CARS HOMES JOBS

Outlook 2012: Retailers harness social media to boost sales and jobs

Sunday, February 19, 2012
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Manager Mike Brand of Panera in Mohawk Commons behind the bakery counter on January 31, 2012.
Manager Mike Brand of Panera in Mohawk Commons behind the bakery counter on January 31, 2012.

The average shopper doesn't need billboards, blown-up advertisements, look books or even commercials anymore to find out what's new in stores.

They open a browser on their smartphones, bring up their Facebook news feeds, check their Twitter timelines, and there among the witty musings of their friends are updates from J. Crew or Urban Outfitters, their local bookstore or theater.

The evolution of consumer-retailer interaction is changing and will continue to change the way retailers -- both big and small, chain and independently owned -- do business in 2012. In addition, a new optimism over expected industry sales is likely to tide over expected job growth within the retail sector.

"Retailers are really trying to capture that audience with in-store deals and offers," said Rebecca Flach, spokeswoman for the New York State Retail Council. "And in connection with all that will be social media. There's a lot of value when a friend tells another friend to like a business online or recommends a product. That's very powerful."

This year, consumers can expect to see their favorite retailers work overtime to get deals, promotions or simple name recognition out to their iPhones, tablets and social networks.

In just the past few years, retailers have been able to reach broader audiences and learn more about their customer base than ever before with social media technology. Of course, it's hardly novel to Generation Y and even their parents. But any popular and growing form of media typically attracts businesses looking for free and easy advertising methods.

So to kick it up a notch, retailers are going to go at it with more creativity and more understanding about what drives consumers to their stores, Flach said.

This means the big chain retailers will look to emulate some small business practices, like the in-store customer service experience they often pride themselves on.

"The big guys are always trying to find ways to be more approachable and be more familiar with their customers," said Flach. "So they see technologies like social media and the economy slowly picking up steam, and they will reinvest their dollars into training and improving in-store experiences in ways they weren't able to the past few years."

Holiday bump

Officials expect jobs to grow in correlation with sales within the industry. As consumer confidence rises, so does revenue. And with that businesses have been able to expand stores, open at new sites and restock staff.

Flach pointed to bulked-up staff levels during the 2011 holiday season as a sign that jobs could be returning to the industry.

"In the past four years, stores haven't been able to hire as much help during the holidays as they traditionally have," she said. "And they always hire more during the holidays because they absolutely have to. But retail sales didn't justify the level of employees they'd had prior to the recession. Last year, though, we saw an improved hiring trend among our members."

The Council found that 71 percent of those surveyed planned to hire the same number of employees or more for the holiday season as compared to 2010.

"Did they keep all those employees rolling into 2012? No," said Flach. "But some of them did. And as the economy continues to move forward, and as long as there aren't any major setbacks, then hopefully we'll continue to see retail sales grow, and from that jobs."

A few trends in 2011 have driven retailers to be cautiously optimistic about sales growth in the coming year. Last year saw record holiday sales the week before Christmas, according to a Retail Council year-end survey.

Eighty percent of stores surveyed said their week-before-Christmas sales were better than or the same as the same period the year before. And the two shopping days after Christmas also gave retailers a boost, with 65 percent of survey respondents saying their sales were better than or the same as last year's post-holiday period.

In addition, the economy has showed signs of a rebound, boosting consumer confidence.

The National Retail Federation is forecasting a 3.4 percent rise in retail sales this year to $2.53 trillion. It's slightly slower growth than 2011, but the numbers project that retail will grow at a faster rate than many other industries.

The retail trade association makes its economic forecasts by weighing a number of factors, including the recent rise in employment, modest income growth, improved home sales and construction, slowing inflation, rising gas prices and consumer willingness to take on debt.

Local officials say they agree with the statewide and national trends, but they've seen both merchants and consumers remain wary.

"I don't think people are necessarily feeling super-confident, but I think people feel today that we are in recovery mode," said Mark Eagan, president and CEO of the Albany-Colonie Regional Chamber of Commerce. "I think people realize that recovery is going to be a process and it's going to be slow and gradual throughout the year. But most people have a little more sense of stability and feel we've almost ridden out the storm."

Only the strong survive

In his time at the chamber, which is made up of 2,400 businesses and organizations throughout the region, Eagan said the recession was unique because it had a make-or-break effect on Capital Region businesses.

It's not that every retailer suffered, he said. Instead, he's noticed that those that were able to just get by in the past were forced to close. And those that were unique, tailored and generally strong before the recession came out on the other side even stronger.

"What's happened to some of the retailers -- smaller ones and national chains -- is quite frankly they're gone," said Eagan. "The ones that were marginal in 2008 are now vacant spaces in our downtown and our little strip plazas. Colonie Center and Crossgates Mall have more vacancies now than they ever have. And a lot of those open leases are from two years ago."

It's not necessarily a bad thing, though. For retailers who rode out the recession, Eagan predicts 2012 will be a good year for sales. And vacant space allows new retailers to come into the marketplace, bringing diversity to the local business scene.

Local retailers and consumers are also mirroring national trends. The growth of online promotions such as Groupon and Living Social gained traction in the Capital Region, and one local entrepreneur even created her own travel version of Groupon.

Mary Song, a Clifton Park resident, leads the one-a-day travel deal site Yuupon.com, which sometimes offers discounts of up to 80 percent.

Eagan remembers his wife recently trekking down to Ben & Jerry's on Lark Street in Albany in the middle of winter after seeing a deal at the store through Groupon.

"They wouldn't have done that coupon in July, that's for sure," he said. "Because people were walking all along Lark Street in the summer. But right now, no one is strolling for an ice cream cone. So businesses are seeing the benefit of this, and are learning to do it wisely."

 
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