The economy blows hot or cold? Nobody knows for sure

Posted on | May 6, 2009 | Comments Off

On the one hand, a lot of inexperienced neophyte business owners think first of starting a retail operation. It’s the first thing they think of.

At the same time, right now, a lot of folks are no doubt thinking You wouldn’t wanna be a retailer right now, not in this economy.

If we are to believe what the National Retail Federation has to say on the subject, these days, Main Street retailers are taking it on the chin a lot more than their online counterparts.

Shop.org and Forrester Research just released a few choice morsels from the recently released State of Online Retailing 2009: Marketing Report.

It looks like online spending continues to grow but retailers don’t expect that to go on forever. About half of those surveyed are expecting sales to slow later this year and almost six in ten say the recession is already hurting their revenues.

“Retailers everywhere are trying to get their arms around a pullback in consumer spending, and online retailers are no exception,” said Scott Silverman, executive director of Shop.org, in one of those quotes-for-press-releases moments. “Online retailers are trying to weather this economic storm by doing more with less, making smart spending decisions, and leveraging effective, affordable tactics like email to grow their businesses.”

Even so, not quite a third of retailers surveyed are cutting back on their planned spending for online operations, while 70% or so will spend as much as, or more than, originally planned. Among those intrepid souls, the holy grail this year is customer retention.

That’s going to be an interesting challenge when you think about the notoriously fickle online shopper.

Now, when they do these surveys, they never mention how the firm size classes break down or even whether this is one of those organizations that exist so the big boys can get together in a room occasionally and wallow in being big boys.

So, I don’t know how reasonable it might be to imagine any of this accurately describes any microbusiness internet pure play retailer. Do microbusiness retailers have as much trouble with customer retention as larger, more impersonal retailers?

Which brings up our May Poll: what is the economy looking like from where you sit, and never mind what the pundits have to say on the subject. Pause for a few seconds and weigh in. And, if you have further observations to make, share them in the comments!


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