The holiday season is fast approaching, and economic signals remain murky around the world. Somehow, many of the G-20 nations have managed to put themselves into unimaginable debt, while China has finally found itself unable to control its currency valuation and consequent inflation. In the US, unemployment remains high and is starting to be thought of as structural – with so many jobs outsourced to other countries that only those with specialized skills are able to find work. Oil prices continue to fluctuate, sometimes for no apparent reason. Yet, despite all this negative news, consumers living in countries with a propensity to consume continue to do so. Retail results continue to be not bad, and the luxury segment is in a downright boom. So what should retailers do? What are they actually doing?

Reduce investment in inventory, but treat that investment wisely:

As of this writing, US in-bound container port traffic is basically flat against last year and is expected to remain so through the summer (per NRF). Overall, we believe this strategy will be successful as long as retailers are able to treat their scarce inventory as a shared asset across all selling channels and stores. Over the past two years in RSR’s benchmarks, retailers have identified underperforming inventory as a problem as large as out-of-stocks. This is true for overall profitability, but in the age of the smartphone, inaccessibility to corporate inventory can cost a sale and ultimately, a customer. Out of stocks are broken brand promises.

In the Midst of Promotions, Don’t Forget Key-Item Pricing:

In RSR’s annual pricing benchmark, Optimizing Price in a Transparent World, you told us consumers are more price sensitive than ever. While that situation would seem to lend itself to executing more promotions, we strongly encourage a focus on key-item pricing as well. Easily recognizable items must be priced competitively, or it puts a retailer’s entire brand in jeopardy. We have heard repeated anecdotal stories from consumers who saw outrageously high prices in High Street locations, and then went on-line to get a price that actually made sense – often as low as 1/3 the price found in the original location. This puts General Merchandise and Apparel retailers at risk of becoming showrooms for lower priced alternative retailers, and it raises serious risk for supermarket and chain drug retailers as well. Finding a bottle of seltzer in a natural foods retailer selling for twice the price as it sells for at a local supermarket is guaranteed to erode brand confidence.

Create Real-time, Cross-department Feedback Loops:

The one thing we are certain about is uncertainty. Reducing lag time to action can make the difference between a successful holiday season, and an unproductive, unprofitable one. Share data gleaned from Business Intelligence across departments, so that they can be prepared for sudden payroll spikes or dips, depending upon demand.

Make Sure you’ve Got A Mobile Site, and Ensure its Information is Accurate and Up-to-date:

It’s actually hard to find a mobile phone that’s not smart these days. You may be the retailer that has the product your competitor doesn’t have. Make your site and products easy to find, easy to read in limited real estate and easy to buy.

Use Social Networks to announce promotions and deals:

FSIs are good, social networks are better. One is casting a very broad net while the other is more targeted to those with a propensity to buy. That does not mean tweeting every fifteen seconds of every day – that’s a sure way to lose the customer’s attention, but when you make an announcement, make it matter.

In other words, the new rules of retail apply in either a certain or an uncertain economy. Consumers are time-starved, impatient, and downright nervous. We have to move beyond pronouncements to engagement. Instead of thinking about selling channels, think about engagement channels. Engage with your consumers early and often. It’s not always about a sell today. It’s about building loyalty. We’ve moved beyond the hot product (for the most part – i-Products are the exception, it seems) to hot brands. The hottest brands engender passion in their constituents. Not all hot brands sell hot products – think about the supermarkets that people are loving to shop.

Following these (relatively) simple steps will help insure reasonably successful retailing, even in an unreasonably erratic economy.