It has been a long and slow road to full economic recovery for the country, and there is still much progress to be made. Retailers took a hit during the downturn due to a lack of consumer spending and drags in optimism. However, for the past year, conditions have been steadily improving, and many businesses have gotten their operations get back on track following the recession. On the other hand, there are often many ups and downs on the path to recovery, and it seems as though the nation's consumers have recently hit a snag in regards to their confidence in the economy and their own finances. Hopefully this is only a temporary setback, but if the declines in optimism continue, the retail industry could experience adverse effects.

Consumers keeping wallets closed
According to a recent study by Deloitte, although there has been strong economic improvement over the past several months, 94 percent of Americans stated they still remain cautious when it comes to their spending. To save money, many individuals are becoming more resourceful in terms of finding ways to cut back – 86 percent said they are being more precise about the items they purchase, and 88 percent of respondents have switched to more affordable brands for merchandise. This has led to decreases in loyalty for some retailers, Deloitte revealed, but many merchants are now offering frequent shopper cards to keep customers coming into their stores and onto their websites.

The Consumer Reports Index found that many companies are experiencing setbacks as a result of declines in consumer spending. The research, which analyzes Americans' views toward their personal finances, revealed that low confidence levels were still apparent in March. The index was unchanged from February, coming in at 50.1. The figure has been fluctuating since the end of 2012, but last month was a less-than-positive time for many consumers.

Take steps now to combat stagnant conditions
Fortunately, there are steps that retailers can take now to boost their own customers' confidence and keep shoppers coming back. Implementing solutions such as retail management software can significantly enhance a variety of processes, such as inventory control, consumer retention and customer service initiatives. In addition, adopting technology like mobile POS systems gives merchants the chance to accommodate patrons who prefer to pay with their smartphones. Establishing loyalty programs is another effective way to ensure shoppers return for future purchases.

This entry was posted by Retail Pro on Thursday, April 18th, 2013 at 10:14 am .