Most retailers I talk to have their calendars blocked for a trip to New York City every January to attend the National Retail Federation’s “Big Show”. January 2012 will mark the 101st annual Convention and Expo. This has truly become an international gathering of retail decision-makers with over 82 countries represented and 22,000 attendees overall in 2011. Did you know that last January’s Big Show brought the largest number of non-US attendees from Brazil, Canada, France, UK, and Mexico. The global nature of retail, despite local business variations, is indeed a characteristic of this 21st century. Additionally, the Big Show continues to be the event for retail decision-makers where nine out of ten retail attendees make or influence key decisions in their organizations. So, clearly New York in January is where retailers come together to peek into the future trends not only in merchandising and technology, but also trends on consumer behavior, economy, regulatory, and innovative thought leadership from the retail industry, business, technology, and politics. The Big Show is an event for retailers to establish new connections, share and explore new ideas, explore and validate plans for 2012 and beyond, and get a real measure of the local and global impact that retail has in the lives of their customers.
Whenever we talk about retailers and the health of their business, we inevitably come back to their customer: the “consumer.” That very special entity that retailers track, analyze, study, predict, and otherwise court in order to gain a higher and higher share of their wallets has been hit hard by economic woes since 2008, YET the consumer has demonstrated a resiliency that defies logic (consider the continuing housing mortgage crisis and high historical unemployment in the U.S.).
Which brings me to the emotional side of retail (realm of the right brain). Today’s consumers get their confidence measured every month and seem to have a “shorter” memory – they have an optimism about the future, have blurred the divide between work and social, have embraced personal technology into their lives, and are increasingly demanding ease-of-use and immediacy whenever and wherever they choose to shop and socialize. They are also clear on what they perceive to be a ‘good deal’ on a basic item, seek special deals on luxury items (think Amazon’s MyHabit), and in the U.S. have a megahuge appetite for deals on Black Friday and Cyber Monday. Consumer confidence (as a measure) is a key indicator in the amount of optimism a shopper feels and a gauge of their likely spending. Although there has been some hiccups on that measure lately in France and the United Kingdom, we see strength in Germany and the United States and a general positive trend in Mexico. While consumer confidence plays a critical role in the health of the U.S. economy where personal consumption is approximately 70% of GDP, it also plays an important role in the UK where personal consumption in 2008 stood at 64%, and slightly reduced significance in Japan (58%) and in Germany (56%); these are in contrast to nascent consumer spending in China (36%), also from 2008 (see source here).
In the United States, this season’s Black Friday weekend marked record sales of $52.4 billion with record 226 million shoppers (86.3 million of them on Black Friday alone) visited stores and websites. Most popular shopper destinations were department stores (48.7%), discounters (37.5%), and electronics stores (30.8%). And gift cards continue to be an option around the holidays as nearly 1 in 4 shoppers included a gift card at checkout. Cyber Monday also proved a big hit this year. Online traffic increased 43% over 2010 and online sales were up 18% through Monday night (11/28). These records – from volume to sales – are giving retailers a needed momentum going into the final weeks of the holiday season; we might even be able to beat NRF’s earlier prediction of a 2.8 percent increase in holiday sales over 2010. The performance and buyer behavior over Black Friday and Cyber Monday may also give reasons for retailers to dig deeper in developing their m-commerce strategies (see RSR’s latest research on the rise of the mobile consumer).
In closing, consumers are spending when offered compelling deals, are using mobile devices to locate products, research reviews, and compare pricing; they’re using social networks to share experiences (good and bad), are becoming ‘smarter’ shoppers (whether at the store or online), and are expecting greater levels of personalization and value. These trends are putting pressure on retailers to deliver and keep up with the fast-pace of technologies that have permeated consumers’ lifestyles. Retail has also become global whether from the side of retailers going international or from international events having impact on consumers in local markets (think of crude oil prices). The Big Show, under one roof, will bring together the leaders of an industry - whose customers move entire economies - with technology partners, thought leaders, and a powerful keynote by President Bill Clinton ”Embracing our Common Humanity.” Make sure to stop by the SAP Retail and Store Operations booths to get the latest on “Retail Without Boundaries” with timely demos and discussions with solution and process experts covering mobility, BI and HANA, promotions, CRM, core merchandising, POS, and forecasting and supply chain. Hope you’ll be attending the 101st Big ‘Global’ Show in NYC and getting some ideas for growing your business in 2012 and beyond!
Taking into consideration the upbeat Black Friday Weekend sales and November’s retail sales year over year increase of 4.5% , the NRF has boosted its holiday sales estimates from 2.8% to 3.8% to a record $ 469.1 billion.