This morning, an impressive group of retail experts gathered on the big stage to talk with Accenture’s Christopher Donnelly in an appropriately-themed session named, “The Sky Has Fallen. Now what?” It was a sobering discussion filled with somber facts. The panel discussed what the government can and should do to assist the economy, how to survive, and—the ultimate question—when to expect a rebound.
Though the panelists didn’t agree on everything, here’s what they could conclude:
The consumer has fundamentally changed. Telling attendees that his family had its own TARP program—where Mr. Ullman pledged to pay off his childrens’ credit card debt in exchange for the cards themselves—Ullman seemed keenly aware of the importance of teaching personal responsibility. (They forked over all the cards, by the way.) “The next generation is going to have to manage their life with what they can afford to buy,” he said. “That’s a legacy that all of us have to think about because it’s going to be a much tougher economy.”
It’s not going to get better any time soon. As Mark Zandi from Economy.com so concisely put it, “The next six months are going to be very painful. By 2010, he said, the environment would only be “uncomfortable.” He said retailers should realize that this is a year to focus on survival and that next year they should focus on opportunity but not execute. By 2011, he said, retailers may be able to start thinking about plans to expand overseas and in certain regions of the country.
Cash is king. Continuing with the hunker-down mentality, speakers talked frequently about the need to focus their attention on cash.
“My advice to all retailers is every morning to open the right-hand drawer, look in, and see how much cash is there,” said Peter Solomon, founder of Peter J. Solomon company. “I wouldn’t worry about anything else for the next year.”
Strong leadership is essential. While all agreed that the new Administration will face tremendous challenges and opportunities, a discussion emerged about how Americans need strong leadership—both from politicians and businesses—to feel confident about the economy.
“You can’t restore confidence in this environment unless government acts in a concerted, comprehensive and consistent way,” said Zandi. “The policy response to date to this crisis has not been consistent. It’s engendered greater fear and exacerbated our problem.”
Only the best will survive. If there was one point where all speakers were in agreement, it was this: some businesses will succeed while many will fail, but those who do succeed will be in a strong position to grow in the future.
“If you survive, you’re going to win,” said Solomon. “And in retailing, if you survive, you’re really going to win.”