PERSPECTIVES

The prospect of tariffs from 10% to 60% being imposed on goods from Canada, Mexico, China, and other countries by the incoming Trump Administration is certainly contributing to headlines and attention. Another flexibility test for retailers. 

Some retailers have seized on the uncertainty that has resulted. They are using the fear of tariff costs leading to higher retail prices to heighten the shoppers' sense of urgency.

Except for the lingering sugar high, Halloween is well behind us. Retailers know what that means: on to the Holiday Season!

Of course, for most retailers that brings a major focus on sales. But, savvy retailers are especially focused on the targeted ending inventory on December 31. 

Those retailers are carefully watching sales reports, and are poised for action. 

Each week, they identify "What's not selling yet?" And they do something about it! Move it around on the floor? Display it differently? Pair it with merchandise that IS selling? Lots of choices!

What About Markdowns? 

What are we waiting for? The customers are here now. Do we really want to wait for January clearance sales?

Periodically it’s more essential than normal for business owners to interrupt their routine and get a good look at their upcoming financial choices.

And this is one of those times!

Many very savvy people are quite concerned about the economy and consumer behavior right now.

• High debt maturing in both the real estate and the public sectors.

• The multiple international upheavals that continue to grow.

• And, certainly, the impending changes at the Presidential and Congressional level in the U.S

These issues are joined by others to make NOW a very important time for business owners to look ahead financially…maybe weekly for a while. 

“There are a bazillion possible Starbucks orders – and it’s killing the company!”

That is the provocative title of an interesting New York Times Guest Essay* by Bill Saporito, editor-at-large at Inc.

• "Starbucks says there are more than 170,000 possible drink combinations available, but outside estimates have put the number at more than 300 billion. And,” he laments, “the person in front of you always seems to be ordering 100 million of them.”
• "Companies have always had to deal with choice and customization versus the complexity that comes with it. But we know that too much choice can be paralyzing," Saporito writes.

Saporito’s message is very relevant as the Holiday Season approach. To reduce the paralyzing effects of too much choice, now is the time to finalize your merchandising strategies.

As Amazon's second two-day Prime Day of the year approaches – this one is October 8 and 9 – retailers from all segments are wondering (or being asked): "So, how do you compete with Amazon?"

Our response? You don't, at least not directly. Not on their turf. 

Look, independent retailers do have many strategic advantages over Amazon. Your challenge – and opportunity – is to recognize them, and enhance them at every opportunity. Here are some ideas that you may want to consider to allow you to compete on your terms. 

Take Advantage of Market Segmentation 

No more attempts to be all things to all people. Instead, focus on the portion of your market – and the customers – that are most profitable for your operation. (Go here for more about that.)

Remember that life stages (presence and ages of children in the household) drive buying decisions. Shoppers from which lifestage are most profitable for your stores?

We once knew a lady who steadfastly championed the idea that Labor Day should be considered New Year's Eve, and the Tuesday after Labor Day as the start of the New Year. (Yes, she was ahead of her time in many other ways as well.)

Here's her reasoning about the "real" New Year's Eve: as summer fades away and vacations end, the new school year starts up; the baseball season pennant race is on; football games begin. 

As all this happens, she explained, most people take on a renewed sense of energy. 

The promise of a fresh start is everywhere. Optimism abounds!

Take A Minute. Check Out These Two Charts. What Do You See?

This shows the average annual pre-tax income (in 2022) and average expenditures, for US total, and by generation.

 

And this chart shows total US population by generation, by age in 2022.

You may be looking at the future of retailing

Granted, everyone in retailing who looks at these two charts from the Collage Group* will conclude something different. Didn’t you?!

Bold Way To Improve Productivity 

As we look around, we see a popular cost-saving and productivity-boosting tactic being instituted by many national retailers, shopping malls, and restaurants. They are open fewer hours. 

This offers an opportunity for you to revisit your store hours and employee scheduling practices. Maybe it's time to consider some changes, if you haven't already. 

Your customers have voted with their feet. Your goal is to see what patterns there are in their shopping visits. (This could be a fine project for a summer employee home from college.)

Start small; focus on , say, the last four weeks of data collected by your POS system. But this time, produce reports by the day of the week. Yep, seven columns of data. Wait till you see what it can reveal!