Economy/Innovation Dominate NRF Big Show

Hunker down, adopt a bunker mentality, hoard cash and control expenses…that was the advice for retailers at the National Retail Federation’s 98th annual convention and expo held back in January in New York.

At the show’s opening Super Session, “The Sky Has Fallen: Now What?”  J.C. Penney chief executive officer Myron Ullman 3rd told those in attendance, “I don’t see much positive growth in ’09. Sometime in 2010, we might start to see growth again.”  Ullman added that cutting capital expenditure, being more prudent with inventories and adopting shorter lead times will help retailers survive this difficult period.

Among the many concerns raised was the specter of inflation. “There will be massive inflation in three to five years,”  explained Peter J. Solomon, founder and chairman of the Peter J. Solomon Company. “The government can’t keep printing money at this rate.” Solomon added that attitudes toward spending will change as well, saying, “Over the last 25 years, the net worth of high income households increased. That’s not going to happen. Nest eggs aren’t going to be as big.”

Ullman noted that Americans’ loss of net worth has been $10 trillion since the economic downturn began. The nation’s housing stock has lost $30 trillion in value. “That has a big effect on the psyche.” Solomon agreed, calling the loss of jobs, foreclosures and bankruptcies “psychologically scarring.”



What will it take to get emotionally battered consumers back into stores? “Confidence,” said Mark Zandi, chief economist and co-founder of Moody’s Economy.com. “From a consumer’s point of view, a stimulus package that’s big enough and fast enough,” said Ullman.

But alas, the economy wasn’t the only hot topic at the show as new innovation with he in-store interactivity arena dotted the show floor. The show's Customer Experience Concept Store focused on new retail tech that  electronically engages consumers as they make their critical point-of-purchase decisions. Much of the technology was about personalization an allowing customers to, in a sense, “create their own” product. The general idea with the Concept Store booth was, “When you have a customer in the store shopping for a particular product treat that as a warm lead, not just a customer. Get them to stay for a while, engage them, and you’ll get them to come back.”