In Vegas, diverse views of retail's future
Two educational sessions at the 2011 National Hardware Show showed very different views of what the consumer is looking for from their hardware retailers.
In “Advertising, Adapting to Today’s Consumer: Myths vs. Reality,” James Robisch did his best to debunk the belief that Facebook and Twitter have signed the death warrant for print media. A senior partner of The Farnsworth Group, a market research and consulting firm specializing in the home improvement industry, Robisch shared the results of a recent study of consumers who answered in-depth questions about what types of advertising motivates them to hand over their money.
One of the most surprising results was that 82% of those surveyed are still making purchasing decisions about home improvement projects based on what they see in newspaper inserts and circulars. Another 58% said they base most of their decisions on these flyers.
"Print may be declining, but it’s certainly not dead,” Robisch said.
When asked what they look for, overall, in ads, 87% of the respondents said “products on sale.” Another 74% said “sales or discounted prices." Coupons came in third at 51%. The nationwide survey showed that coupon use is “up significantly,” according to Robisch; couponing is especially popular with the under-30 age group.
“Boom, Box, Echo, the end of big-box retail as we know it” did not predict the implosion of every Home Depot, Lowe’s and Menards on the planet. Although Doug Stephens of Retail Prophet Consulting did say: “It’s conceivable Lowe’s and Home Depot could become nothing but educational centers [where] they sell us nothing but the Kool-Aid.”
Stephens was referring to the notion of big boxes shifting their focus more toward all-encompassing services, solutions and expertise than products: a path that Lowe’s has indeed begun to tread. But the self-described “retail industry futurist” is more concerned with the improbability, as he sees it, of finding a merchandise assortment that can satisfy the increasingly diverse demographics that home improvement stores now serve.
“Markets are diverse and hard to predict, which makes it difficult to buy containers full of goods from China,” he said.
Stephens also pointed to the 120 million sq. ft. of empty big-box space in the United States as evidence that a new retail model was needed; the obvious choice, he said, was one that didn’t require such a big footprint: namely, the Internet.
But there will always be a need for physical stores, and Stephens noted an “urban land grab” among retailers today. He warned, however, that these stores will be much smaller and more efficient. “It’s going to change the supply chain for everyone,” Stephens said.