By Jeffrey P. McNulty – author of The Ultimate Retail Manual
Originally published on Abasto.com and republished with permission.
The retail sector is going through a massive evolutionary change while slowly transitioning out of the pandemic. Our society is experiencing four interrelated economic challenges post-pandemic, e.g., lingering pandemic, record inflation (fuel, food, energy, disposable income, and housing), persistent supply chain issues, and waning consumer confidence.
The Consumer Price Index (CPI) for August came in at 8.3%, showing that financial headwinds remain as prices continue to soar across a broad array of goods and services. These inflationary metrics are kitchen-table issues forcing most consumers to refocus their lower-than-normal discretionary income on core staples.
Almost every major commerce category has experienced double-digit increases since early 2021. In addition, the Federal Reserve has agreed to keep raising interest rates to tame inflation. This strategy will definitely slow borrowing, lower consumer demand, and ratchet down hiring and wage growth.
Challenging times build resiliency and grit, producing a trebuchet of positive change. Every recession forces each business to reevaluate its brand positioning in the marketplace. This creates an incredible opportunity to double down on ensuring your business is laser-focused on establishing massive brand differentiation for your customers.
During any tumultuous environment, “Silver Linings” can always be capitalized upon. The pandemic was a “blessing in disguise” for the retail sector because it accelerated the timeline for retailers to invest heavily in their infrastructure, supply chain, fulfillment strategies, digital offerings, omnichannel, analytics, e-commerce, and front-line employees.
The retail sector is roaring back as most people have pent-up demand to visit brick-and-mortar stores.
We are social beings that innately crave human engagement, experience, and interaction. As inflation retreats in the 2nd or 3rd quarter of 2023, these retailers will start reaping the rewards for their concerted and strategic efforts.
Coresight Research reports 4,432 new store openings compared to 1,954 store closures equaling a net gain of more than 49 million square feet of new retail space. This is over a 2-1 ratio. Retailers like Home Depot, Lowe’s, Target, Walmart, BestBuy, Costco, Kroger, Wegmans, HEB, Tractor Supply, Total Wine & More, and Five Below are adapting to the NEW RETAIL ETHOS.
Retail is coming around full circle. Customers are yearning for a fully experiential multisensory experience that harkens back to a bygone era of what I call the four the four E’s: Engagement, Experience, Entertainment, and Execution.
I am highly optimistic about the future of the retail sector. There is a beacon of light at the end of the tunnel.
When NEW RETAIL ETHOS consults with clients around the world, we cover my proprietary C.A.P.E.D. strategy, which is a structured blueprint for achieving continued retail/business success: CUSTOMIZE, ADAPT, PERSONALIZE, ENGAGE, DIFFERENTIATE.
“Talent Acquisition & Talent Retention are the new business currency in 2022 and beyond.”
