deep into the subtleties and nuances of the psychographic profile of a specific type of thirtysomething married woman. Anthropologie outlets are an extension of her adventurous, bohemian-chic self that doesn’t get much play when she’s juggling a career and kids. Connections like these accounted for growth of 18% in the fourth quarter of 2007 in an overall disappointing quarter for the women’s apparel sector. Not bad for a company that doesn’t advertise.

Let Your Customers Be Themselves– RELEVANCE 101

This is what it means to forge an authentic relationship with your customers. It’s not the kind of relationship that lasts for only one season or that comes on suddenly because your product is cheaper or more beautiful than another’s. It’s the kind of relationship that emerges because you offer something that caters to an essential desire and makes your customers feel they can be themselves. It’s the kind of relationship that allows for mistakes and creates a bond of loyalty. And having established an authentic bond doesn’t mean you can rest on your laurels. People change, trends change, and you must always be willing to reinvent yourself as both your company and your customers evolve.

If you follow this approach, your true tribe will love and reward you for it, then spread the WORD—your business depends on it.

More than anything we help you target what drives revenue, membership and growth.

Here are some of the recent results that my clients have gained with this approach

·         One fitness client increased retention by 15% with some small but critical changes we helped identify – not only the problem, but a simple to implement solution.

 

·         We recently increased sales by over a million dollars for a mid sized retail chain.

 

·         We have uncovered 42 million in lost revenue opportunities for a National grocery chain and we are now helping them grab the opportunity.

 

·         Do you need low cost/ high return strategies for Customer retention and referral growth?

 

Our clients focus on adding revenues, and we become a measurable, profit centre for them.

My clients want more revenues now, and we are delivering.  

 

Increasing Retail Sales Now

More Customers…More Often…Buying More…

Lessons from the last recession.

In a time of retail declines, the above line should be your mantra.  It is well worth noting:

A study conducted by McGraw-Hill Research found that 
companies who maintained (or increased) their marketing throughout the 1981-82 recession saw an average sales growth of 275 percent over the next five years!

But those companies who cut their marketing saw paltry sales growth of 19 percent over the next five years.

Today let’s talk about the first of the aforementioned three mantras, once again, drill this into your head and into your team:

More Customers…More Often…Buying More…

So let’s take More Customers, and in the following two entries, I will talk about More Often, and then Buying More.

Day One: More Customers

More Customers will come from 3 key areas

1. Existing Customers

2. New Customers and Conquest of Competitor Customers

3. Conversion of Non Buying Store Traffic (Browsers)

A Magnet - What is it that attracts more customers through your doors?  Promotions, Advertising, Sales and discounts, Value and Excitement.

So, you need to build or enhance the “Magnet” that brings people to your stores and your brand.

Your magnet will need to be extremely targeted, it will need intelligence, imbedded within it, so that you can earn critical selling knowledge from all your new traffic, and you will need to be able to establish a “hook” a relationship that will let your effectively reach out to your new customers and market, in order to use your newly minted knowledge and relationship to bring these people back and sell them more in the future.

Today, there are better ways to harness the internet to generate excitement and Draw.  Retailers on the winning edge are using a new layered strategy to attract, engage and sell more.

A smart retailer will engage a strategically planned and well executed strategy to use intelligent contesting, linked to knowledge generating feedback and engagement tools, linked to rewards incentives and offers.

The result is a much wider exposure to the entire POTENTIAL  Market.  If this is executed effectively, you have:

An amazing, low cost MAGNET that sucks in large numbers of all the groups that could buy from you, and then you move to the:

COMPASS

Once you have attracted this huge new audience, you engage them with knowledge generating feedback and engagement tools, that forms the compass and the magnet that lets you craft the best offers, promotions, values and deals that will motivate purchase action at the most profitable level for each relevant group.

MAP

Once you have the audience and the knowledge and the relationship, you can create a map, that lets you figure out the best way to, clear inventory, fast, because you DO NOT WANT INVENTORY LEFT THIS YEAR.  Keep in mind that weak retailers will be saturating the market through this season and into the coming year.  Next you will want your map to help make sure that you will dominate your market.  THERE WILL BE LESS AND LESS ROOM FOR ALSO RANS.

Yes, there is great danger and risk ahead, but there is also incredible opportunity for those who see the opportunity and run with the right plan.

That is the intro to MORE CUSTOMERS.  NEXT, I WILL COVER MORE OFTEN.

Increase retail sales now, clear inventory fast, and get ready to Sell for 2009.

YOU WILL EITHER BE RETAIL ROAD KILL OR YOU WILL BE A SURVIVOR

Read the following article and then let’s figure out how to be one of the Survivors.

The dead mall problem

Experts say Atlanta, Las Vegas, and retail hubs in California and Florida are at real economic risk if thousands of more stores shutter in 2009.

NEW YORK (CNNMoney.com) — As the recession leaves more retail casualties in its wake, rising store bankruptcies and mall closures could have devastating economic consequences.

As more stores exit malls, vacancies in regional malls could rise past 7% by year-end, a level not hit since the first quarter of 2001, according to real estate research firm Reis.

Major cities across America will be affected, said David Bribery, Chairman and co-CEO of Atlanta-based The Shopping Center Group, a retail real estate services firm.

Both Birnbrey and Susan Wachter, professor with University of Pennsylvania’s Wharton Real Estate Department, warn the social and economic impact of empty stores can be devastating.

