Brave New World

As editors of VM+SD, we are constantly asked to forecast the future, because you, our readers, are expected to supply this information to your clients. Forecasting retail is tricky work, especially this year. We now have a new form of communication — the Internet — and this new media will profoundly affect physical retailers, large and small. Or will it?

To find out what retailers are thinking about the Internet and other matters, I attended the National Retail Federation's 89th Annual Convention and Expo. The sold-out event was held January 16 -19 in New York City. The following weekend I was in Las Vegas for the Entertainment Retail Conference, finding out what design firms and retailers have to say about the Internet, retail and the importance of entertainment. A consensus is beginning to form:

• Multi-channel retailing is here. Ninety-seven percent of purchases are still made in stores. The Internet is just one more way to reach the customer, to satisfy informational and personalization needs.

• Time is more important than money. Different kinds of shoppers like to shop at different times of the day, and the Internet can provide this flexibility.

• The web is actually an information, communication and order-taking device. The customer will still come into the store for the experience and to pick up purchases ordered over the Internet, giving retailers the continued opportunity to inspire discretionary and impulse purchases.

• Strategic partnerships will become increasingly important between bricks-and-mortar stores and e-tailers. The stock market will throw less venture capital at the Internet and demand accountability — and profits.

• Integrated marketing will become more important than ever. Brand, physical store, web site, advertising, merchandise and in-store graphics — down to the smallest details — all need to deliver the same message. The consumer sees the retail brand as a whole, not in parts. “The net is just one touch point in your brand's cohesive presentation,” notes Sanford Stein, principal of Minneapolis-based SteinDesign and a presenter at the NRF convention.

While many retailers are fretting about the Internet, Paco Underhill, author of Why We Buy, reminded NRF attendees about the basics: just how and why human beings shop, the importance of thoughtful store layout and how to optimize in-store marketing opportunities. “Everybody is competing with everybody else for discretionary buying,” he observes.

As we head into the new Millennium, now is truly the best of times financially. Challenging, confusing, exhilarating (you choose the word) — but certainly not the worst of times. The Internet will affect retailing for better or worse, but from all indications, it will be for the better.

What do you think? Contact us at vmsd@stpubs.com with your thoughts.