Are We Beginning the Next Golden Age of Retail?

No one will remember the first decade of the 21st century as retail’s finest. The first five years saw most retailers running scared from Channel Master Walmart, scrapping for gross margin improvements through reverse auctions and bidding events, and reducing in-store customer service to levels so poor as to defy description. The second half of the decade was notable for at least three things: 1) customers’ demand for better service, 2) the meteoric rise of blogs, social networks and other forms of user-generated or interactive content, and 3) the great recession, with plummeting stock and housing prices dissolving discretionary spending and thinning the over-large retail herd.

We sit today, in the second half of the first year of the 21st century’s second decade, and I’m wondering if we aren’t on the cusp of a new golden age. It seems as though retailers are starting to pick up the customer’s cadence, and picking and choosing the best from retailing’s finest hours. As examples:
Retailers Meeting Consumers on Their Turf: For many it has been a grudging journey, while others have embraced it wholeheartedly, but most retailers have established beachheads on social networks, created mobile web sites and apps, and solicited reviews and feedback from their customers. It hasn’t been an elegant process for many but they’ve made it onto the board, and consumers seem to reward their efforts. We live in an omni-channel world now, where today’s one-way communication device can become tomorrow’s new selling medium. Use-cases like JC Penney, Wet Seal, Petco and others tell us meeting consumers on their turf can drive incremental revenue into retailer’s virtual cash registers.
The power of social media is really undeniable. As a small sample of one, we at RSR have been running a Facebook ad for our research fan page over the past two weeks. To date, we have garnered close to 2,000,000 impressions and increased our “fan” base by 40%. For this reach and these results, we’ve paid a hefty $150.58. Our criteria include anyone over 25 years old with a college degree, in fifteen different countries. Social media works.
The Return of the Iconic Brand: We can identify a few retailers who were early 21st century brand champions. Nordstrom, continuing its legendary customer service, but with technology-enabled underpinnings, Apple, which rose from fifty small stores to a multi-billion dollar business over the course of the decade, Costco and Target, who both made cheap stuff chic, and a few supermarkets like Publix, who held their ground against Walmart’s encroachment without giving in to the allure of pretending to be the lowest cost provider.
Most recently I have been fascinated by Macy’s best exclusive label offering yet – the Material Girl line. Say what you will about Madonna (full disclosure: while my partners have very little good to say about her, I am that person who bought a pair of $600 concert tickets as one of my last pre-recession acts of excess), the woman sure knows how to build a brand. There are few pre-teens who even KNOW Madonna has a daughter (Lourdes, or Lola, as she is commonly called), but their moms probably wore a lot of those wanna-be fashions in the 80’s and will happily take their daughters shopping to buy these cool clothes. The “face” of the brand, Taylor Momsen of “Gossip Girl” insures that the teen demographic will be drawn into the offering. We’re watching Madonna passing the face-of-the-brand torch to the next generation. And Macy’s representatives report “…it has been flying off shelves since the launch.”
On the flip side, us older, wider folks were happy to learn that Saks has worked with name designers like Fendi, Dolce and Gabbana and Yves Saint Laurent to create an “upscale line of plus sized fashions.” Frankly, I’ve never understood why product designers believe the overweight really love appliqués splattered across our blouses, and that those blouses should be made out of skin hugging knit fabrics. (Maybe if they’d created more tasteful lines earlier, I couldn’t have afforded those $600 Madonna tickets, but I digress).
Retailers Catering to Consumers’ Need to “Be Part of Something Bigger than Themselves:” In her article, “Re-imagining Retail” in this month’s issue of Stores Magazine, Diana McHenry of SAS argues customers notice and appreciate initiatives like Pepsi eschewing Superbowl ads in exchange for fostering local service grants, and other retailers supporting initiatives like RetailROI, the Retail Orphan Initiative spearheaded by IHL’s Greg Buzek and the late Paul Singer. We seem to have moved just a little bit past the “all me, all the time” decade into the “Man, things can get tough out there, let’s help each other out” era. It’s an era of community. Or so we hope.
When you put these pieces together, catering to consumers, a return of fashion and reinforcing a sense of shared community you start to see a larger picture. This picture takes us beyond a sea of sameness, poor service and lackluster, disconnected experiences to a world of relevancy and interest. If we can make good on THAT brand promise, we’ll find ourselves in the next Golden Era of Retail… one where supply chain, sourcing, marketing and technology combine to support retail’s integral place in the twenty-first century global community.

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