Retailing in the USA: an interpretation of current trends

Abstract

A good summary of the current state of retailing in the USA was made recently by the CEO of one of the nation's largest retailers when he told a friend that he longed for the "good old days" when he was a merchant building a franchise with the consumer. Today, instead of making merchandise decisions, he spends almost his whole day answering questions from Wall Street analysts and mutual fund managers who are interested in daily sales figures against plan and current quarter profit projections. The thinking goes something like this: "We will not let anything keep us from achieving our goal of meeting or exceeding quarterly profit projections". This constant need to reassure his financial audiences keeps him from visiting customers and vendors. Such behaviour could contribute to making the kind of mistakes above which the novelist John le Carré warned about when he wrote: "A desk is a dangerous place from which to view the world".What was particularly disturbing to the CEO mentioned above was the limited experience of so many analysts and fund managers. This inexperience is also found in retailing -today's retailers are focusing on their "narrow areas of expertise". This is resulting in a failure to commit sufficient resources to monitoring how changes in the demographic, technological, political and economic environments had and would continue to affect their business. Amazingly, this correct observation was from a CEO in his mid-40s.The failure to understand retailing's history destines managers to misinterpret current trends which are changing the retailing environment. George Santayana warned us about this when he wrote: "Those who cannot remember the past are condemned to repeat it". No longer can retailers continue to do the same thing they have always done in the mistaken belief that "what worked in the past will work in the future". This short-sightedness is compounded by the excessive number of retailers offering product assortments, promotions, pricing and visual presentations that are indistinguishable from store to store or region to region.Given that the business environment is changing at a geometric rate, successful retailers need to spot changing trends and develop new strategies that, instead of being forced to react to change after it has already occurred, proactively shape the environment. This 275

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