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Discount Store News, Jan 6, 1992 by Don Longo

A 1992 Prediction: Consistently Inconsistent

Let's take a look at what 1992 will bring to the discount industry from the perspective of what happened in 1991.

If 1991 taught us anything, it's that consumers are more fickle than ever. Rather than bouncing back after the Gulf War, the economy is in even worse shape today than a year ago.

I'm writing this in the last days of 1991, so it's possible consumers will flock to stores, cash and credit cards in hand, and leave behind a landscape of empty store shelves - and overflowing cash registers. More likely, the last week of retailers' most important selling season will be a continuation of what one merchandising executive described as "the story of the entire year: no consistency." For example, in a recession, one would expect that a store would be more successful with its promotional business. Instead, this executive noted that the base business has been better. "People are being very specific in what they want," he observed. "They want what's hot and that's all they want."

This lack of consistency - a good month where sales outstrip plans, followed by a disappointing month, and so on - will continue in 1992. Consumers outlooks don't seem any more confident for next year. Layoffs at General Motors and IBM continue to dog the economy. Recovery is now being postponed until the fall, but like everything else in this uneven year, there will be vast regional fluctuations.

Despite the uncertainty, one incontrovertible trend will emerge and get stronger in 1992. Relationship marketing between vendors and retailers and between retailers and their customers will be the tool that differentiates companies from their competitors. For manufacturers, relationship marketing is a logical extension of Quick Response.

For retailers, relationship marketing will engender loyalty, and increase shopping frequency and annual expenditures from core customers. Retailers who can form a bond with shoppers by addressing their concerns will distinguish themselves from their competitors and will be well-positioned for growth in a schizophrenic market.