(Floral Park, NY; Jan. 29, 2002; PRNewswire) Well-positioned retailers can still realize significant long-term growth despite a weak economy. There are alternatives to waiting for the business cycle to reverse itself, suggested international retail consultants Kurt Salmon Associates at the 91st Annual National Retail Federation Convention and Expo at the Jacob Javits Center in January.

KSA advises companies to focus their efforts in 2002 on 1) cutting costs by eliminating activities that don't add value, 2) improving the effectiveness of the supply chain, and 3) creating growth opportunities.

Priorities: Value and comfort; prepare for recovery; and listen to the consumer.

Consumers buy value and yearn for comfort, a powerful combination that successful retailers understand, KSA reported.

Preparation for recovery is as important as surviving a recession, according to the KSA-led discussion following the presentation. Panelists were Leonard Lauder, chairman of Estee Lauder companies; Terry Lundgren, president and chief merchandising officer of Federated Department Stores; Mark Bozek, chief executive officer of Home Shopping Network; Roger Farah, president and chief operating officer of Polo Ralph Lauren; and John Lipsky, chief economist of J.P. Morgan Chase.

Optimism for recession's end

``The recession is going to end in the next few months,'' said Mr. Lipsky of JP Morgan Chase, predicting a gradual recovery. ``It's just not going to feel great when it happens.'' He believes the current recession, the country's 10th since WWII, will last almost exactly the same length of 11 months, but will be the mildest in 30 years.

Mr. Lauder explained that his ``Leading Lipstick Indicator'' has been a reliable signal of consumer attitudes over the years. When a consumer feels less than confident about the future, according to the theory, she turns to less expensive indulgences such as lipsticks. Statistics support the premise: Retail sales and comparative store sales have slowed dramatically since late 1999.

Where Will Success Come From?

According to KSA, retail success will come from fresh approaches to the marketplace, not solely from recession-based phenomena such as industry consolidation, competition among companies and within units of retail conglomerates.

``Value and comfort are the hallmarks of what we do,'' said Mr. Bozek, whose HSN's entertainment factor positions the network as a destination itself. ``If the only people who shopped on HSN or online were people in the mood to shop, we'd be out of business.''

Federated Stores represent a more traditional approach to creating value and uniqueness, with its large number of private labels, said Mr. Lundgren. He noted that injecting fashion into the comfort concept brings panache to basic products.

Reconnecting With Consumers

``Even in tough economic times, the right product continually sells,'' said Mr. Farah of Polo Ralph Lauren, describing the process as ``push and pull between original ideas and what the customer is telling us. It's that never-ending search for the right product, at the right time, at the right price.''

When retailers and suppliers collaborate, they develop clearer information that benefits consumers and reduces inventory risks for retailers and suppliers, said KSA.

Preparing for Recovery

The best retailers eliminate redundancies and operational inefficiencies, anticipate and react to change. Retailers should take a tip from the shopping public and become ``value shoppers'' themselves, advises KSA.

Even against a backdrop of recession and uncertainty and a challenging outlook, there are reasons for optimism, says KSA: Consumers are spending. Growth is possible. Strategic responses can make a big difference. KSA advises companies to focus their efforts in 2002 on 1) cutting costs, 2) improving the effectiveness of the supply chain, and 3) creating growth opportunities. Resourcefulness and fundamental disciplines can attract customers and fill registers. The retailing industry will emerge stronger and more resilient for the experience.

Kurt Salmon Associates (KSA) is the premier global supply chain management and technology consulting firm to the retail and consumer products industries. KSA achieves lasting improvements for clients in the Americas, Europe and Asia Pacific.