New products and innovation is what will be needed to get consumers in stores in the new year, says Marshal Cohen, chief industry analyst at The NPD Group.
“I think that 2011 is going to be a challenge if retailers and manufacturers particularly don't put new and exciting merchandise in front of the consumer and fast,” says Cohen. “I believe that new and exciting products create those all important necessary luxuries. Those new products stimulate spending growth. The ‘product status quo’ isn't going to stimulate growth, it will maintain spending. Remember basics maintain volume, innovation drives growth.”
Though early reports on Christmas sales remain positive, Cohen warns that going into the new year consumers are focusing their spending on end of the year tax bills, home heating costs and more.
“Consumers have less extra money or less discretionary funds to spend,” he says.