Economist Offers Multichannel Retailers Recession Insights, Post-Recession Action Plan

• In the short term at least, multichannel marketers will have to compete with bankrupt retailers, such as Circuit City and Mervyns, which are selling out their goods at rock-bottom liquidation sales.
• “Everybody’s going to have to become a banker,” he said, because the challenges in the capital markets will drive that.
• Rethink inventory. “We’ll see much higher levels of inflation going forward,” Steidtmann said. “At some point, the economy will pick up, and there’ll be a need to drain those reserves out, which means higher inflation. So your attitude toward inventory will have to change.”
• Finally, he warned retailers that because there’s been little increase in retail employment over the past decade, although retail employees have been more productive, retailers have lost potential managers. Lower-level employees haven’t acquired the managerial skills necessary to move to the top of organizations.

“We lost a whole generation of people who could’ve gone into retail, but haven’t,” Steidtmann said. “And that’ll only continue with the rising unemployment rate.”