Nielsen’s 2009 Retail Industry Outlook: The Sky is Not Falling

Last night I had the pleasure of attending the Atlanta Retail Design Institute holiday party. Throughout the mixer I was able to share some interesting dialogue with other retail professionals about the state of the industry. Then this morning I read Nielsen’s 2009 Industry Outlook and it appears that we’re all coming to some of the same conclusions about where the retail economy is headed.

The Nielsen report covers 20 important areas for change. I’ll just highlight the few that came up in conversation with fellow retail professionals.

• “Ad spending will be tight. ”
  This includes in-store media. “Nielsen reported significant ad spending declines in the first half of 2008 by eight of the top 10 advertisers—down roughly 6% during the same period in 2007. As companies continue to downsize and scrutinize spending, expect these declines to continue, especially within the automotive category and with Financial Services companies. However, product categories such Direct Response Product, which increased spending 20.48%, and Credit Card Services (+18.95%), should continue to spend on advertising.”

• “Coupon redemptions will rise.”
  With all of the lifestyle adjustments that consumers had to make during the gas price crisis, people are now very comfortable with the idea of changing their habits or starting new ones to save a dollar. “As consumers look for more deals, expect coupon redemptions to increase. While coupon activity is actually flat versus year ago, this is positive news as it is the first time in many years that redemptions didn’t fall. As more manufacturers and retailers make it easier for consumers to gain access to coupons via email, mobile phones and in-store methods, consumers will take advantage of this cost-cutting strategy.”

• “Brand prestige will be driven less by premium price. ”
  Consumers are not consuming unless they see a real value. Marketers will have to get much closer to their customers to find out what services will really make a difference in their lives…then give it to them. “Expect to see fewer premium-priced new products introduced into the market in 2009. However, focusing on low price may under-deliver on expectations. Marketers should look to emphasize a brand’s value proposition in new and unique ways by linking the value message to the consumer benefit.”