Turning the Corner
Many analysts learned an important lesson during the 2010 holiday season: Never underestimate the consumer at Christmastime. While all receipts have yet to be tallied, it looks like holiday sales rose a quite-respectable 5.7 percent — the largest holiday sales gain since 2004, and the latest sign that the worst is finally behind us.
The enthusiasm we saw from retailers during the fourth quarter was echoed during NRF’s 100th Annual Convention & EXPO in New York City. With more than 20,000 people in attendance, there was a feeling of optimism echoing in the halls of our education sessions, and traffic on the show floor was reminiscent of Black Friday in many of our members’ stores.
The record-setting crowd heard from many of our industry’s leaders and visionaries, whose messages were consistent: While the outlook for 2011 is bullish, we are not blind to the obstacles that threaten to interfere with the recovery. The unemployment rate remains stubbornly high, and rising gas prices threaten to diminish disposable income. And just as retailers have gotten a handle on operating expenditures, growing concerns of inflation could force merchants to pass rising costs on to price-sensitive customers.
While the short-term economic concerns are real, they have not stopped retailers from taking a longer view. Retailers are again making significant investments in innovative solutions to help grow their businesses. We are seeing more investment in item-level RFID technology, with pilot programs that are reporting encouraging results. Item-level tagging is making it easier for associates to locate merchandise for customers and improve inventory accuracy, increasing efficiency in the supply chain.
Retailers are also investing more in mobile and social media solutions to create an even stronger multichannel presence. From couponing to cutting-edge apps, retailers see mobile commerce as a sales driver that will allow them to connect with their customers in meaningful ways while providing a unique shopping experience that consumers control from the palm of their hands.
These encouraging developments are a sign that the worst of the economic crisis is finally behind us. More importantly, it signals that the retail industry is learning not only how to survive, but how to thrive in the current economy. The investments we see today in innovation will continue to pay major dividends as the economy slowly improves. While the analysts are focusing their attention on what happens on Wall Street and Main Street, we at NRF will have our eyes on Capitol Hill, where major debates will shape key issues like job creation, deficit reduction and tax reform.
NRF will have a seat at the table for these debates to make sure Congress understands the critical role the retail industry plays in job creation across the economy. We believe the recovery is real and sustainable, but it needs to be protected. To do that, we must make sure Congress adopts policies that will encourage investment, consumption and job creation.