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Emerging Trends in the Retail Industry - 2006

The objective of the Emerging Trends in the Retail Industry - 2006 report is to provide you with insights into where the retail industry is going. This report is designed to aid you in strategically determining the allocation of capital and resources that will allow you to maximize opportunities in the marketplace.

Below is a summary of each of the key trends:

NEW TRENDS
1. Forget advertising. Think “buzz”.
2. PC sales will be slow in 2006, but will greatly pick up in 2007.
3. The garage will no longer be the last room to organize.
4. Health care clinics will be moving to retail.
5. Wal-Mart® will continue to step up their emphasis on PR.
6. Pharmacy information systems will be developed.
7. Labor pressure will be affected by the higher minimum wage.
8. Sales tax plans will be developed that affect Internet sales.
9. CarSpace.com will have an impact on your wallet.
10. Home sales will continue to decrease while home improvement will continue to increase.
11. Energy costs will impact shopping trips.
12. High energy costs will bolster energy-efficient products for the home.

RETAILER
1. Takeovers, mergers, and bankruptcies will continue.
2. Anything you can plug in or operate on batteries will sell.
3. We will spend more on our pets.
4. Retail and product exclusivity will become the norm.
5. Where did that store come from?
6. If it has to do with your health, cleaning, or organizing, it will sell big.
7. We all need another new television.
8. The electronics category will look like a battlefield.
9. The toy category is changing to reach a different audience and occasion.
10. The Internet will soon become the biggest retail location.
11. Home furnishings vendors will see a lot of consolidation amongst themselves.
12. When you go to the store, don’t forget to get the milk and the furniture in a box.
13. EVR retailers will move rapidly into food.
14. Target® will continue to be on target.
15. Winn-Dixie® will run out of gas and fade away.
16. The long-term future for Sears® is not good.
17. Lands’ End® will find a home in a different land.
18. Neighborhood Markets® will expand into your neighborhood.
19. Wal-Mart® will focus on its International Division.
20. Wal-Mart® will not hit the trillion dollar sales mark.
21. The office supply category is on the radar at Wal-Mart®.
22. Unions will finally see victory at Wal-Mart®.
23. Class-Action lawsuits will impact Wal-Mart®.
24. Having the ability to pay by check will continue to decrease.
25. eBay® and Amazon.com® will continue to be the two most influential factors in the marketplace, excluding Wal-Mart.®
26. “Solo category” stores will not be able to survive using price as the main tool.
27. Private label will become a key factor in “solo category” and “category killer” retailers.
28. Furniture will become the next retail war.
29. Wal-Mart’s® latest format is:
30. Gift cards will become the single biggest growth category in overall retail.
31. Retail spokespeople will be positioned to build sales within specific categories and or retail formats.
32. Extreme Value Retailing (EVR) will continue as the hot format in the eyes of the consumer.
33. Niche retailers will be designed to serve a demographic rather than a geographic segment.
34. There will be increased revenue from non-traditional means.
35. There will be continued blurring of a retailer’s website and their retail location in a format we’ll call “webtailing.”
36. Sub or alternative formats will be developed by most retailers.
37. Retailers will have to look at shopper time in a different context.
38. Dating and extended terms will become an even bigger issue for retailers and manufacturers.
39. Parking lots will no longer be an untapped source of opportunity.
40. We’ll see a proliferation of kiosks at retail.
41. POS material will become a significant profit center for the retailer.
42. Retailers will open “showcase outlets”.
43. “Experiencing” the store will become a critical retail concept.
44. Cross-branding of retail formats will emerge.
45. Retailers will focus on branding themselves.
46. Store-specific shelf sets will be widely implemented.
47. Entire departments of a store will be outsourced.
48. Retailers will sell access to outside companies.
49. The role of department stores and traditional grocery stores will continue to decline.
50. Enclosed malls will continue to decrease in both number and dollar sales.

DRUG
1. Pharmacy automation is coming rapidly.
2. Customized prescriptions geared for the elderly.
3. Mail-order is still the greatest threat to the pharmacy.
4. Drug stores are replacing the convenience store and what they used to be.
5. Pharmaceutical companies will closely monitor advertising.
6. The shortage of pharmacists will not go away.

CONVENIENCE
1. C-stores will reinvent themselves to target the fast-food industry.
2. The next generation of gas pumps will have more to offer.
3. Convenience stores will be moving into the selling of staple food items.

CONSUMER
1. It’s all for the Empty-Nest Baby-Boomers.
2. Consumers will be looking for and expecting hand-held foods.
3. Beverages will increase in variety.
4. Diet items will continue to be BIG.
5. “Shoptainment” stores will continue to grow rapidly.
6. Upscale outlet malls will remain the rage.
7. “Lifestyle shopping centers” will still be the center of growth.
8. The “50+” consumer segment will finally emerge as a viable entity.
9. Packaging continues to become the main reason why a product is purchased.
10. Obesity will result in more talk than consumer action.
11. The emergence of the lifestyle/life-maintenance products will be an area with significant growth.
12. The Internet’s role of dispensing information will continue to increase.