Retailers stung by consumers who refuse to spend are adjusting the way they do business, from cutting marginal suppliers to re-evaluating their pricing. Many merchants are also improving their customer service as they try to connect emotionally to shoppers. Here’s what the changes mean:
SLASHING SUPPLIERS: Stores have been paring inventories for two years. Now they are slashing them, particularly goods from marginal suppliers. In apparel, retailers plan to cut inventory 20 percent to 30 percent for summer and fall compared with a year earlier, according to Kathryn M. Deane, president and CEO of Tobe Report, a retail consultancy. They are also ordering fewer styles in each line.
RE-EVALUATING PRICING: When housing prices were booming and credit was easy and jobs were more plentiful, shoppers kept buying and trading up. Stores were happy to accommodate by stocking ever more expensive products. Now, stores are adjusting their pricing. J.Crew Group CEO Millard “Mickey” Drexler, former CEO of Gap Inc., is working with its factories to lower prices on key items like ballet flats and offer fewer high-priced items such as $1,300 leather trench coats.
HIRING OUTSIDE SPECIALISTS: Companies such as Polo Ralph Lauren Corp. are turning to outside advice on sourcing and currency hedging to reduce the impact of volatile foreign exchange rates.
A NEW ATTITUDE: Consumers are already noticing sales clerks are more polite. There are friendlier greeters at the doors, and shoppers are finding thank you notes in the mail.
FOCUSED STOCK: Stores are ordering narrower selections of goods as they go for the most popular styles and colors, the surest sellers. So customers who need an offbeat color – a prom dress in olive, for example – may have to look harder.