As promised, today we’ll take a look at some retail trends, as noted in the 2009 Industry Outlook for Retail from Deloitte LLP.
Global or local? Deloitte notes that retailers are rethinking globalization when it comes to their supply chain. There are several reasons for this. First, fluctuating fuel costs make long-distance sourcing less desirable and less affordable. Second, increasing consumer and corporate interest in reducing carbon footprints is causing retailers to think twice about global sourcing.
Finally, several notable scares in the quality of products made overseas have caused both retailers and consumers to reconsider the wisdom of products made outside the United States.
“As gains in transportation and offshore labor costs continue to outpace reductions in tariff rates, retailers are looking for ways to minimize the length of the journey between factory/farm, warehouse and store, and to ship in larger quantities to take advantage of economies of scale,” Deloitte writes. “Increasingly, in-country or near-country sourcing and local warehousing will become important links in a revamped supply chain.”
Hmm. This is all worth considering on your next buying trip.
The great demographic shift. Those ballooning baby boomer retirements and the much-heralded potential shortages of next-generation talent are pushing labor costs up and causing retailers to implement programs to retain, develop and motivate high-quality employees.
One thing to note here is that the destruction of wealth caused by the current economic situation may force older workers to postpone retirement and thereby ease the talent crunch that is supposed to impact retailers.
These demographic shifts are influencing consumers, too. “As people move from young adulthood to middle age, they tend to spend less on goods and more on services, particularly those related to finance and health,” Deloitte notes. “Retailers that can successfully sell services related to their core merchandise or simply based on the strength of their brand names can increase their growth by building new markets and expanding share of wallet.”
Deloitte LLP is the U.S. member firm of Deloitte Touche Tohmatsu.