Display & Design Ideas - December 2008 - (Page 6)

6 news watch retail scene Consumers flock to thrift stores in weak economy Thrift stores, including Goodwill, have recently seen an uptick in sales. W 2008 Holiday forecast: flat at best ith the slew of store closings and bankruptcies that have inundated the retail landscape in the past few months, retailers are trying to stay optimistic about the holiday season and hope to stay in the black. But that’s not the case for the thrift store segment, which recently has seen record growth and expects that trend to continue. In today’s economy, consumers are embracing consignment shops, hitting up yard sales and putting on their bargain-hunting caps to score some second-hand goodies. During the first nine months of the year, Goodwill Industries International Inc. saw sales rise 7 percent, up from a 5.2 percent increase over the same period in 2007, according to the Associated Press. Additionally, The Salvation Army has seen sales increases, posting a 9 percent rise nationwide in the last 12-month period, which concluded at the end of September. The resale sector is thriving in the current economic slowdown. “People who previously gave away clothing, household goods and furniture are seeking other ways to dispose of unwanted items during an economic pinch,” says Adele Meyer, executive director of the National Association of Resale and Thrift Shops (NARTS). “Some donate merchandise to a Not For Profit thrift shop and take advantage of the tax deductions while helping a charity raise money. Others may choose to sell or consign merchandise at a local resale shop, turning their ‘no longer needed’ articles into cash.” According to a recent survey of NARTS members, 62.5 percent of respondents said sales increased in August 2008, compared to August 2007, with the average increase reported at approximately 30 percent. In comparing the time period of January through August 2008 to the same time period in 2007, 66.2 percent said sales increased, with an average increase of approximately 35 percent. The survey revealed that 85.8 percent of the stores experienced an increase in new customers, and 74.5 percent had an increase in new suppliers (consignors/sellers/donors). Goodwill, which operates more than 2,200 locations across the country, has also taken steps to breathe life into the customer experience in its stores. San Francisco-based McCall Design Group has partnered with Goodwill to design new retail stores for the organization, providing pro bono services. With a weak economy, consumers are counting their pennies, and stores offering the best value—for used goods or otherwise—will see the most success. —Jessie Bove, Managing Editor Photo: Courtesy of McCall Design Group A nalysts and retailers attending the Retail Marketing Society’s annual holiday forecast conference, held on Oct. 29 in New York, heard three forecast words that hadn’t been uttered in the past decade: “flat at best.” “Total sales could also probably be negative, approaching approximately 2 percent,” stated James Glassman, senior economist and managing director for JP Morgan Chase & Co. Total fourth-quarter retail volume was $460.1 billion last year. A 2 percent drop this year would amount to a $9.2 billion reduction. Two months ago, the National Retail Federation (NRF) estimated a 2.2 percent increase. NRF has updated its estimate for individual holiday expenditures to check in at $816.69 per person, versus $832.36 in 2007. “Nobody expected the speed of the decline in housing prices,” Glassman indicated. “It has triggered the chaos on Wall Street. But it is not about the consumer; the consumer is rational. They weren’t responsible for the near-panic in the financial sector.” Although unemployment is approaching 8 percent, Glassman believes the general economic situation will start improving after the second quarter of 2009. Dana Telsey, CEO and chief research officer of Telsey Advisory Group, pointed out that the holiday selling season this year has five less days than last year. To compensate, stores have done well in managing inventories and expenses, and by offering special promotions. “Nordstrom has maintained its events that directly relate to the customer,” Telsey reported. “Bergdorf Goodman customers spending $2,500 can expect a $500 refund.” Telsey added that electronics items growing in popularity this year will be smaller products, such as navigation aids and mobile phones selling for up to $200. “Large-screen TVs are this year’s ‘family gift,’” Telsey said. David Wolfe, creative director of Doneger Creative Services, told the audience that fashion retailers who have instituted a system of “constant newness” are better prepared to stay profitable in the current economic climate. “They have less inventory, but bring in new merchandise more frequently than in the past,” he explained. “The payoff is higher margins.” Kimberly Grabel, senior vice president of marketing, Saks Fifth Avenue Enterprises, said her company was staying true to its brand positioning. “We are extending the snowflake theme that started with snowflake shapes being beamed with lights onto our Fifth Avenue façade,” she said. “The design has appeared on our shopping bags and gift boxes. Now we have commissioned a jewelry collection inspired by the beauty and variety of snowflakes.” Ed Jankowski, senior vice president/general manager, Godiva North America, concluded the meeting with a summary of his firm’s plans to gear up for the fourth quarter by hiring 40 percent more retail associates, establishing three pop-up stores in New York and adding 50 kiosks to the 271 stores currently operating in the United States. —Vilma Barr, New York Editor www.ddimagazine.com Photo: © Chad Mcdermott | Dreamstime.com December 2008 http://www.ddimagazine.com

Table of Contents for the Digital Edition of Display & Design Ideas - December 2008

Display & Design Ideas - December 2008
From the Editor
Contents
News Watch
DDI’s Leadership Forum 2008
Consumer insights
Editor’s Choice
Snapshots
Alexander McQueen
Eye On: Luxury
Right Light
In-Store Technology
Product Spotlight
New York Report
DDI’s NADI Show Preview
New York Retail
New York Restaurants
Calendar
Advertisers
Classifieds
Shopping with Paco

Display & Design Ideas - December 2008