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  • Staying ahead of the retail curve

    The holiday shopping season is more than just several weeks of frantic work for small-business owners in the retail field.

     More people than ever are comparing prices in-store using smartphones.The season is also a major lifeline for the economy, pumping huge sums of revenue into small businesses around the country.

    In fact, without the holiday shopping rush, many small businesses would have to close their doors. The National Retail Federation reported that holiday shopping makes up 20 to 40 percent of annual retail sales. In 2012, holiday sales accounted for 19.3 percent of the industry's sales total. If that's not enough, the NRF estimates the retail industry creates 720,000 to 780,000 seasonal employees each year. So when the 2013 holiday sales figures were reported to be lackluster, retailers and economists likely worried about the financial standing of the businesses.

    According to a recent shopper report from Parago, a global incentives and engagement company, retailers need to focus more effectively on communicating with consumers.

    "Retailers have a lot to contend with in this new era of shopping: Highly competitive prices from e-tailers like Amazon, rising smartphone adoption, the showrooming boom and incredibly price-sensitive consumers," said Rodney Mason, CMO of Parago. "For retailers to thrive, they need to disrupt the path to purchase with a dynamic, real-time pricing model. Not just online, but in brick and mortar, too."

    Fast purchases for many consumers‚Ä®
    The problem with trying to communicate with consumers is doing so in a timely fashion. The Parago survey reported American shoppers are highly sensitive to price comparisons, with 65 percent of shoppers more sensitive to price than the previous year. But where things for retailers get tricky is the window of opportunity.

    The survey found that people are making purchases faster than ever. With Parago reporting that four out of five 18- to 48-year-olds own smartphones and nearly 50 percent of consumers compare prices in-store, it can be hard for retail employees to capture the consumer's attention with a good deal, meaning there is more pressure than ever for retailers to attract customers with deals to close sales.

    "The ability for consumers to access near perfect information means that traditional assets like brand name, loyalty, price and number of other proxies consumers use to establish quality, are becoming less important," Itamar Simonson, a Stanford University professor, told Street Fight Magazine. "Certain functions of marketing will continue, but overall, in the long run, we will be looking at decreased expenditures on marketing."