Dan Stanek addresses the crowd of industry executives.

Experts Forecast A Brave New World For Consumers

TNS Retail Forward Predicts Tough Times Ahead

CENTURY CITY, Calif. (Oct. 20, 2008)—At last week’s 2008 Strategic Outlook Conference held by TNS Retail Forward, analysts took the podium to deliver some tough news and helpful advice to the crowd of over 100 retail industry executives gathered for the all-day seminar. “We were going to host this event at the penthouse level, but we didn’t want anyone jumping out a window,” joked TNS Retail Forward executive VP Dan Stanek.
Lifting the mood in the room was no easy feat, as the economy is already creating challenges for retail. Senior VP Lois Huff noted that consumers have “angst overload” from rising fixed costs, stagnant incomes, significant wealth loss in their homes and 401(k)s and escalating job market fears. A recent study revealed 65 percent of consumers are buying only what they truly need, while 47 percent are postponing purchases and 54 percent are shopping less often.

The conference gave attendees a detailed look at retail in 2009 and beyond.

Huff said that the impact this will have on retail going forward is a slower pace of expansion and tighter inventory control. Though she said the economy will likely turn around in 2010, she added that tighter credit will keep spending down. She pointed out that consumers will increasingly look for greater value in their purchases, even after the economy turns around.

Stanek said that consumers will increasingly move toward “post-materialism,” with a focus on slowing down and simplifying their lifestyles. Green causes and purchases will continue to grow in importance, and brands that position themselves as budget-friendly or wise investments will thrive.

Speakers addressed when retailers can expect an economic upturn.

One bright spot for brands may be appealing to Hispanic shoppers, an increasingly important consumer segment. Executive VP Emil Morales noted that by 2020 the U.S. Hispanic teen population will grow 62 percent versus 10 percent for all teens. Even more promising, Hispanics are avid shoppers and are often brand loyal, preferring to shop at stores they trust and which offer the most convenience.

Another way for brands to reach consumers was discussed by senior VP Mary Brett Whitfield, who tackled the topic of multi-channel best practices. With today’s consumer becoming increasingly Web savvy, brands must be able to reach out to her on multiple platforms, from Twitter to video, catalogs and more user-friendly Web sites. As Web sites like Facebook and MySpace continue to grow in popularity, brands need to recognize the importance of creating a community of shoppers as well.

Speakers suggested brands target green and teens for economic growth.

Finally, senior VP James K. Marstiller addressed areas where brands can find new opportunities in the economic downturn, ranging from finding ways to personalize product to tapping into the current appetite for health and wellness products. Building new and unexpected alliances with other brands was also a path Marstiller strongly encouraged, while emphasizing that tomorrow’s more budget-conscious consumer will demand more value and greater connection to product and brands moving forward. Other avenues of growth included green product and a focus on the booming teen demographic. But most importantly, Marstiller urged the executives in the room to listen to their changing—and challenged—consumer.

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