We know something is very different when retail behemoth Wal-Mart ( WMT) said it will cut about 11,200 jobs at Sam's Club warehouses and another 700 to 800 employees from its Bentonville, Ark., headquarters, including marketing personnel, as the company continues to grow by positioning itself as a resilient value retailer. Blame it on Wall Street Greed. Blame it on Entitlement Need. Blame it on Bush or Blame it on Obama. The global economic meltdown has changed everything, and perhaps for the better. Those who think America's way of life is bad does so out of jealousy, guilt, or disdain over our incredible lifestyle, free markets, and often over-the-top consumption and materialism. You know, all of those things that have driven the worldwide economy for decades. As a result of the scandals of a few, the lax oversight of many, we have successfully entered an era of focusing more on saving than anything else. In fact, the word heard around personal and business circles is no longer creation of wealth but preservation of what's left. In the coming months we will be more focused on saving than spending, guarding over investing, and surviving over thriving. This column is not a predictor of gloom and doom, simply another wake-up call to re-think almost everything. For retailers from groceries to car washes, to restaurants and clothing stores, to coffee shops and bookstores, you had better seriously re-think your business model for attracting and retaining customers. Gone are the days of 10 to 40 percent off sales, in which the tiny print says, "selected items." If it isn't BOGO (buy one get one) or some incredible customer loyalty offer, it's not going to work. Casual dining restaurateurs like Ruby Tuesday ( RT), Applebee's ( APPB), and privately held TGI Fridays had better have happy hours every day on everything, two-for-one entrées, and occasional spectacular deals or your seats will remain empty. Oh and did I mention the best possible service with the most gracious attitudes and smiles? At the other end of the spectrum, the likes of McDonald's ( MCD), Wendy's ( WEN) and Denny's ( DENN) are still exploring $1 menus and value-pricing menus.
You've got to pity the smoothie and ice cream shops these days. The concept of spending three dollars or more on a small liquid refreshment, without the benefit of alcohol, just isn't going to happen like it did in the past. And one of retails greatest success stories -- Starbucks ( SBUX) -- is wondering if people can still justify a $5 plus cup of coffee every morning. Hoteliers, like Marriott International's ( MAR) Ritz-Carlton, were convinced opulence, incredible lobbies, and huge rooms were a draw, but "sleep cheap" is going to rule the days ahead, even for vacationers. And I haven't even touch clothing retailers and other segments of the market. However, suffice it to say, buyers are debating fads and gadgets against classics and existing purchases against spending any more these days to be hip. Now I don't want to have you giving up and trying to get a government job, although the federal government seems like the only sector, next to bankruptcy lawyers, that's really thriving these days, but I want you to seriously pause and think about the strategies. There will be continued volatility in retail due to everyone's re-thinking of spending, saving, and investing. Stores will close. Stores will remain open. And, in keeping with the unstoppable American entrepreneurial spirit, new ventures will begin. By no means is the retail sector dead or dying. It's simply facing a brutal, yet mandatory, response to uncertainties in the marketplace. The most successful will re-think their value propositions, consider aggressive strategies to garner customer loyalty, and place a relentless focus on the customer experience.