Toughest times requires understanding of consumer psychology
There has not been a more difficult period for retailers to ply their trade for many decades and in order to survive and thrive they must adapt to the new consumeer mindset and embrace emerging technologies.
By Glynn Davis in Barcelona
Speaking at the World Retail Congress in Barcelona today Marvin Traub, president of Marvin Traub Associates and former president and chief executive of Bloomingdales, stated: “In my 60 years in retail I’ve never seen such daunting challenges as those faced today. This is a period for brands and retailers when the issue is survival.”
But despite this backdrop Traub suggests that great retailers respond well to change and that they will “not shy away from innovation and uniqueness”. This view is based on his 40-plus years at Bloomingdales where he became a legend for initiating change and keeping the department store business consistently at the head of the field through his pioneering initiatives.
He told Congress delegates that on joining the business in 1950 it was a low-end bargain-basement New York City store with no reputation for fashion and when he left 40 years later it was world class having taken a “new approach to shopping with entertainment and unique stores” a crucial compoment. He also sought out up-and-coming designers such as Ralph Lauren, Calvin Klein and Fendi.
“We developed not only unique products but a culture too. And because we did not have access to major designers in the sixties and seventies we sought out the new generation of designers. We tried to appeal to the new affluent consumers and became the first department store to go national,” he recalls.
Traub believes many of the fundamentals remain the same for today’s retailers and that to overcome the current tough market they have to first understand consumer psychology. “There is a fear for the future that may have turned off shoppers. It’s our challenge to understand and create a more positive atmosphere for consumers. What can we do to bring shoppers in and cater for their new priorities?” he asks.
He highlights some key trends that retailers must tap into if they are to meet the changing needs of shoppers. E-commerce is among the key areas that retailers can benefit from as sales continue to shift online: “It is critical that retailers develop e-commerce if they want to maximise traffic.” Traub also believes it is only a question of time before m-commerce takes off and that viral marketing and social media are further trends that retailers must adopt in order to better communicate their messages.
The issue of sustainability must also be taken onboard by retailers as consumers increasingly research the commitments of companies before they make purchases. Traub also believes there has been a “transformational shift as consumers think about why and how they spend” which means retailers must re-evaluate their price points – especially the luxury goods retailers whose prices he says have “sky-rocketed” too high. Retailers now also need compelling value propositions he argues.
