Despite Struggles in the Retail Industry, These Retailers are Doing Just Fine

Matt Shelly
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Retailers have had to ride out some troubling times recently, including a sluggish economy, shifts in middle-class consumer spending, and changing access to goods through the growth of ecommerce. These retail industry trends have given iconic retailers like Circuit City, American Apparel, and Loehmann's a bleak outlook, and even Walmart is losing steam thanks to fluctuations in international currency rates, cuts in the federal food stamp program, and the postrecession loss of affluent consumers. A number of savvy retailers have managed to identify and leverage upcoming retail trends to their benefit, thereby keeping consumers happy and profits healthy.

After several years where promotional discounts were primarily responsible for sales, retail chains are poised for strong growth due to a variety of retail industry trends, which includes less discounting. Global investment banking firm Jefferies released its top picks in retail stocks for 2014 based on the companies' financial strengths and forecasts, naming Urban Outfitters and American Eagle as the strongest retail chains from a financial perspective. American Eagle has broad appeal in the teen sector and a very strong management team that is ready to solidly focus on retail industry trends to drive growth. Urban Outfitters and Anthropologie are expected to also do very well because of strong product offerings. Ann Taylor and Chico's were also chosen as solid stock picks.

Because of the evolving retail trends and the changing way the different consumer classes are spending their money, luxury chains are ramping up operations and expanding at a faster-than-normal pace. Savvy high-end chains like Nordstroms are also exploiting retail industry trends that appeal to the middle class to offer luxury goods at a lower price. Nordstroms launched its innovative online discount marketplace, Haute Look, in 2013 where it offers daily flash sales of a variety of products that appeal to a broad range of consumers.

Retail industry trends in social media are also expected to drive growth going forward. Chain Store Age named the top five social media trends for the retail industry, and the retail chains that jump on these trends and incorporate them into their day-to-day operations may be the ones that come out stronger in the end. These trends include blending ecommerce with a brick-and-mortar operation; placing more of an emphasis on Pinterest; integrating omnichannel communications; leveraging social media to drive consumer engagement; and implementing social shopping techniques, sometimes using virtual currencies.

The dark days of the recession may be a thing of the past for most retailers, but that doesn't mean they should become complacent. Certain retail industry trends continue to shape the retail landscape, and it will take foresight and innovation for retailers to keep up and leverage the trends best suited for their business.


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