What to Watch in 2011

Retail is ever-changing but it is those changes that educate, intrigue and sometimes entertain enthusiasts such as myself. Being aware of what is going on throughout the whole retail industry; regardless of the product a company sells, helps to educate fellow retailers about the successes and pitfalls within the industry and the changing trends in the business. Monitoring these changes also inform students and young professionals entering this industry, making them stronger candidates to employers.
Because this is the beginning of a new year, let's take a look at some changes that started the end of last year and will continue to change and make an impact in 2011. These are some of the stories to watch.

1.      Re-sizing retail space. Some retailers who have previously prided themselves on oversized, gigantic spaces are now experimenting with smaller retail spaces. Some of these retailers are looking at smaller, urban prototypes to expand into markets like New York City which does not have the space to house an oversized superstore. Other brands are looking to capitalize on increasing profitability and sales per square foot or are looking to experiment with small accessory only stores and concept stores. And still others are seeking new, smaller spaces to create a more neighborhood feeling that relates to the average Joe.

Be on the lookout for retailers like Target and Wal-Mart who are looking into urban expansion by creating smaller spaces. Wal-Mart has been researching this in an effort to expand into the New York City market. In addition to Target and Wal-Mart, Bloomingdale’s is looking for new locations to for its scaled-down concept store like the one in Soho in New York and many other retailers are exploring accessory only stores and concept stores such as wedding concepts.

2.      Changing of the guard. Many companies experienced changes in management and ownership which will impact how these companies operate and could change the products and services offered to the consumer.

Last year Mark Lee took over as the new CEO of Barney’s New York and has been exploring changes throughout the executive team which will surely lead to some exciting new changes for the retailer.

In addition to Barney’s, there continue to be rumors around a takeover of Saks with Diego Della Valle buying up shares. J.Crew will also continue to move forward with a $3 billion deal to go private. And lastly, what changes will take place for Neiman Marcus with Karen Katz at the helm as CEO and her focus on bringing Neiman’s to the forefront using the Web and Social Media.

3.      Going Global. Some US companies have been looking into global expansion for the last few years. Two such retailers are Abercrombie and Victoria’s Secret who have looked into expanding overseas to Europe. Anyone who has been to the corner of 56^th street and Fifth Avenue in New York would witness the phenomena of Abercrombie and the line that develops outside by 10am and sometimes earlier. If you walk past that line often times you will hear many different languages with only a minority speaking English.

Abercrombie and Victoria’s secret are very popular with foreign tourists given their exclusivity to the US in addition to their unique product offering which is unavailable to them at home. So if these two companies venture overseas how will this affect the exclusivity factor that draws so many foreigners to purchase while on vacation? Would this affect US sales?

There is a lot to watch out for in 2011 and MODE will continue to keep you up to date.