Dr. Jeff Dietrich is a senior analyst for the
Institute for Trend Research. ITR’s forecasts
have appeared in The Wall Street Journal,
New York Times, USA Today, Business
Week, The Washington Times, and others.
“It is not necessary
to change. Survival
is not mandatory.”
• Sluggish job and wage growth feeds the ongoing soft inflationary cycle (discounts), which does nothing to encourage shoppers
to act quickly. Why buy today what will be cheaper tomorrow?
• Steep discounts have become the norm and have eroded the
bottom line, a trend that is not likely to end in 2014.
Also, there is talk in Washington and in the media (as election
rhetoric heats up) about raising the minimum wage. In addition,
Target just announced it would not provide health care for its
workers—one more sign that the cost of “Obamacare” is creating
some critical choices for employees and still feeding a wall of worry.
When margins are reduced, retail must make hard choices on how to
maintain a competitive advantage and what is of most value to gain
market share. Those in the retail environments area of the industry—whether retailers or suppliers—must be able to engage in that
discussion at some level and prove their value proposition.
BUT BE ENCOURAGED
Those involved in retail environments should be encouraged by the
year-end results of 2013 and the way things are shaping up as we
enter 2014. The U.S. economic leading indicators are overtly positive. There will be pockets of instability and mild weakness as we
finish this year, but no negative cycle is in view. What has been mild
and uneven growth in recent years is shifting to stronger, steadier
growth across the broad economy. Consumers and businesses
appear more settled. 2014 will finish better than 2013.
When I asked the co-founder of the stretcher company (now
retired) what he thought contributed most to the success of his company, he said simply and humbly, “Well, both of us loved to tinker.
Even when our customers were happy, we were never content with
what we had done. We were always looking to tweak something and
make it even better. When tweaking grew beyond our abilities, we
hired talent that would move us to the next level. We were always
pushing the envelope. We had some notable failures and many great
As I listened, I thought of Edward Deming’s remark, “It is not nec-
essary to change. Survival is not mandatory.” Or, as some old guy
once remarked, “The future ain’t what it used to be, but it is better
than it was.”