Retail’s secret weapon
From the HGO Merchandiser
For those of us who retail home furnishings there’s no question it’s a tough business. With the increasing cost of land, labour and utilities the task is to stay competitive while turning a profit. The increasing viability of the internet as a way to reach consumers makes the challenge for brick and mortar stores an even greater.
There are a lot of changes – local, national and international – that will affect how business is conducted in the coming years. Understanding these changes and how they will impact retail is important as every local business is ultimately connected to the international marketplace. Canadian retailers need to search everywhere for creative solutions that will make them more competitive.
One solution is recognising the asset interior designers can become in broadening a retailer’s reach while enhancing customer value and brand differentiation. For many retailers this is not a partnership they have traditionally sought out. Many saw designers as competitors rather than as partners. But as the market shifts, so too must attitudes. Retailers and designers need to work together to embrace new, creative ways to address both the changing marketplace and evolving consumer spending habits.
It’s important to look at these changes are and where they came from. Although a retailer may be successful locally, the sheer workload of running a store – marketing, advertising, managing the business – leaves little time to explore the meaning of statistics provided by sources such as the federal government, universities, think tanks or researchers. Understanding this information can help a retailer implement new market strategies or test new ideas.
Understanding this picture can frame the future marketing your business. For instance, looking at current population trends can help the store owner learn more about the consumer. In 2017, Canada is still expected to have a negative birthrate. This means population growth depends on immigration. Canadians produce fewer children than required to support the current economy. European countries such as Germany and Britain share this issue. Both are dependent on immigration to fuel growth. In fact, there soon will be more people over the age of 65 living in Canada than under 65.
How does this translate into retail sales of furniture and home furnishings? The baby boomer generation (who are now young seniors) is most likely to spend both on themselves and younger family members. They are also likely to update their furnishings and residences often because they don’t want to feel “old”. This suggests their wealth will not only be inherited at a later date, at least some of it may be spent now. Downsizing was once the favoured buzz word for this group but it has since been changed to “rightsizing”. Surprisingly, some boomers move to larger residences as their dream home has lots of space for younger generations to visit.
At the opposite side of the spectrum are the millennials. Born between 1980 and 2000, this new and dominant generation is just finishing school, entering the work force and searching for their first home. It is estimated to be as big as the baby boom generation – if not bigger – which bodes well for growth in the “home” market.
Millennials are also the most educated generation in history, and regardless of where they live, share traits such as a love of technology, a desire for public transit and environmentally sustainable products as well as a need to do things differently. This generation wants to change the world.
What does their emergence mean to the retailer? Traditional methods of reaching consumers are unlikely to make a lasting impression on them as they have already experienced more than their parents did in areas from travel to design. Connecting with this new generation of shoppers depends on embracing unique ideas, unexplored avenues and a new diverse set of partners.
This is perhaps where designers fit into the new retail world. In the past, designers were perceived to be elitist and were often not seen as hardworking, detail oriented and loyal. But thanks to the growth of home and garden television programming on specialty channels such as HGTV as well as the emergence of web sites such as Houzz and Pinterest, design and designers have become part of the mainstream. Today, they work with all sorts of consumers, not just those with unlimited budgets. In fact, the entire design profession has had to re-invent itself to compete in a changing marketplace.