Retail 2010: The Year in Review

A year ago, when we were thinking about retail in 2010, we looked for glimmers of uptick, worried that some businesses might not make it, and girded our loins for more of the same.

Well, 2010 wasn’t as bad as we thought and in some sectors it was pretty good. As a matter of fact, the numbers coming in −both in sales and consumer confidence− seem promising, with the expected amount of post-recession caution. November was one of the best months for retailers and December is looking very good. It’s likely the result of pent up demand −the desire to shop without a gray cloud over our heads− combined with retailers/brands aligning their inventory and deals with consumer attitudes.

The last year has taught retailers big and small more about how and why we shop than ever before. Paying attention to how consumers −all of us− react to adversity, what drives our purchase decisions, and our rational and emotional needs has been as important as new products and services.

We saw consolidation and retreat (Borders Books made a bid for Barnes & Noble and Google tried to buy Groupon), tighter stock levels, as well as new, exciting takes on tried and true incentives like coupons, loyalty points, and limited-time-only offers that bring to mind Kmart’s classic Blue Light Special.

All in all, we consumers have more control than ever before. We are more thoughtful about everyday purchases. We have new considerations to go along with the old: local and “green” are as important to us as selection and value. We have tools in our hands, literally, that give us information and incentives when we want and need them.

It’s the Experience, Stupid

We still love events like Independent’s Day and Gallery Hop, hanging out, dining, and maybe buying a thing or two.  This year, we’ve really embraced mobile and/or event-based retail options, like food carts and pop-up stores. Foodie Cart Locator, Ray Ray’s Hog Pit, and MoJo Tago go where the action is and oftentimes make the action. We saw the first sparks of innovative experiences, like the one offered at Wonderland Columbus’s Food Cart Food Court.  It reflects a national trend not only in food carts, but bringing products and services where people are and want to be. Check out the Marc by Marc Jacobs jewelry truck that went to the people for Fashion’s Night Out 2010.

The New Blue Light Special

This year, we’ve seen the advent and experimental use of new mobile services, like Groupon and Facebook’s Places and Deals. Goupon offers 50 percent off deals from retailers of all sizes for a limited time to a limited number of people. This creates a strong sense of urgency and guarantees a win for retailer and customer alike.

Location-based services that meld check-in games, like Foursquare or Gowalla, with deals allow customers to determine whether there are good deals nearby or at the store they are already in.

Facebook’s version, which incorporates its Places check-in service with an open incentive platform called Deals, is poised for growth. The sheer volume and scale of Facebook is an advantage, but the consumer behavior that already exists will be crucial to helping it thrive. Those most likely to utilize Places and Deals are regular and loyal Facebook users.

The 2010 holiday shopping season is the first real testing ground for such services and the results will shape how retailers alter their use in the short term.

The Engagement Stream

While you are hunting for deals on Facebook, you’ll get both direct and indirect valuable offers and information from all the brands you’ve “liked” there.  The email newsletters in your inbox provide exclusive offers and information you have opted to receive.

Facebook and email remain two of the most important channels for receiving information, and small and large retailers use those tools to stay in touch.  We see things in a continual stream that we can edit and control. We can pick and delete the messages we want and begin to understand how that information influences our purchase decisions.

Many of us willingly conduct constant conversations with the products and services, retailers, and restaurants we like. Here in Columbus, Dirty Franks Hot Dog Palace, Surly Girl Saloon, and The Wexner Center do a great job of using Facebook and Twitter to keep the conversation going, give us valuable information, and keep us coming back.

Creative Alliances

In 2010, we saw innovative companies mashing up their offerings to create unique, new products. West Elm −the modern furniture arm of Williams-Sonoma− partnered with Pratt Institute −the renowned design school− to create a line of furniture designed by students and distributed through West Elm stores, catalogs, and websites. Locally, the tastiest partnership –between Jeni’s Splendid Ice Creams and Middle West Spirits− birthed a new ice cream flavor: Oakvale Young Gouda with OYO Vodka-Plumped Cranberries.

The View

This year, like any year, consumers wanted what they have always wanted: engaging experiences, good prices, and interesting products and services. We’ve started to buy again, but this time around we are taking a moment to consider− and that moment is when retailers and consumers really get to know each other.

In the coming year, we’ll regularly use our friends’ thoughts and opinions as we make decisions to buy. Local retailers will become more important as big retailers work harder to “localize” their stores and assortments. Look for fun to return to store shelves and dining tables as the gray clouds dissipate.