Viewpoints

It's Time to Recalibrate for Post-Recession Period

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The evidence points to a gradually improving economic trend, but no one knows its depth or staying power. However, retailers need to position themselves now for better times while not abandoning value and cost-cutting strategies.

This issue of SN spotlights strategies retailers should consider pursuing in 2010. Many of these involve preparing for a post-recession environment.

I have picked out a few of these strategies and classified them into three r's: react, retain and reconnect. That may sound like a military battle slogan, but it's really a battle plan for the big R: Retailers. Here's how these three r's break down:

• React: Some of the most compelling strategies involve limited-time opportunities. These require quick action while the economy is still in transition. For example, companies looking to fill vacancies or shore up their talent have an unusually large array of choices given the high unemployment rate. That won't last indefinitely.

Likewise, hard times have pushed a lot of real estate onto the market. A large number of locations are available, at least for now, to those retailers with cash or borrowing power.

In other cases, opportunities have arisen from the actions of retailers themselves. The big-chain trend to reducing SKUs opens the door for smaller merchants to become destinations for eliminated items. This is especially true when those items are popular on a local level.

• Retain: Strategies to retain gains made during the recession will become more important. Supermarkets have benefited from directions such as more at-home meals and increased interest in private label, so they have an interest in holding onto those advances after the downturn.

In the case of private label, that means ensuring the appeal is about more than just price. Many retailers have already linked their private brands to a wider range of attributes. For those that haven't, it's time to give shoppers additional reasons to embrace store brands, such as quality, packaging and innovation.

• Reconnect: The recession pushed a lot of things off track, including retailer initiatives to build premium and health and wellness categories. Now is the time to begin revisiting these and other trends that may have been neglected.

The premium trend, while down, shows more staying power than expected because consumers consider it a way to replicate a fine dining experience at home. The health and wellness trend can be energized through in-store education, including the adoption of one of the nutritional labeling systems on the market.

It's not easy to shift gears by preparing for the recession's end. It involves doing proactive work while still playing block and tackle over the downturn not yet over. In the long run, however, focusing on react, retain and reconnect may lead to yet another “r” word: reward.

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Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Jon Springer

Jon Springer has been writing about food, food retailers and food retailing for more than 10 years, and is in his second tour of duty with Supermarket News. His prior experience includes covering the...
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