Four Market Trends That Are Shaping Retail in 2013

October 24, 2012 | blog | By Mike Sullivan

the-future-of-retail-300x161The retail sector is more complex than ever. With evolving consumer behavior, changing economic environments, and the increasing importance of technology in shopping behavior, industry leaders must adjust their practices to survive the ever-changing retail landscape.

This October, three hundred attendees from more than a hundred companies attended the Texas A&M Retailing Summit in Dallas hosted by Center for Retailing Studies in Mays Business School at Texas A&M University. Speakers from some of the nation’s top retailers, including Toys “R” Us, GameStop, Southwest Airlines, H-E-B,AT&T, and Journeys, explored key issues affecting the retail industry.

Four key themes emerged from this year’s summit that will affect the industry in 2013 and beyond.


According to Craig Boyan, president and COO of H-E-B, household debt drives retail sales. Up until 2007, household debt was on the rise, stimulating the economy and driving growth in the retail sector.

During the economic recession and its aftermath, household debt decreased as consumers tried to pay off credit cards, reduce mortgages and cut down car loans. And as of October 2012, household debt is at its lowest level since 2006.

Decreasing household debt, coupled with stagnant to declining household incomes, means less discretionary income in 2013 and beyond. And competition isn’t going anywhere: In south Texas, the number of food and drug store openings is expected to triple in the next few years, Boyan says.

So how can retailers survive a shrinking retail market? Boyan cites competitive pricing and lowered company costs as critical tactics for H-E-B. The company also serves its customers by offering multi-format tailored retail options that serve consumers looking for value products as well as consumers looking for premium products (i.e.Central Market, H-E-B’s specialty gourmet food retailer).


Advances in technology are changing the way we live and shop in the retail space. Kelly King, president of the South Central Region at AT&T, spoke about creating value in a changing retail environment. King argued that technology is impacting retail by shifting focus from:

  • Stationary to mobile
  • Local to global
  • Products to solutions
  • Transactions to interactions
  • Errands to experience

In September 2012, AT&T launched a 10,000-square-foot retail store on Chicago’s Magnificent Mile. The store is comprised of a series of “boutiques” where customers can interact with technology and experience firsthand how the technology can impact their own lives.

Increasingly, in retail, businesses have to have a compelling reason to get a consumer to come to the store. AT&T hopes to create value by crafting an emotionally engaging retail experience.


A common theme at the Retailing Summit was a relentless focus on employees. Ginger Hardage, senior vice president of culture and communications at Southwest Airlines, spoke about putting people first. So often we hear about companies putting the customer first, but at Southwest, putting their employees first means happy, engaged employees and, in turn, better customer service.

A customer pain point is a problem encountered by the customer in doing business with your brand. Jim McIngvale, founder and CEO of Gallery Furniture, stresses (no pun intended) the importance of eliminating customer pain points. Pain points are more costly than ever: 86 percent of consumers quit doing business with a company due to a bad customer experience, up 27 percent from 2005. Businesses need to invest in their employees, identify their top customer pain points, and involve everyone in the process of addressing these points.


Roy Spence, co-founder and chairman of GSD&M advertising, argues that retail should always provide a better way to improve someone’s life. As retailers, he argues, we’re driven to innovate, and we should always be seeking ways to improve the life of the customers we serve. Spence says that a business’s purpose is a definitive statement about the difference they’re trying to make in the world. Southwest’s purpose is to give people the freedom to fly. The purpose of Walgreens is to help people get well, stay well, and live well. The purpose of Zales is to share love. Purpose makes business decisions clear and oftentimes can be articulated in marketing communications, like this 2012 Walgreens spot:

In the retail industry, change is the only constant. A keen understanding of the shifting marketplace helps retailers improve profitability and performance and better serve all of the stakeholders, including their employees and customers.

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Mike Sullivan

President at LOOMIS, the country’s leading challenger brand advertising agency


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