The World of Retailing for Today, Tomorrow

Retail industry leaders from companies all over the world converged at the UA's Global Retailing Conference to talk about the state of the industry and examples of how retailers are working in progressive ways.

Consider the buying habits of your parents and grandparents. They most likely purchased a particular product because of brand loyalty or familiarity with a company.

This is no longer the typical pattern of today's consumers in the United States, as several presenters noted during the first day of The University of Arizona's Global Retailing Conference. The world is much different now, and so is the typical consumer.

The UA's Terry J. Lundgren Center for Retailing is hosting the 14th annual conference, which brings together students, faculty, administrators, economists, technologists, authors, media representatives, retail industry leaders and others from around the globe.

The conference, which is being held at the Westin La Paloma Resort & Spa, will continue on Friday.

During the conference, industry leaders share information about new technology, consumerism, market innovations and other topics that require "laser-like thought," said Melinda Burke, who directs the UA center.

Several speakers said not only is the current recession affecting the retail industry in ways other recessions have not in the past, but the consumer is also morphing into a more knowledgeable and selective buyer. Also, technology is playing a more involved role in the world of retail.

That's why, more than ever, retailers must be more conscious about the customer and must also constantly analyze the competition, Burke said.

Terry J. Lundgren, the president and CEO of Macy's, Inc. said consumers have been a bit more reserved in their spending given the "tsunami of bad news."

People, he said, have either directly seen or felt the effects of the declining home values and stock market, last night's soaring gas prices, the shrinking availability of credit, the decline value of 401(k) plans and the loss of jobs.

As a result, many major retailers – Macy's, Kohl's, Target, Dillard's and Nordstrom being among them – saw overall declines in comparable store sales in 2008, Lundgren noted in his presentation.

"This was a very, very challenging year for retail," Lundgren, a UA alumnus, said to a standing-room-only audience Thursday morning. "I've been at this a bit and I haven't seen this movie before."

Because consumerism fuels about two-thirds of the U.S. economy, retailers must consider different approaches to do business, he said.

Lundgren was among those at the conference to promote the concept of "localization," noting that companies should no longer view consumers, regions or markets as homogenous. The idea behind localization, he explained, is that each region or market carries its own specific demand that retailers must tap.

Given the recent declines in retail, now is the time to take action, said John Karonis, president of Kurt Salmon Associates, a consulting firm for companies around the world.

When it comes to securing the industry, "ultimately, it's leadership that is going to be the catalyst," he said.

Retailers must push efforts that maintain brand recognition and align core values while figuring out creative ways to conserve cash without sacrificing service. Karonis also said some have begun to collaborate more closely with customers, such as involving them in designing products.

And in doing business, Frederic D. Fox said retailers also must consider an element that has often been ignored: the weather.

Fox is president, CEO and co-founder of Planalytics, a company that studies ways in which the weather affects the sale of products. He said retailers can no longer forego understanding the influence of rain, snow or blazing heat on their business.

"Weather is one of the greatest drivers of consumer behavior, and it is also one of the least understood," Fox said. "Until now, it's not something that has been measured very often."

Studying weather, Fox said, gets to some of the points Lundgren promoted. Retailers must consider the demographic makeup and rationality of their sales areas.

That's one example of ways retailers are being progressive and proactive. Robert Sinclair, Microsoft Corporation's accessibility director, offered another.

The Microsoft Tag is a new product his company is marketing to companies that can use it to reach potential customers.

The Tag, which contains an image that works much like a barcode, can be posted just about anywhere – in magazines, on sale signs, posters, business cards, Web sites and elsewhere.

When a cell phone user spots a Tag, whether it is in a storefront window after hours or on a banner in public transit, that user can take a photo of the Tag on their cell phone which then takes them directly to a Web site with more information about the product advertised on the Tag.

Technology, Sinclair said, is "reshaping our thought" and giving retailers new and interesting ways to interface with consumers.

"There are many different things that impact how people research and decide on a product," he said. "You can have a situation where a person is standing in one store and researching the price at another person's store. Because it's so much easier to find information, there is this multiplying effect."

The key for retailers, Sinclair said, is figuring out how to manage it.