Retailers and ad agency executives gather in the Chicago Hilton on the shore of Lake Michigan for a three-day national conference.|
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"Anybody who says the economy will turn in 2003 is kidding themselves. Even 2004 is a push," said Mark A. Burgess, senior vice president of Publicis Groupe's Leo Burnett USA, who heads the agency's Toys R Us account. "I don't see a lot of silver bullets."
Another retail marketing expert said an unspoken concern utmost on the minds of retailers and mall operators was the possibility of another terrorist attack in the U.S. "Just one terrorist incident in a mall" could be devastating for an already struggling retail industry, the expert said.
The annual conference, being held at the Chicago Hilton & Towers overlooking Lake Michigan, is sponsored by the Retail Marketing and Advertising Association, a division of the National Retail Federation. Some 800 retailers, representatives of their advertising agencies, media companies and supporting businesses are attending sessions. Among those scheduled to make presentations is Gordon Segal, founder and CEO of Crate & Barrel; Marcia Tabler, vice president for creative operations for Sears, Roebuck and Co.'s Lands' End and RMAA chairman;
Others in the industry from around the nation noted that the single biggest issue facing retailers is the onslaught of Wal-Mart Stores and how to compete with the discount behemoth given the new realities of retail. Surviving in the "discount world" is utmost on the minds of retailers, said Paula Ausick, director of brand equities for Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, Chicago.
'The dangerous thing'
Bryan Jay Yolles, executive vice president and chief marketing officer at independent agency Doner, in Southfield, Mich., said because of Wal-Mart consumers have come to hold less regard for the product bought at more expensive stores. "What a brand means at retail has changed dramatically," Mr. Yolles said. "That's the dangerous thing about Wal-Mart."
Mr. Yolles emphasized, however, that Wal-Mart's "everyday low price" policy can be fought with value in other parts of the shopping experiences. "Value to most consumers is not just the cheapest price," he said. For some it may be convenience, selection or other factors that stores can market. "You don't have to compete with Wal-Mart," he said. "But you have to win in another area," he said.
Online retail sales increase
On the bright side, Ms. Ausick noted that online retail is starting to flex its muscle, and not just as a research vehicle for pre-shopping. As part of her research, Ms. Ausick said, "Some people in focus groups had done all their shopping online."
Online shoppers are happy with customer service, even though it does not involve human tender loving care, she added. Computerized programs give feedback on exactly which goods have been ordered and where they stand in the shipping process. The programs also send an e-mail thank you to the customer. "It gives a sense of great customer service," she said.
Still, retail experts are concerned about what the future holds for Kmart. Few have high expectations the 1,500-store chain will make it out of bankruptcy long term. Ms. Ausick said that in focus groups consumers appeared to have coined a new meaning for the word "Kmart": "someone on a downhill slide."