If necessity is the mother of invention, the shopping experience is about to get a lot more creative.
Uneven sales results at U.S. chain stores in June are bolstering the belief that the frugal consumer is here to stay. And that reality is forcing retailers to find new ways to get shoppers to the cash register.
Retailers that survived the recession spent the past two years cutting overhead costs, closing stores and lowering prices. Merchants have little choice now but to boost sales to keep profits growing.
“Right now it’s a market-share game,” said Bill Emerson, a Palm Beach, Fla.-based retail strategy adviser. “You’ve got to get consumers to drive by your competitor’s store and get to you.”
In the past, fueling growth was as easy as building a big retail box on an empty farm field. For the past three decades, retail space grew roughly five times faster than the population, Emerson said. The financial collapse brought the imbalance into stark relief.
A short-lived uptick in consumer spending this spring, helped in part by government rebate programs for appliances, has done little to mend the situation. Unemployment remains high, new-home sales plunged to a record low in May, and consumer confidence sank more than forecast in June: all factors that dampen America’s willingness to shop.
Grabbing shoppers from rivals is no easy task. But merchants are making a stab at innovative ways, beyond price cuts, to lure consumers into their stores.
This fall, Target Corp. will begin offering a 5 percent discount to consumers using Target credit cards. The cheap-chic discount chain expects the program to fuel a 1 to 2 percent increase in sales at stores open at least a year.
Sears Holdings Corp. is starting to sell groceries online in New York and Chicago through its Kmart stores. Walgreen Co. is expanding into beer, wine,…