For three decades, retail selling square footage grew much faster than the population. The financial collapse of 2008 brought about a sharp reduction in consumer spending, which brought this extraordinary imbalance into stark relief. Returning to a supply/demand equilibrium brought on a wave of retail closings that produced huge amounts of empty retail space at very attractive prices.
Many major retailers are in the midst of or have already launched initiatives to "localize" assortments. What, exactly, does localization mean and what are the key elements to success?
The Womens apparel market was worth over $100B in 2009. Women from the Boomer Generation (born 1945-19650) represent over 40% of the women clothing customer population, but have a disproportionate percentage of the disposable income. They should be a primary target and consideration for the apparel industry.
Driven by cheap credit, retail selling space has grown at a 4-6X multiple of population growth. This imbalance was masked by the explosive equivalent growth of consumer debt and a precipitous drop in household savings, which went from 12% of income in the 1970s to -1% of income in the mid 2000s.
The financial collapse of 2008, among other things, brought this retail selling space/population imbalance into stark relief. There is now 46 square feet of retail selling space for every man, woman, and child in America, a figure over 20 times the equivalent in Europe.
What does this mean for the future of 4-wall retailing in America?
There was a great article and discussion at Retail Wire today. The article, by Bill Bittner, presented a strong case for automating the scheduling of the various tasks sent down to store level by the corporate office. My sense is that this is more of a cultural challenge than a systems challenge. What do you think?
