The James Dicks Blog

The holiday season is normally a time when we can enjoy our happiest memories of childhood but these same holidays are also the period of time that typically generates the greatest amount of sales for the nation’s retailers. The consumer is “King” at the nation’s retail centers, which throughout the year supplies two-thirds of our national economic growth. But because this year has been tough at the nation’s retail centers, consumers are especially important during this year’s fourth quarter.

Many retailers attribute 25 to 40% of their annual sales to “Black Friday” (the Friday after Thanksgiving), which is normally a fairly solid gauge as to what the rest of the holiday shopping season will look like. In addition to “Black Friday,” we now recognize the following Monday as “Cyber Monday,” as the beginning of the online shopping season. For many retailers that are already close to ruin, the 2009 holiday shopping season is very likely to tell the story. It could be the final blow for a number of the nation’s retailers and mall operators, already feeling the negative influence of a diminished year for retail sales.

As I shared with you recently, the national spending habits of American consumers have certainly been altered over the past 18 months and the traditional attitudes that the buying public had in the past are forever changed. This means that the nation’s retailers will also have to make some changes in order to cater to the newly formed buying habits of their customers. The plans at the retail centers for this holiday season appear to be centered on traditional values and bringing family together since that appears to be the major desire of the typical shopper this year. Smaller holiday gift giving and more time focused on the important things in life – time with family.

Stores are still hurting from last year’s’ holiday shopping season, which economists say was the weakest buying period since 1967, when the Commerce Department started collecting such data. The feeling is this year could be worse. Consumers with worries about being laid off or reduced hours at work plus lower credit lines are contributing to the dwindling consumer interest in spending this holiday season.

The retail centers will be displaying more things like gingerbread houses while using the traditional red, green and gold holiday colors to touch the current mood of today’s consumer. We’re all looking back when life was easier, safer, and perhaps even happier; those are the values that will certainly attract this year’s holiday buyers.

And according to a recent survey by Information Resources Inc (IRI), about 77 percent of American holiday shoppers said that while they didn’t spend much on the holidays last year they are more willing to open their wallets a little wider this year. The respondents added that they will continue to search for discounts whenever possible. According to IRI “functional gifts such as iPods, Blu-ray players for less than $99, Smartphone’s and clothes such as sweaters and jackets will likely top gift lists.”

There are indicators that suggest the U.S. economy may be coming to the end of its worst days, many consumers remain concerned by limited credit, high unemployment and home foreclosures. The new American consumer continues to save at historically high levels while paying their down debt. Just examining those concerns imply that we could experience yet another challenging holiday season for the nation’s retailers.

An economist once told me that the factual “story” behind any economic report or event is almost entirely based on sociology, the study of how human society actually operates and reacts to outside actions. It is certainly apparent that when the economy is either “booming” or “busting,” the spending habits of the global consumer normally change dramatically.

Those who watch our national economic situation know that our nation’s economic foundation is based on whether the American consumer is in a spending mood; two-thirds of our national economy is based on whether the public is willing to spend their hard-earned dollars at the nation’s retail centers, car dealerships, or within the service industry sector. But when things start to go bad, as they have over the past 18 months, spending habits can change drastically, damaging the economic infrastructure until consumer confidence finally starts to mend.

There are some economists and business leaders today who believe that the current global recession has not only forced consumers to prioritize their spending habits but it may have changed the consumer consciousness to the point that American businesses will have to determine whether or not they are dealing with a customer base with an entirely new spending attitude. Some business leaders believe that is the case.

The CEO of the J.C. Penney Company recently gave an interview to voice his concerns about today’s shifting consumer behavior. Myron Ullman recently said that the U.S. consumer has a lot of anxiety and is very concerned about how upcoming changes in healthcare may affect their finances in the immediate future. He continued by saying that consumers are suddenly coming to the realization that “they may need to save more than they had originally planned. Their spending habits have changed to reflect this for the foreseeable future.”

He’s not alone; the corporate leadership of Best Buy, Drugstore.com as well as CEOs from the service industry (Hotels, Theme Parks, Restaurants, Rental Car Services) are all starting to realize that the U.S. consumer may never return to the spending habits of the past and that a change in their selling and advertising strategies might be necessary.

While people will continue to consume, they question now is what will they buy, when will they buy and where will they buy. Name brand products are taking a backseat to generic or store brand items. Malls are beginning to show signs of weakness – more and more stores are closing while consumers make their way to other, cheaper alternatives. Instead of going to one of the major mall’s “anchor stores,” they are now heading to places like Wal-Mart, Target or K-Mart to purchase the things their families “need” rather than the things their families “want.”

The economy is beginning to show signs of life for the first time in many months. Consumer spending was up in August by the most since 2001, indicating the biggest part of the economy is starting to rebound from its worst slump in almost 30 years. The 1.3 percent increase in purchases was larger than forecast and followed a 0.3 percent gain in the prior month that was bigger than previously estimated. By the way, incomes were also up at a 0.2% rate.

While all that may be true, the level of consumer confidence continues to be the key question. As I mentioned earlier, economics is all about sociology and until the American consumer starts to feel more positive about spending their money at the “corner store,” restarting the U.S. economy will just have to wait.

Everything of substance that we can accomplish in this life is done through leadership – whether on a personal or professional basis. Most people look at their leadership potential as a means of giving themselves more power or control, while the true leader is constantly looking for ways to empower others to ensure the continued forward momentum involved in any undertaking.

There are many significant areas of management that should be addressed daily but the topic of leadership, in my opinion, tops the list to equip yourself to powerfully lead your business to be useful to your customers, while, at the same time, becoming profitable.

In becoming an effective leader you need to learn all you can in order to develop the necessary skills that will help you overcome the trials that you will no doubt face in life. Solid leaders learn not only from formal training courses, but the true leader/manager will also learn the greatest lessons from other leaders who have been weathered by the tests they have experienced in life.

Most of you have heard the phrase “leadership by example.” Every effective manager should urge their subordinates to “do what they do.” Leadership by example is ultimately important. While we can become solid and powerful leaders in our own right, we all learn from other great managers/coaches who “lead by example.” And here’s another important factor to remember. The military teaches that in order to become a successful leader you have to first learn how to be an obedient follower. That is an important message and one that is usually missed.

Great leaders also know that they aren’t working alone. Even the president has advisors who help him develop and enact policy. Successful leaders are mentors who help others develop their own engaging leadership style. It is a difficult job to be strong and humble simultaneously, but it is very important for a managing leader to do so in order to inspire others to reach their personal leadership potential.

Most importantly, you must always, on every occasion, do the right thing. The “right thing” is always honest, sincere, bold and even heroic. If it fosters the proper end results without lying, cheating or stealing, that’s the path you will want to take. The ethical questions we face almost daily can, and often do, force otherwise great leaders to become ordinary mid-level minions or, sometimes, total failures. Know who you are and be that person every day of your life.

The greatest leaders throughout history have possessed a strong belief in themselves. Having a strong dose of confidence will allow you to exhibit the assurance that others will be looking for in a leader. Would you look up to someone that is lacking confidence? I doubt you would. Having self-confidence will also allow you to avoid self doubt: one of the biggest leadership destroyers.

Leadership is one of the greatest lessons anyone can learn and apply in their lives. Leadership brings confidence and confidence will direct you toward a successful end result.