No one knows whether it will last, but Americans are shopping. Retail sales growth has continued for 15 consecutive months, and the National Retail Federation projects growth of 3.4 percent in 2012.

Those who are rooting for the economy to break out of what has been a sluggish few years hope the optimistic projections are accurate, but economists and retailers predict that 2012 will be another challenging year.

Retailers say they plan to focus on their customers and on their merchandise this year while trying to overcome a litany of challenges. Here are the most serious ones.

Struggling along with the economy

Like every other industry, retail is up against a fragile economy, with slow growth forecast for well into the first half of 2012. The good news is that the unemployment rate has been decreasing, and consumers have begun dipping into their savings to spend: a sign that either consumer confidence is rising or that they just want to reward themselves for saving so aggressively the past few years.

But food-service retailers and others point out that the increased cost of commodities, everything from coffee to bread to paper products, is problematic.

“It’s a huge challenge to communicate cost increases to our customers and even to our staff,” says Don Pratt, owner of the Aromas coffee shops in southeast Virginia. “If Ghiardelli, one of our vendors in San Francisco, has to pay more for cocoa products, so will we. We need to find out how to let our customers
know that.”

Staging stores

Everyone knows online shopping is more popular than ever, but brick-and-mortar stores still dominate, and retailers say they need to make their stores more attractive to people who are perfectly satisfied shopping online. Retailers say their stores need to become destinations, like Starbucks, where people like to spend time.

“It’s so easy to shop online that stores need to step up their game and make me want to be there,” says Amy Lin, a mother of two in suburban New York City.
“If they don’t do that, I won’t want to spend as much of my time shopping the old-fashioned way, and I’ll shop more sitting in front of my computer.”

Analyzing data

Retailers have never had more information about their customers, but many are struggling to figure out what it all means. In a recent survey by Accenture, 72 percent of 258 North American business leaders said they plan to spend more on analytics. In many cases that means buying software and hiring analysts to make sense of streams of data coming from mobile devices and other electronics.

Figuring out the potential of mobile devices

More and more consumers are using smartphones, tablets and other mobile devices to make purchases, find coupons and learn where they can get the best deals. These days, shoppers might be browsing in your store but using their smartphones to check your competitors’ prices. Retailers say determining how to best take advantage of this technology is a tricky puzzle they must solve.

Embracing social media

Facebook and Walmart struck a deal that will allow shoppers to better connect with the chain’s stores. Expect other retailers to follow suit. According to Booz Allen Hamilton, $30 billion will be spent via social commerce by 2015. Retailers need to figure out the best way to use Facebook, YouTube, Twitter and other social media to its advantage, spending wisely and not just throwing money at it.

“Look at Groupon,” Pratt says. “Throwing coupons out there to hundreds or thousands of people and hoping they come in can impact us negatively as well as positively. Groupon can put you out of business. It can be dangerous.”

Mark Di Vincenzo is a journalist with 24 years of experience and a New York Times best-selling author. Mark blogs via Contently.com.

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