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Here we are, in the first week of December, in this tumultuous pandemic year of 2020. Maybe more than ever, you need to have a grip on your cash flow! What will you cash flow look like during December, January and February? Since you must be able to make informed decisions about your business, every day, an up-to-date cash flow calculation is essential. Remember, profits are interesting, but it's cash flow that's significant! Cash flow doesn't have to be fancy. In fact, what most owners need is just to have the basics on the back of an envelope. The savvy ones always have that with them.
Usually at this time of year, we would be encouraging you to remember that "the lull" is about to arrive. That is, that time span from Black Friday/Cyber Monday through early December is typically much slower for retailers. And then, come December 10th or so, the Christmas sprint begins! Ahh yes. That was then. And this is, well, 2020.
Yes, the shoppers WILL be returning. But boy, have they learned a lot during these pandemic times. They are far more comfortable with online shopping, and in many cases, eager to continue that. And the convenience of "contactless" features like curbside pickup and BOPIS (Buy Online, Pickup In Store) are welcomed. In fact, an extensive survey from McKinsey & Company* provides considerable detail about the newly-learned online shopping behaviors of customers, and their expectations of continuing to use these new-found skills.
Particular changes with presumed staying power:
But hold it. Wait just a minute. Our countervailing view is that the "homebody economy" will wear thin. And while customers do care even more about basics and value, especially when it comes to Holiday shopping, they will want "special."
Since Labor Day in the US is the first Monday in September, this year it happens as late as possible. Labor Day will not be celebrated until next Monday, September 7. Most years, most folks would be perfectly happy to have August stretched out even longer. Ahh, those lazy, hazy, crazy days of summer, right?
And so, meanwhile, we regard Consumer Confidence as THE key indicator of consumer spending. Just last week, the Conference Board reported that Consumer confidence is at a six year low*. Ouch! But, was that a surprise to retailers? Not really. Most retailers are well along in coping with these challenges.
"Of course I want it today. If I wanted it tomorrow, I would have come in tomorrow." That's what we call "retail time." Retailers are comfortable with that pace; they enjoy the variety; they welcome the need to change and adjust. But, instead of just keeping life interesting, 2020 seems to have gone overboard in bringing changes and disruption to us all. The triple pandemic of the virus, the economy, and the civil unrest. And oh yes, it's also an election year. Enough already, right? We think the most challenging part of this is the effect on our sense of time.
Maybe you know someone like this. Or are related to them. Or are looking at them each day in the mirror. You know; the restless, impatient ones. The entrepreneurs; the risk takers. Those who want to be their own boss. "Do it myself!" Our theory is that the changes spawned from these triple pandemics – the coronavirus, the economic meltdown, and the civil unrest – will also be evident in new business startups. And that includes all kind of new retail concepts. Out of this period of unprecedented frustration can come new-found backbones.
Yes, we know. Owning a retail business these days is one flexibility test after another. And there are no one-size-fits-all solutions. In the United States, one of the most widespread impacts of the virus is uncertainty. With no end in sight. It is the virus that is in charge. As the president of Alaska Airlines noted, "We don't know what the future looks like."* But the fact remains, whomever is selling to the ultimate consumer has leverage. Might that be you?
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