It's Just the Gypsy in Me

Predicting Retail Trends

– Don Capman, President, J.D. Associates

As usual, let’s start by having some fun. I want you to imagine that you are a merchant in a small Hungarian hamlet in the mid-eighteenth century. Since you are into high couture, you make all of your apparel by hand and fetch a tidy price for your merchandise. Now, the dilemma… what will your customers be wearing next year? Will they go for woolens, linens, silks, or leather? (Synthetics weren’t invented then.) Since your decision may mean taking a danger-ridden buying trip to England, France, Ireland or the Far East to procure your raw goods, or simply slaughtering a local herd of cattle and tanning the resulting leather, your instincts need to be correct. But fear not! Just as you are beginning to throw the dice in hopes that chance will guide you, an oxen-drawn wagon pulls into town. Inside the wagon is the famed fortune teller, Madame Kapusta and her infallible crystal ball.

Just in time, you climb the stairs of the wagon, pay her fee, and watch as she mysteriously gazes into the future to predict the next big trend in retail. Finally, with a burst of excitement, she tells you that she sees a herd of cows marching contentedly to the slaughterhouse. That’s it! Thank God, no dangerous trips. That was easy. Leather is the way to go. Unfortunately, the Madame did not see that a new trade route has opened from the Far East and the new rage is silk. So, in the middle of the season, you find yourself with a shop full of leather pants that need to be put in storage until disco is invented a couple of centuries in the future. Thank you Madame Kapusta!

Buying for your store(s) always presents a risk. Am I buying the right goods? Do I really know what my customers will want a year from now? What conditions will affect fashion or produce trends in the marketplace? How can I anticipate trends before I buy? Well, I have good news for you. Like Madame Kapusta’s crystal ball, you have your own crystal ball and a much more reliable one at that. It’s called your computer and it’s connectivity to the World Wide Web. There is a wealth of predictive trend information on the Web if you just take the time to do a little research and subscribe to the newsletters you think will be the most useful to you. No one source can accurately predict future trends, so you must look at a variety of data sources, choose some, and take notice of them perhaps once a month. I know that many of you feel you can’t afford the time to surf the Web for meaningful data sources. The truth is, you can’t afford not to take the time. You don’t want to end up with a store full of leather pants waiting for disco to come back into style. Your research time will be cut down considerably once you decide which sources are right for your industry and you can concentrate on filtered and meaningful data. Valuable data sources other than the Web should also be considered. Give some thought to the following:

1. Customer Feedback— Don’t be afraid to ask customers what they think the latest trends will be. Often, your best and most frequent customers are well versed on your products and will tell you what new merchandise will be coming down the road. Most consumers are very well educated and keep up with the “latest and greatest”. Don’t rely on the opinion of just one customer but look for consistencies in your “best” customer base. They are telling you what they will be buying in the future.
2. Industry Specific Magazines— Whether they be fashion, home and garden, consumer electronics, jewelry, crafts, or any other magazine related to your marketplace, you can often find “look what’s coming” sections that are helping define trends.
3. Television— Don’t overlook this very powerful data source. I’m not necessarily referring to programs on PBS either. Take a look at programs like Entertainment Tonight or Extra. Although these programs might not be your cup of tea, they have a very strong influence on fashion and trends.
4. Your Competition— Shop your competition. If you hear good things about some of your competition, humble yourself and shop their stores or websites. You might learn something about why they are successful.
5. Your Own Store— Analyze your historical trend patterns. Run some historical reports and look for categories that have been consistent performers and compare them to industry wide performance. Do you think these categories will continue to increase in importance or has the trend peaked? Informally poll your customers.
6. Sign Up For Industry Specific Newsletters— There is a wealth of information and there are some very knowledgeable trend experts out there. One expert, in particular, who is well worth taking a look at is Jim Dion. Jim is an internationally known expert on retail psychology and has many great insights into retail trends. Jim’s website is: http://www.dionco.com .

Subscribe to other newsletters and compare their trend observations. Most of these newsletters also contain links to other newsletters with similar content so you can compare their findings. Here are just a few you might want to investigate:

• www.nrf@smartbrief.com
• www.trendwatching.com
• www.retailnet.com
• www.retailwire.com
• www.retailindustry.about.com
• www.chainstoreage.com
• www.springwise.com
• www.blacksretailanalysis.com

These are just a few of the on-line resources available to retailers. Many more are available and becoming available every day.

So, we no longer have to rely on our old friend Madame Kapusta to help us predict the future. We just need to do our homework and use our own technological crystal ball.