Rewriting Retail in the New Economy

Yesterday, after I'd posted a draft for our thoughts on retail this winter, I read one of our local paper's analysis of shifts in the wine industry that really summarized what every industry now faces. As consumers have become newly focused on price and spending, every brand is called again to justify the value it delivers, to retain and re-earn its customers and bring them value.

 

Analyzing shifting demographics of the wine industry, Kevin McAllum noted, "Danny Brager, an alcohol analyst with The Nielsen Company, said there is some indication that wine drinkers seem pretty happy with the quality of wines under $20. In a series of three surveys spaced six months apart, the number of consumers who responded that they were finding good wine at lower prices increased from 28 percent to 41 percent.

 

It is a dramatic swing that is unlikely to reverse anytime soon, Brager said. 'Consumers are finding more good wine at lower prices and that may be hard to shake,' Brager said. The obvious implication is that the highest-end wines, particularly ones that don't have cult status and a rabid following, may be in for a shakeout, said Robert Smiley, director of wine studies at the UC Davis graduate school of management. 'Another way to say it, less politely, is some brands are going to fail,' Smiley said. 'People that are selling $150, $250 or $300 bottles but don't have the Screaming Eagle cult status, they're not going to be around in a few years.'"

 

I think that evolution is upon most industries, that American consumers are reconsidering their brand assortment, and the new economy offers an opportunity to reposition and rethink -- all across the board. It's a time of great flexibility and possible movement, a time when consumers are asking, "Do I really need ___?" in a way they were not two years ago. For those vendors that have been steadily honing their craft and their team, it's a real chance to sprint forward. And for all of us, a chance to strap on our boots and enjoy the climb. By Laura Havlek, Sign of the Bear, Sonoma, Calif.