“One of the biggest consequences [of store and mall closings] is the loss of a sense of community,” Birnbrey said. “I am a big believer that malls are an essential part of Americana. A mall is a place where people gather and socialize.”

In addition, many municipalities are heavily dependent on retailers for the tax revenue and jobs that they generate.

For example, Montgomery County, Pa., gets as much as 50% of its tax revenue from the local King of Prussia mall, said Wachter.

The impact will be felt on local police service, schools and roads, said Birnbrey.

The village of North Randall in Cuyahoga County, Ohio, is on the verge of extinction after a challenging economic and competitive climate has crippled business at the Randall Park Mall.

The shopping center, once the largest enclosed mall in the greater Cleveland area, is closing after 32 years. [Read story]

The pain could be far reaching. “The Midwest, California, Florida, Atlanta and Arizona are very vulnerable to a retail recession,” said Wachter.

Forecasts look bleak

The International Council of Shopping Centers (ICSC), in its most recent forecast, expects that 6,100 chain stores will shutter this year, the highest level since 2004 “as the U.S. recession continues to take its toll on the retail sector and its job market.”

In 2009, the ICSC estimates that store closings could exceed 3,100 in just the first half of the year. However, the number of potential closings rises exponentially when the firm takes into account both public and private sector businesses.

The ICSC projects that about 148,000 retail establishments – both public and private – will go out of business this year and another 73,000 stores will close in the first half of 2009.

The ICSC projects that about 625,000 retail jobs will be eliminated this year “with little change in the pace for early 2009.”

Fewer retailers means less competition and fewer places to shop. “Right now everyone is euphoric over the big sales,” Birnbrey said. “Once the holiday season is over then we could get this monopolistic situation where the [retail] survivors realize that they don’t need to be as competitive on prices.”

Is America too ‘overstored’?

But not everyone sees a dead mall as a negative development.

“Our country has six times more retail space per capita than any other county,” said Ellen Dunham-Jones, director of the architecture program at Georgia Institute of Technology.

“We’re just cannibalizing our existing stores by building more stores even when sales aren’t increasing,” she said. “We were long due for a retail correction and we’re going through it now.”

Dunham-Jones said big-box enclosed malls have become a dying breed as more shoppers prefer going to shop at strip malls or “lifestyle” open-air malls.

“The good news is that this isn’t the first time we’ll see dead malls,” she said. In an upcoming book, “Retrofitting Suburbia,” co-authored by Dunham Jones, she’s included case studies of more than 100 places across North America that have turned dead malls or big-box stores into thriving community centers.

What’s needed, she said, is for the public and private sector to be opportunistic and develop the 100 acres of prime mall space for mixed community use like schools, libraries and new housing.

John Norquist, a former mayor of Milwaukee who now lectures on urban planning, agreed with Dunham-Jones.

“There’s no disgrace in a dead mall,” Norquist said. “In Milwaukee, we had one department store, Boston Store, in the downtown area. When that went away and the rest of retailing went into the suburbs, we focused in developing the empty space into housing and I gave fast permits.”

Norquist rationalized that more housing would eventually attract more retailing. “Milwaukee opened up for [retail] business in 2001 and it’s continued to grow,” he said.

But Wharton’s Wachter remained unconvinced. She said any talk of redevelopment in this environment is “unrealistic.”

“Everything that has been suggested needs funding. There’s no money for these adaptive reuses [of retail space] for communities,” she said.

Blirnbrey’s criticism was somewhat harsher. “It’s human nature to put a positive light on a bad situation,” he said. “It’s just a case of hope springs eternal.” 

So, time to think creatively, changes on the scale we will See in 2008-2009 represent danger, risk and opportunity.

 

What are the winners in retail doing and planning?

 

Job ONE – CLEAR INVENTORY

 

Smart retailers are looking at creative ways to attract more business FAST, and get the 2008 inventory out the door NOW, the retailers that succeed are using a variety of special offers, offers that drive larger purchase and some interesting creative “gifting strategies” that operate on two levels;

 

SMART - Increase attraction and traffic for immediate, larger purchase.

 

SMARTER - Develop a “sticky” relationship, linked to in-depth knowledge of all traffic, in order to extend attraction for purchases in the 2009 upcoming season.

 

(I have recently helped develop a number of creative strategies, that operate on multiple levels  to achieve these goals)

 

JOB TWO – GET READY FOR 2009 – FOR THOSE LEFT STANDING

 

If you listen to the above suggestions, and you are still standing, you will be able to leverage the large scale relationships and knowledge of large groups of new traffic and customers, added to your existing customer base to reach out INTELLIGENTLY to sell more and more effectively as 2009 gets rolling.

The competition will be FIERCE and you will  need to have a head start.

You will need to be smarter in reaching and understanding your market, mark my words, the market is changing fast, stop wasting money on poorly targeted marketing, that wastes encredible sums of money for questionable results that are short on accountability. 

Bottom Line: YOU DON’T HAVE MONEY OR TIME TO WASTE

Survival will be a product of fast, knowledge based, targeted actions that do the job economically.

 

I am seeing the results of this in the marketplace, the changes are breathtaking and very profitable for Retailers that seize the opportunity.  Think Walmart, but you can gain the advantage and profit for a fraction of the cost with the newest tools available.

Get on it NOW, time is wasting.