The Power of Retail

Well, this is probably my last post for 2007 and it’s time to reflect on the year gone by. It’s certainly been an eventful year, with lots going on in our lives with our move to a new city and country as well as getting used to doing things differently here. While the year has been ‘eventful’, we’re hoping 2008 will be ‘better’, more stable and bring us good tidings. We didn’t get to travel quite a much in 2007 as we did in 2006, where I was on vacation for 72 days of the year. In 2007, my vacation time came to around 30 odd days, but due to the move, I was not able to work for another two months of the year. So, work wise it has been a slow year for me and I am hopping the new year will change that.

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Since this is the season of gift-giving, thought this cartoon from bLaugh would be just perfect! Giving the perfect gift is really not as easy as it looks as it involves understanding the person not just from your own perspective. Personal shoppers are great at this as they are able to understand what the person is looking for and what will suit him or her, without foisting too much of their own tastes on the shopper.

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The weakening of the dollar has led to an increase in foreign holiday shoppers coming to the the US. The real problem will occur when retailers start rebuilding their inventories of luxury and status oriented goods next year, with overseas manufacturers begin to pass on higher prices to the stores, which in turn will increase prices for shoppers next year. According to Peter Schiff, CEO of brokerage firm Euro Pacific Capital, “When tourists are coming they are not buying the stuff that we make. They are buying the stuff that we imported. U.S. retailers are getting a shot in the arm, but by next year, the discrepancy won’t be there.”

Prices of European clothes, handbags and shoes have already risen, with some luxury retailers increasing prices by as much as 20%. Increasingly, consumers are becoming wary of paying the higher prices for European designer clothes. Tiffany & Co.’s super third-quarter results were all due to foreign shoppers, with roughly half of its 25% sales increase due to international shoppers.

So, while right now US retailers are happy with the tide of foreign shoppers, next year is not going to look so good. New York is the number one destination for foreign visitors and retailers in the city such as Manolo Blahnik and FAO Schwarz are both opening stores on Sundays and even on Christmas Day to take in more foreign shoppers.

New York’s foreign visitors have increased by 3.5% this holiday season from last year according to the NYC & Company, which is the city’s official tourist and marketing organization. The city expects a total of 8 million visitors this year, an increase of 11% for the entire year. The important fact is that foreign shoppers are spending more, significantly more to around $1,750 per person from $1,400 two years ago.

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I spent some time this morning downloading and adding some plugins to my blog. I am amazed at how simple all this stuff has become now, where at one time it was only for the tech-savvy among us, now pretty much anyone can figure out how it’s done. I have added a Share This plugin at the bottom of my posts, making it all the more easier for readers to share the post via social bookmarking sites or your mail. I have also downloaded the related posts plugin as well as the popularity contest plugin, as a way to track my most popular posts. For more plugins, Alex King’s site is an invaluable resource. Here’s a link to his Wordpress Plugins page. Enjoy!

Edited to add: Well, I spoke too soon as I have been having problems getting the Related Posts plugin to start working. The link for the index table setup is not working and I haven’t figured out how to set it up manually. So, until then, no related posts will show up below my posts.

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As someone who is involved in the retail industry, I pride myself in knowing about all sorts of products that are available in the market, along with their assorted details such as price, location, brand and so on. So, when we suddenly needed an extra bed or mattress of some sort, I was suddenly at a loss, since all my knowledge was coming to nothing in this new city. I thought I would get a memory foam mattress that could double up for some other use as well, but had no idea what the approximate cost would be or where I could get it. I only had a couple of hours to get a mattress and so it was quite a mad rush, but I did manage to get it done with pretty decent results. Memory foam mattresses are in great demand these days, and one of the main reasons is that everyone is just so overstressed that one needs as much help as one can get with rest and relaxation.

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How much holiday shopping have you completed? If you’re like the average shopper, you’re still waiting for last minute deals to finish your shopping for Christmas. Most consumers shopped for all their must haves and major items at the start and are waiting for some special deals to close it. While sales were slightly higher on the Black Friday, sales started dropping off that very weekend. Online sales did very well on CyberMonday, but retailers are still hoping for a late rush to make up for lost sales, unfortunately everything from the weather and the economy seems to be plotting against them.

