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Winning in an Uncertain Economy: Strategies for Retailers, Wholesaler-Distributors and Manufacturers
Targeting needs rather than wants, keeping a weather eye on economic forecasts, expanding where you least expect it and more advice for surviving a downturn
Scottsdale, AZ — June 25, 2008 — With compounding factors such as the weakness of the dollar, rising fuel costs and slow consumer spending adding even more complexity to effective business operations and supply chain planning processes, maintaining a profitable business in today's downward economy is becoming increasingly challenging.
During JDA Software's recent FOCUS 2008 Annual Global Conference, experts from industry leading retailers, wholesaler-distributors and manufacturers joined JDA Software's Wayne Usie, senior vice president for retail, and David Johnston, senior vice president for manufacturing and wholesale distribution, to outline real-world, industry-specific strategies companies can deploy to help navigate and thrive during these uncertain times. Several of these strategies are highlighted below:
Retailers — Tailor Assortments, Promotional Strategies and Store Layouts to Meet Shifting Consumer Preferences
The shift between "need" and "want" purchases is forcing retailers to more closely evaluate and adjust inventory assortments. With less disposable income, customer "needs" are quickly becoming "wants," causing a higher level of price and value scrutiny. For example, consumers who have previously purchased only organic grocery items, despite a higher price point, may be more inclined to scrutinize the value of organic products — potentially labeling them as luxury items rather than must-haves.
To leverage this trend, retailers should focus on becoming the store of choice for "need" items and merchandise their stores to appeal to consumers' "want" purchases. Utilizing end-cap displays and high-visibility locations for "need" items and keeping quick-moving products on the shelves at all times is crucial. The risk of losing a customer due to an out-of-stock product is high, especially as consumers shift their focus to more commoditized necessities. Additionally, retailers should assess their product assortments to ensure that they are in line with consumer needs. Planograms, shelf and floor plans also need to be examined to ensure that popular, sought-after products are in optimal locations.
A strong promotional strategy that both evaluates past campaigns and closely aligns future campaigns to specific customers through more direct marketing can be highly effective in creating loyalty and driving new business at a time when consumers are searching for reliability and savings. Retailers should take into account the "replacement purchase" mentality currently influencing customer purchases when running promotions and when determining inventory assortment and layout. For example, as money becomes tighter, families may opt to buy new patio furniture that can provide long-term enjoyment rather than spending money on a family vacation. So, it makes sense to not only advertise and run promotions on this furniture, but to place it in a highly visible location on the floor, and cluster items together on the shelves, making it easy for consumers to find and purchase complimentary goods.
During JDA Software's recent FOCUS 2008 Annual Global Conference, experts from industry leading retailers, wholesaler-distributors and manufacturers joined JDA Software's Wayne Usie, senior vice president for retail, and David Johnston, senior vice president for manufacturing and wholesale distribution, to outline real-world, industry-specific strategies companies can deploy to help navigate and thrive during these uncertain times. Several of these strategies are highlighted below:
Retailers — Tailor Assortments, Promotional Strategies and Store Layouts to Meet Shifting Consumer Preferences
The shift between "need" and "want" purchases is forcing retailers to more closely evaluate and adjust inventory assortments. With less disposable income, customer "needs" are quickly becoming "wants," causing a higher level of price and value scrutiny. For example, consumers who have previously purchased only organic grocery items, despite a higher price point, may be more inclined to scrutinize the value of organic products — potentially labeling them as luxury items rather than must-haves.
To leverage this trend, retailers should focus on becoming the store of choice for "need" items and merchandise their stores to appeal to consumers' "want" purchases. Utilizing end-cap displays and high-visibility locations for "need" items and keeping quick-moving products on the shelves at all times is crucial. The risk of losing a customer due to an out-of-stock product is high, especially as consumers shift their focus to more commoditized necessities. Additionally, retailers should assess their product assortments to ensure that they are in line with consumer needs. Planograms, shelf and floor plans also need to be examined to ensure that popular, sought-after products are in optimal locations.
A strong promotional strategy that both evaluates past campaigns and closely aligns future campaigns to specific customers through more direct marketing can be highly effective in creating loyalty and driving new business at a time when consumers are searching for reliability and savings. Retailers should take into account the "replacement purchase" mentality currently influencing customer purchases when running promotions and when determining inventory assortment and layout. For example, as money becomes tighter, families may opt to buy new patio furniture that can provide long-term enjoyment rather than spending money on a family vacation. So, it makes sense to not only advertise and run promotions on this furniture, but to place it in a highly visible location on the floor, and cluster items together on the shelves, making it easy for consumers to find and purchase complimentary goods.
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