Canada's retailers are gearing up
for the back-to-school shopping season. While this time period doesn't
necessarily translate to florists, the retailer advice from industry experts
Ernst & Young still applies.
The 2008 year is seeing softer economic conditions than in 2007 and rising inflation,
particularly for gas and food, parents are eyeing price tags more
closely than in the past.
“Markets have been showing signs of stress in the past few months,”
explains Daniel Baer, Ernst & Young’s Canadian retail and wholesale
industry leader. “In one sense, all retailers are feeling the pinch. As
consumers continue to seek value and convenience, retailers who sell
discretionary goods will need to refine their strategies this year.”
Retailers who are successful will recognize the importance of
collaborative efforts with their consumer products suppliers, and will
adjust to an environment where consumers:
- Are less confident than last year.
- Continue to seek value to offset decreases in discretionary income.
- Are time starved and looking for a shopping experience that will
allow more leisure time and less stress. Given high gas prices,
consumers want to make fewer trips to shop.
- Are skeptical about whether retailers are passing along the benefits of higher Canadian dollar.
- Want their purchases to reflect their social responsibilities and values.
Key strategies to cope with this new environment:
- Use innovative packaging, which reduces environmental (boxes, plastic, etc.) and shipping costs (less weight uses less fuel).
- Focus on innovation. Companies that spent more on innovation during
a downturn saw return on capital employed rise during the recovery
period.
- Ensure logistics between the retailer and consumer product manufacturer are in sync.
- Accelerate the benefits of cost-reduction programs. To cope with
the economic slowdown, some companies have already undertaken
cost-savings programs.
- Ensure the brand offering is consistent across all sales channels.
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