The message to the more than 12,500 retailers attending the National Retail Federation’s annual convention: Focus on innovation, customer service and convenience if you want to succeed.
Lauderdale Lakes-based Sports Authority was hailed Monday as one of the retailers at the forefront of creativity. Over the last several years, the company has been reinventing itself and its stores, making them easier to shop by arranging related merchandise in close proximity such as tennis racquets, clothes and sneakers.
Some of the latest tests include a specialty golf store within the Sawgrass Mills location, full-service footwear departments, and small format stores in Ocala and Panama City.
“Innovation isnt always just about product,” said Marty Hanaka, chairman and chief executive. “With a smaller format we can really leverage the infrastructure we have in place and the markets where people know our brand.”
The need for innovation is critical when forecasters are predicting another year of relatively modest retail sales increases.
“Consumers will remain cautious in their spending, seeking out the best deal for their money,” said Rosalind Wells, chief economist for the National Retail Federation. “Value and convenience will remain important. The challenge for retailers will be to find those must-have items that consumers will not be able to resist.”
A number of retailers posted solid sales growth last year by offering unique products or filling a niche in the marketplace. Analysts point to Sharper Image, Brookstone, Chico’s, Gymboree and Kohl’s as industry leaders that have figured out how to reach the consumer.
“The customer wants service and wants to be cared about,” said Gilbert Harrison, chairman of Financo, a mergers and acquisitions firm. “Too many retailers in order to meet the bottom-line push arent doing that. The ones who understand the need to reinvent themselves are going to be the big winners.”
The National Retail Federation expects 2003 retail sales will increase an estimated 5.6 percent driven largely by gains in consumer income and low interest rates. Much of that growth is expected to come in the second half of the year, although that could be complicated by world events like the impending war with Iraq, lingering threats of terrorism and the oil strike in Venezuela.
But others say that forecast may be too optimistic, and predict total retail sales gains between 3 and 4 percent.
“Consumers are worried about seeing pink slips on their desk,” said Kurt Barnard, president of Barnard’s Retail Consulting Group. “That’s hardly the economic background that makes for buying binges and spending sprees.”
