NEW ORLEANS-Retail chains and developers are faced with changing consumer behavior, which is different from what they have had to weather in the past, said speakers here at the International Council of Shopping Centers fall conference. “There aren't any big megatrends any more,” said David Lobaugh, president of Marietta, GA-based consulting firm August Partners. “We used to have megatrends, now we have microtrends.”
That's not to say all retailers have done a poor job of adapting, he said, pointing to the success of such specialty chains as Anthropologie, Starbucks and Zumiez, as well as the reinvention of such major players as JC Penney. “They started listening to the consumer,” Lobaugh said. “They want differentiation, but it has to be relevant.”
One way that the consumer landscape has changed is that we are now in a society that is less dictated by men and more controlled by women, who make 95% of the buying decisions in this country, according to Richard Foy, co-chairman of Communication Arts, a Boulder, CO-based design firm.
High gas prices, consumer credit-card debt, rising construction costs and a market saturation of restaurants have all forced Brinker International to reassess its business, said Shannon White, the restaurant company's director of real estate. “We are suffering from one of the craziest markets right now,” she added.
Brinker has tried to combat those conditions through changes at its On the Border Mexican chain. The outfit is now putting its restaurants in grocery-anchored centers to cater to customer convenience, has cut dining times by 15% and has tested smaller prototypes, she said.
But Brinker has not yet broken into urban areas like some other chains because of the high costs entering those markets, according to White. “Anything that makes it more expensive for us draws the dollar we're going to make on the bottom line down even further,” she noted.
Whatever the challenge, consumer research is key in trying to keep up with consumers' changing priorities, Lobaugh said. That can be done with more of a reliance on focus groups and surveys and less of a stress on market data, such as Census figures. “If you're only looking at trade-area data, you're only looking at half the picture,” he concluded.
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