Retail sales will increase by 2.5% this year compared with 2009 due to positive signs in the housing and employment sectors, according to the National Retail Federation in its forecast released last week. Despite the upbeat outlook, multichannel retailers say they are approaching this year with guarded optimism.
“The NRF report, along with the report on the US GDP’s growth for the past quarter, is encouraging, but until I see with my own eyes stronger employment numbers, I won’t be totally convinced that it’s OK to be aggressive again,” said Frank Malsbenden, VP and GM of Vision Retailing Inc., parent company of e-commerce company Shoeline.com.
Jay Steinfeld, CEO of Blinds.com, another online merchant, said he looks forward to being more aggressive in light of the NRF forecast.
“We look at brand recognition searches, and noticed a pick-up since early January in searches of our own name and brand names we carry,” he said. “January is usually our slowest month, and if we’re at peak level now, it portends a good trend.”
Despite the shot in the arm last week’s reports supplied for some marketers, industry watchers stress the importance of continued innovation and experimentation this year. Holiday retail sales outpaced expectations, according to a post-holiday NRF report, but marketers will need to employ more of the same digitally focused tactics that worked over the holidays for continued success in 2010.
“More retailers will look to social media to streamline marketing opportunities,” explained Scott Krugman, spokesman for NRF. “It’s about streamlining operating costs and passing those savings to the consumer.”
Chris Paradysz, CEO of PM Digital, the digital arm of ParadyszMatera, agreed. Like Malsbenden, he believes the unemployment figure will continue to weigh down consumers’ discretionary income spending power, and also sees the 2.5% as the high end of possible sales growth, buoyed by innovative direct-to-consumer marketers, but possibly held back by traditional-channel retail sales.
“Stores that have retail experience will get some growth this year but those that aren’t experimental and innovative in the retail sector won’t grow as much,” he said. “Where we see innovation in product and categories we will see success.”
One media executive said an innovative strategy several marketers are using is the combination of DRTV and the Web.
“Clients are aggressively using opportunities in response television to drive consumers to the Web,” said Lynn Fantom, CEO of agency ID Media. “The connection between DRTV and the Web has never been stronger.”
This year has been called mobile’s year to shine. Chris Davey, SVP and head of global commerce practice at Sapient, explained that the technology to deliver coupons and localized ads to consumers exists, but installing point-of-sale technology such as scanners and kiosks presents a logistical obstacle to developing a mobile-integrated cross-channel effort.
Though positive economic indicators soften the sense of risk inherent in investing in emerging media, “a lot of companies would rather be a fast follower than a leader,” Davey said. “Most companies want to see risk taken by someone else and follow in the appropriate path.”