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By Tony DeMasi, editor
espite what you might spend on advertising, when it comes to
retailing, your customers’ tongues are the best form of advertising…
provided that they are saying good things about your
store. In a major study by BIGresearch, a poll of 15,000 consumers
discovered that 68 percent of them use other media while watching
TV, 69 percent while reading newspapers and 71 percent while online.
At 57 percent, radio has the least amount of simultaneous media usage,
probably due to the fact that many people listen to the radio while driving.
But when it comes to the question of which medium influences consumers
most, the big advertising media all took a back seat to humble
word-of-mouth (WOM,) which may be far less manageable than conventional
ad-supported media, but which also seems to be more effective.
WOM outperformed other media in two major product categories: electronics
and automobiles.
BIGresearch reports that 94 percent of consumers regularly or occasionally
give advice about products and services they purchased and 91
percent regularly or occasionally seek advice.
So, when a customer complains, listen and do something about it. Even
if a customer is a chronic complainer, pay attention and make nice with
him or her. That complainer might have access to the ears of a lot of customers
and would-be customers you can’t afford to lose.
Bill Gates certainly knows that situation. He recently said, “Your most
unhappy customers are your greatest source of learning.” So, if you’re not
big on taking my advice, let’s see you argue with the most successful businessman
of all time - and the richest person in the world!
4.8 Percent Growth This Year
The National Retail Federation (NRF) released its 2007 forecast, predicting
that retail industry sales (which exclude automobiles, gas stations, and
restaurants) will increase 4.8 percent from last year. According to its quarterly
Retail Sales Outlook report, the NRF expects subdued first half economic
growth to give way to accelerated sales in the second half.
Retail sales increased 6.3 percent in 2006. The stronger-than-expected
sales surge was fueled by robust consumer spending in the first half of the
year. As expected, the sales picture weakened in the second half as consumer
spending power was challenged by the housing slowdown, high
energy costs and lackluster employment growth.
“This year, slow economic growth will be reflected in moderate consumer
spending and retail sales gains,” said NRF Chief Economist
Rosalind Wells. “The quarterly industry sales pattern will be the opposite
of last year with modest gains early in the year and better increases in the
second half.”
As a result of the slowdown in housing, sales increases at building material
and garden equipment stores experienced a sharp deceleration last
year. Strong gains of 20.0 percent at the beginning of the year slid to -4.3
percent at year-end. Furniture stores also saw an
8.0 percent sales gain in the first quarter moderate
to 2.5 percent toward year-end. Other categories,
such as general merchandise stores, apparel specialty
stores, health and personal care stores, and
food and beverage retailers maintained steady
sales gains in the mid-single digit range.
According to the Outlook, industry sales gains
of 3.8 percent in the first quarter should increase
to 4.6 percent in the second, 5.2 percent in the
third, and 5.7 percent in the final quarter. For the
year as a whole, industry sales are expected to be
up 4.8 percent.
Current retail trends will persist throughout the
year. Luxury retailers will continue to outperform.
Online shopping will continue
to escalate. Retailers catering
to the lower and mid-level
income consumer will find
achieving sales gains more
challenging. Demand for
merchandise related to the
home will be impacted by a
soft housing market.
Hot Chili!
The deep, spicy red hue
called Pantone Chili Pepper
19-1557 has been named
Color of the Year for 2007,
Pantone announced this
week. One of 3,000 colors
available in Pantone’s line of
interior and exterior paint,
Chili Pepper is an easy way to
make a bold statement in any
room, according to Pantone.
“Whether expressing danger,
celebration, love or passion,
red will not be
ignored,” explains Leatrice
Eiseman, executive director
of the Pantone Color
Institute. “In 2007, there is
an awareness of the melding
of diverse cultural influences,
and Chili Pepper is a reflection
of exotic tastes both on
the tongue and to the eye.
Nothing reflects the spirit of
adventure more than the
color red.”
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