Economist Offers Multichannel Retailers Recession Insights, Post-Recession Action Plan
But looking ahead, aging boomers will downsize and spend less. “As we age, we find ourselves as empty nesters,” he said, “and large houses don’t make any sense anymore. So there’ll be a downsizing of housing resulting in fewer places to put things.”
Steidtmann alerted healthy retailers to take note of other key factors taking place right now:
- In the short term at least, multichannel marketers will have to compete with bankrupt retailers, such as Circuit City and Mervyns, which are selling out their goods at rock-bottom liquidation sales.
- “Everybody’s going to have to become a banker,” he said, because the challenges in the capital markets will drive that.
- Rethink inventory. “We’ll see much higher levels of inflation going forward,” Steidtmann said. “At some point, the economy will pick up, and there’ll be a need to drain those reserves out, which means higher inflation. So your attitude toward inventory will have to change.”
- Finally, he warned retailers that because there’s been little increase in retail employment over the past decade, although retail employees have been more productive, retailers have lost potential managers. Lower-level employees haven’t acquired the managerial skills necessary to move to the top of organizations.
“We lost a whole generation of people who could’ve gone into retail, but haven’t,” Steidtmann said. “And that’ll only continue with the rising unemployment rate.”