Hopefully the Great Recession of 2009 is starting to see a turning point and slight optimism is emerging in the media, in the market and on the street. I am reminded about growing up with parents who were a product of the first Great Depression and how they were against taking on debt to get what they wanted. I remember my mother washing out plastic bags to reuse them and smoothing out tin foil for re-use; later I realized this was another manifestation of her years of struggle in a depression.

Hopefully we are starting to see the recession’s end or at least the bottom of the drop. I wonder what will be the lasting lessons that our society keeps from this experience. One result that is emerging is a higher rate of personal savings. Even those who have not lost their jobs or had their pay cut are saving 4% more on average than they were a year ago! For retailers, that means that families making $100,000 a year are spending $4,000 less so the fight for their business becomes that much more intense. The reasons that this change is expected to outlast the recession is the fear of losing a job, the tighter credit, the loss of collateral and asset value and the realization that the spending levels we were at cannot continue. (2005 saving rate was a negative 2.5%, meaning we were spending MORE than we were making as a nation.) Conspicuous consumption is over and we are shifting from a mentality of “I am worth it!” to “Is it worth it?”

This “shift to thrift” is something that puts a greater burden on the strategy, planning, inventory management, expense control, payroll oversight, productivity, training and cash management. All retailers will need enhanced information and methods to manage their buying and inventory more accurately than ever before. That does not mean avoiding spending and buying, but it does mean spending and buying the right goods in the right amounts and landing them at the right time so that payment for them can be covered! Inventory planning must be accurate, timely and implemented effectively if you are to strive, survive and eventually thrive.

Other aspects of the business will require more scrutiny and positive actions as well. New strategy aimed at adapting quickly and effectively to the new environment is more critical than ever before. Many will need to cut staff and expenses while, at the same time, needing more productivity, motivation, innovation and creativity. That means that effective leadership and management are a critical aspect of the plan to strive, survive and thrive. Those stores that rely on outdated management and leadership methods will be flushed from the retail environment as the average household cuts 4% of its spending and there is less demand to go around.

The potentially great news for specialty retailers is that adaptability is in their favor. The independent specialty retailer should have the ability to quickly implement new strategies, leadership, management and control methods in order to adapt to the new situation quickly. The chains and big box stores will require a much longer time period to make adjustments and their survival will be less assured.

I am certainly not to the point where I am washing out plastic bags but I am thinking twice about what I spend and hoping to see my savings account grow. It appears I’m not alone.