PERSPECTIVES

From The Co-Founders

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Tips, Tactics & Strategic Insights and Commentary
from The ROI Co-Founders, Pat Johnson and Dick Outcalt
Outcalt & Johnson: Retail Strategists LLC; Retail Turnaround Experts

Many times during 2020 we spoke of "disruption with a capital D!"

And now, more than a third of the way through 2021, that Disruption with a capital D shows no signs of abating. Instead, it just keeps morphing (not unlike the Covid strains that keep emerging....) 

But the disruption that we see emerging is in the attitude,  deportment, and psyche of Millennials, and the many people who are now acting like Millennials. This is showing up in the attitude of shoppers as well as employees. 

 

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  • "Consumer confidence rose sharply for a second straight month, hitting the highest level since the pandemic began," according to the Conference Board Consumer Confidence Index. 
     
  • "Economists believe that the rising consumer confidence will bolster overall economic growth as consumers, who account for 70% of economic activity, step up their spending as lockdown restrictions are eased." *

This is welcome news for many retailers, as consumer confidence has been a key leading indicator of retail sales.

However, a note of caution: retail sales are not the sole component of consumer spending.

  • "As more businesses and cities reopen, consumers will have even more places to spend the savings they've accumulated during the pandemic." **

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As we approach April of 2021, the question for retailers is "Now what?" Having survived 2020, in many cases on guts and guile, we must now focus on how best to survive 2021 and beyond.

As having one foot on the dock and one foot in the boat, the future of retailers in that Red Zone is not a pretty picture. 

Granted, there is much talk about the expectation that "convenience" will become a major factor for shoppers going forward. And we don't disagree. 

  • Throughout 2020, millions of shoppers – including the older Baby Boomers – discovered the benefits of online shopping. Then, as brick-n-mortar retailers scrambled to survive, the increased availability of delivery, curbside pickup, BOPIS (Buy Online, Pickup In Store) and BORIS (Buy Online, Return In Store) has been well received by a broad swath of consumers. 

Here's the deal: We see that this has brought heightened awareness of two different retail strategies: Convenience Retailing versus Destination Retailing

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Have you noticed? From the growing Shopify online businesses, to an array of pop-up shops, mobile "fashion trucks," or newly-repurposed spaces in neighborhood shopping districts, there are many new retail operations emerging. They're actually springing up!

Plus, there are the established retailers who, having shed many legacy features, are re-imagining their place in the ("Coming soon!") post-pandemic environment.  
 

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It's a new year. And now, another new month. How about a new sense of beginning, a fresh start?

Alas, the coronavirus pandemic continues to prove Dr. Anthony Fauci right:"The virus is in charge."

As you have noticed, all around us there's delay. From Major League Baseball contemplating a month delay, schools and universities very slowly resuming in-person classes, or a decidedly different lineup and focus of Super Bowl advertisers, we have no choice but to continue to be patient. Isn't that the pits?

As Daphne Howard reported*, "Footfall patterns show that getting back to normal requires more than flipping the "open" sign.

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There's something in the air. And no, it is not smoke! 

We believe there is a profound feeling of "springtime."

We know; spring officially is still two months away. But that springtime state of mind IS here. And we all should embrace the opportunities it may bring us.

What's the source of this attitude change?

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"Keep your head up. 2021 is going to be great!"


That message is emblazoned – in sunshine colors - in the windows of Nordstrom's flagship store in downtown Seattle. And yes, on a drizzly January day in Seattle, it was a welcome sight this morning. A nice pep talk for us all.

And a fitting message to follow our reflections on the year we just experienced. 

Since March 2 of 2020, our From The Co-Founders commentary has been focused on the pandemics. Revisiting those was quite the "year in review" experience.*

  • From March 2: "This is no time to overreact, nor to be dismissive. Look for the facts!"
  • And, "Our focus is on those impacts that demand the most judgment from owners."

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This Holiday season is bringing three big waves for retailers, in rapid succession. And each one requires a strikingly different management response. 

Wave #1 - the High Margin Wave - has begun in earnest, and will continue through Christmas Eve.

Faced with the shipping delays (and surcharges), customers have turned to brick-and-mortar stores. The savvy retailers are ready for them.