The Lure Of Shopping

American Demographics, July 1, 2002

Further, as consumers retreat into the safety and comfort of their homes, they want to spend less time at the store, especially a store that is not satisfying their craving for a unique and emotionally satisfying experience. They will do more of their weekly shopping in a single trip, so they can get back home and to safety more quickly. More shopping will also be done from the home, with consumers turning to the Internet, mail-order catalogs and even party-based and other direct-selling businesses.

Party plans and other forms of direct selling will be the next guerrilla marketing method to grab share while giving fits to traditional retailers in the years to come. This retailing methodology has everything going for it in today's emotional climate. You get a chance to meet and greet your friends in the safety of a friend's home, thus providing social experiences that people desire. Over appetizers and a glass of wine, you get to look at new, interesting products presented by your friend, a spokesperson you can really trust. While seeing the new products, you can learn how to use them or display them in innovative ways, thus providing the enhancement of education and information. You gain access to special sales offers, and you can pay for the products later, when they are delivered to your home. It is the perfect retailing method for the new millennium. Longaberger Baskets, Blyth's PartyLite candles, Pampered Chef, Discovery Toys, Avon, Mary Kay and many others have known it for years, and soon many other smart marketers will be exploring opportunities to sell in this way. Word of warning: It only works with women, at least so far.

Television shopping mimics the intimacy of party plans. We are already conditioned to think of the television celebrities we invite into our homes every day as our "friends." As a result, the television shopping channels, with their personally engaging show hosts, will become a more powerful retailing medium in the future.

THE COMING RETAIL CRISIS

Office real estate is facing a crisis of excess inventory. After years of creating new office space, coupled with overly optimistic tenants who grabbed more office space than they needed, nearly 40 million square feet of office space will return to the market in 2002, according to Torto Wheaton Research. As new office buildings remain vacant and existing tenants fail to renew their leases, rents will fall and overall office vacancy rates will rise.

Contributing to the coming retail crisis is the shifting pattern of consumer shopping. Consumers are turning away from traditional department stores and shopping more at mass merchants, discounters and warehouse marts. While the sales from general merchandisers in total rose 64 percent from 1992 to 2000, the key driver of growth in this segment was the category of "other" general retailers, including Wal-Mart, Kmart, Target, Costco and Sam's Club. Posting growth of 141 percent from 1992 to 2000, the other general retailers, composed of discounters and warehouse clubs, reached $170.9 billion in retail revenue. In the same eight-year period, traditional department stores, sales grew only 34 percent, not even matching growth of the retail industry as a whole. Non-store retailers also posted triple-digit growth from 1992 to 2000. Non-store retailers include catalogers and mail-order marketers, television shopping, direct sales, party-plan marketers and e-tailers. This segment rose 121 percent, from $73.4 billion in sales in 1992 to $162 billion in 2000. Growth of these two segments - other general merchandisers and non-store retailers - is expected to outpace that of the retail industry as a whole. These two segments will continue to grab market share by siphoning sales away from competing classes of retailers.