SCOTTSDALE, Ariz. -- “How will you expand your retail playbook—the products and services you offer, and to whom you offer them? How will you make people your priority—both employees and customers? And will you leverage your greatest tool—your stores—to go up against tighter competition, looming disruption and the persistent, painful war for talent?”
These three questions began Winsight’s Outlook Leadership conference Nov. 13 in Scottsdale, with a state of the industry session led by Abbie Westra, editor-in-chief of CSP magazine. Westra explored key consumer, retailer and competitive-channel trends that will drive change in the year to come.
Here’s a look at where the industry stands today …
Unemployment declined to 4.2% in September, then four weeks later closed out at a 17-year low of 4.1%. “We’re right around what economists consider ‘full employment,’ ” Westra said. “With underemployment at 8.3%, that means there are still some people that are below their skill or income level. That’s where you’ll be competing for recruiting the best talent.”
Overall consumer confidence is strong—125.9 in October, according to Conference Board’s monthly index—and so is the personal financial confidence of c-store customers. Overall, 64% of c-store consumers reported their current financial situation as good or excellent, according to a recent survey of 500 c-store customers by Technomic, Chicago. Forty-five percent believe their financial situation is better than it was in 2016, and 66% expect their financial situation to improve next year.
“Overall, consumers in general and c-store consumers specifically are reporting strong financial confidence,” Westra said. “But peel the layers back, and there’s a lot more than meets the eye.” She pointed to the growing disparities between income brackets, and the wealth gap found between and within generations. “How is your core consumer being affected by this? Where does your customer lie in the class dichotomy? And can you expand your customer base to attract more high spenders?”
Westra also explored the state of the c-store retailer, revealing insights from CSP’s annual Outlook Survey (which will appear in the December issue of CSP magazine). Seventy-five percent of c-store retailers reported that their business performance is either excellent or good this year. Asked how they expect 2017 sales will compare to the year prior, 65% of retailers said they expect it to be much or somewhat higher; 13% expect a decline. As for the year to come, nearly seven in 10 expect some improvements. Eight percent are expecting sales declines.
Nearly three-quarters of retailer respondents said they plan to remodel and/or refresh their stores in the year to come. “This is a big key in the quest to continue to decommoditize and differentiate the in-store experience,” Westra said.
Westra encouraged attendees to look at the growth strategy of deep-discount retailer Aldi. “They’ve done a very good job at expanding beyond their core consumer by elevating store design and expanding their higher-end and organic product assortment," she said. "Suddenly you have upper-income parents going into Aldi to get groceries for their families.”
Westra also praised the speed at which Wal-Mart is leveraging its acquisitions. “A little over a year ago, [Wal-Mart] bought Jet.com and gave carte blanche to Jet.com’s CEO to evolve Wal-Mart’s digital strategy,” she said. The result has been some ambitious tests and rollouts, from free two-day delivery to testing delivery using store associates. “Wal-Mart in particular and [online retailer] Amazon have never been afraid to try something and then roll it back or iterate if it fizzles. It gives the green light to all retailers to do the same.”
War for talent
Westra closed out her session by urging retailers to court employees just like they court customers. “We need to be putting as much diligence toward attracting the best people for behind the counter as we do attracting people on the shopper side,” she said. “How will you create a company culture, a brand and a store experience that customers and employees alike will love?”