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Source: Reuters -
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While there may be some tentative signs of recovery on world markets recently, the outlook for the retail sector still looks pretty bleak.
Unemployment is set to rise in coming months and consumer confidence seems likely to remain subdued.
So what approach should retailers be taking now that we are over a year into the recession?
Australian marketing guru Stephen Kulmar says retailers are having to think harder and longer about core consumer needs and balancing it with what will excite consumers.
He says price cutting for now has done its dash and "dropping our pants further" will not make the till ring.
"Pushing prices harder isn't actually going to stimulate the consumer back into the marketplace. What will stimulate them back into the marketplace is if there is something which they think is interesting, exciting and maybe a little bit different," he says.
Kulmar says this could done in the way stores are put together, or the way the store and product offering works.
In effect, building brands in bricks and mortar.
'It's my considered opinion that as a marketer the physical experience in store is becoming increasingly more and more important," he says.
Kulmar's insight is already being played out by some companies in New Zealand.
On Tuesday, Burger Fuel announced a rethink of its store design, with its upcoming store in Auckland set to be made out of sand in keeping with a Kiwi-inspired theme.
Similarly, Hell Pizza's founders were reported in The New Zealand Herald as saying that Tasman Pacific, who bought the franchise in 2006, had a hard time running the franchise by trying to meet the market with offering lower prices. With the franchise now back in the original founders' hands they plan to lift the quality and offer novelties like crocodile pizza.
Kulmar also believes consumerism has reached a tipping point and that overt consumption, such as buying labels and generally spending more than can be afforded, reached its peak around 18 months ago.
Environmental principles are also filtering through and influencing spending choices.
"We've had the likes of Al Gore...talk about sustainability, global warming and lots of other things and all those messages have been dripping down and filtering through our society and I believe that the recession is actually accelerating our thinking," he says.
He believes people the world over are rethinking past behaviour of overt consumption and are thinking much more consciously, with a particular focus on quality and perennial products.