Nervous retailers have already started cutting prices. Wal-Mart Stores Inc. launched its third round of in-store secret specials in addition to what was advertised in its circulars, including $398 Gateway laptop computers. And Toys “R” Us threw open its doors at 7 a.m. Saturday, an hour earlier than a year ago, to offer special deals on toys until noon. Macy’s Inc. was offering savings up to 50 percent on items from clothing to jewelry.

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Are you an avid ad watcher? I love to track trends and fads through changing ads and ad watching in the holiday season is a good time to check out the best and the brightest of them. According to a new study conducted by BIGresearch, holidays ads of Target, Wal-Mart and Macy’s are customer favorites this year. The study was done for the Retail Advertising and Marketing Association and the executive director of RAMA, Make Gatti said that TV ads are no longer the only way retailers are getting customer’s attention.

Some ads are so great that shoppers decide to purchase an item based solely on an ad, but the percentage of these shoppers was still rather small at only 17.1%, for most shoppers (31.5%) they had already decided to shop at the merchant so the ad was not the sole incentive. With a tough holiday season this year, barely a 2% increase in retail sales, marketers are doing anything and everything this year to get shoppers to part with their money.

“It’s a difficult period because consumers are still overextended with credit, and gas and energy prices are still high,” said Britt Beemer, founder and chairman of America’s Research Group, Charleston, S.C. According to ARG, about three fourths of Americans have 75% or more of their Christmas shopping completed. But more shoppers than ever (53.4%) are waiting to get bigger discounts, up from 37.9% in 2006.

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I write a lot about consumer attitudes and outlooks, so this is something that I have noticed in the past few months. It seems that younger people are more willing to admit that they have made mistakes and sign in for a drug rehab program to get treatment. What at one time used to be something that was totally hidden and taboo, is now quite alright to discuss in the open. Part of the reason is that celebrities are making these same mistakes and since their lives are under total scrutiny of the media, their decision to go into rehab has trickled down to the average kid making the same decision as well. I do wonder how long this will last though.

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I came across a cool site that allows users to publish and share products that they find cool, innovative with others. Called iliketotallyloveit.com, it is a nice way to find creative gifts this holiday season. Each item that is on the site has a link to an online site where it can be purchased. Users can rate other’s items and the items with the maximum votes are displayed on the first page. There is an option to search for products within a certain price range as well as by type of product. Social media is the method to shop of the moment and by successfully integrating search engines and social media formats, retailers and manufacturers who usually do not come into the mainstream can get a lot of publicity. If you’d like to keep up with the latest, there is also a iliketotallyblogit blog site for all the details on new products and the company.

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It’s not just about who has the hottest clothes this season, but also about who has the hottest shopping bag! The designers at Saks Fifth Avenue wanted to create “a piece of modern art” and so hired a famous graphic artist to make their shopping bag. Bergdorf Goodman’s selection process took over nine months, and Lord & Taylor selected their bag from one of five prototypes and even went to Korea to check on its manufacture.

While this holiday season might not have the ‘it’ item to have as yet, shopping bags could be the reason for some consumers to decide where to shop. These bags are used for several months, so retailers are going all out in having a one-of-a-kind shopping bag. Consumers carrying store shopping bags are after all, walking advertisements for the store for several months for purposes as varied as carrying lunch to the office and laundry to the cleaners.

These shopping bags are a world apart from the thin plastic shopping bags, and come in an entire range of materials and handles. The heavier and sleeker the material, the better the bag. Once the territory of only the luxury brands, luxe shopping bags are now trickling down to mass market brands. The “reusability” of these shopping bags is what has created this change in the minds of marketers.

Chains are scrambling to move up the bag hierarchy. A year ago, employees at Lord & Taylor decided that their bags had become a liability. “It was the thinnest, most inexpensively constructed bag you could offer — a true throwaway bag,” said the chief executive, Jane Elfers.

So the retailer asked David Lipman, a marketing executive, to help design a new bag. Over six months, Mr. Lipman and his staff spared no expense. They eventually settled on a rich, white canvaslike paper — Mr. Lipman would disclose no further details — and thick, synthetic handles.

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