Retailers Plan Expansions Mostly Online in 2010

The nation's retailers are planning modest store expansions this year, but the main focus will be on dramatically updating and personalizing their Web presence to expand customer bases.

It's a far cry from last year, when the nation's retailers held on to their dwindling revenues and simply focused on primary business improvements. The 2010 trends released this week are part of a National Retail Federation (NRF) Foundation and KPMG report based on a survey of 310 retailers.

"One of the overriding themes of the survey is that retailers are striving to do more with less," says Mark Larson, global head of retail for audit, tax and advisory firm KPMG. "And we expect that this theme will continue into 2010 and beyond."

Forget Bricks and Mortar

With the economy showing some signs of health, and consumers wiping the cobwebs off their wallets, many companies are eager to invest in targeted growth opportunities again. Specifically, the survey found the key areas include some store expansion, social media, targeted marketing and advertising, adoption of handheld technology devices, and kiosks and website personalization options.

Consumers have spoken loudly with their online behavior, and retailers are listening, says Anne Brouwer, senior partner with Chicago retail consulting firm McMillan Doolittle. "With the recession and high gas prices, consumers are deciding it's cheaper and easier to shop online," she says. "It's open 24/7 and solves a lot of problems."

The next step is for retailers to make that online shopping experience a little more personal, and somehow connect with the customers. This includes looking at customer shopping habits and industry trends to keep their brands relevant, says Kathy Mance, executive director of the NRF Foundation.

Some Interest in Store Expansions

At the same time, there seems to be some slight movement in expanding the bricks-and-mortar parts of their businesses as well. For the first time in the last year, Mary Beth Jenkins is starting to get calls from her retail real estate clients who are beginning the process of looking for more space for their businesses.

"It's been in the last 30 to 45 days that my phone is starting to ring again," says Jenkins, president of the Laramie Co., a Denver-based commercial real estate and retail consulting firm.

A few survey highlights include:

* Some 43% of survey respondents said they expect to maintain the same number of stores throughout 2010. More than one-third (37%) said they plan moderate to aggressive expansion.

* Nearly half (49%) of those polled report that website personalization will be a major investment priority for 2010.

* After 61% of respondents said customer acquisition was a big part of their initiatives in 2009, only 49% will focus on that in 2010.

* One-third (30%) of those polled say they'll focus on store-allocation and markdown optimization over the next 18 months.

* More than two-thirds (67%) of respondents said customer database/data mining will be a priority for 2010.

* Another 32% of survey respondents cited both online training and self-service kiosks as a priority in the next 18 months.