PERSPECTIVES

As we emerge from the pandemics, many retailers are eager to grow. (How's that for an understatement?!)

• For some, that simply means having a better year than 2019 (because 2020 was such a disaster), and they relish having survived.
• Others are looking to expand by adding locations, whether by acquisition of existing stores, or taking advantage of vacated retail sites. 
• Still others are focused on expanding their newly-established e-commerce capabilities. 
• And, for some, still other imaginative ways.

Trade shows are opening up with great success and eager buyers. Landlords are eager to fill vacancies, and in many instances, to cut deals. Vendors are eager to quit thinking about supply chain problems and start selling their merchandise, especially at trade shows. Plus, the continued growth and expansion of online wholesale marketplaces makes far more product available to retailers. 

Then there is the access to capital. Lots of money is floating around out there

All in all, it creates an environment of exuberance. "Seize the opportunity" is the rallying cry. Indeed, for some retailers, FOMO – that Fear Of Missing Out – is pushing them to make some major decisions. 

A few years ago we were on a PBS news show about retailing's ups and downs. Several months later, one of us ran into a teacher of one of our kids. That person excitedly mentioned having seen us on TV, saying "I didn't know you knew so much about retailing." (Yep, known just as someone's parent, right?)

But then this very well-educated person said the key thing: "I never knew there was so much to be known about retailing!"

Well, that incident happened a few years ago when retailing was perhaps more understandable, even more predictable. Alas, those days are history! Today, nothing in retailing is quite as understandable or as predictable as before. Or as manageable!
 

We often caution that many vendors are so much better trained at selling than retailers are trained at buying. In their eagerness to grow sales, and the associated promise of thereby growing profits, it is all too easy for retailers to become overbought. Instead of higher profits, they can find themselves in a cash flow crunch.

And that was in Before Times, before the pandemics. Throughout 2020 and continuing now, vendors and retailers alike have increased their online capabilities. Ordering online brought new challenges to buyers and sales reps, but also saved time and improved access. 

We have applauded these advances in technology, but...

Here's a post-pandemic strategy that should not be missed: higher margins! 

Not the entire store, of course; you must be a merchant here. 

But think about it: many shoppers have increased savings, reduced debt, or gotten their job back. Maybe all three.

And after months of being at home, and spending on home improvement and groceries, many shoppers have pent-up demand to spend on items they have had to postpone, like for themselves. Whether that would be in a restaurant or in a specialty store, shoppers are more willing and able to spend. (And some even feel entitled to spend.)

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. 

The just-released "2021's Main Street Business Survivor Study" from the Pandenomics series conducted by the PYMNTS.com folks* focuses on the "Main Street Survivors:" those small to medium sized businesses "that have weathered the pandemic's fallout." 

Vital lessons.

What have these "survivors" done differently than the rest of SMB businesses? Here are the major findings of their study. We think that you'll see many of the survival steps you have taken, or be prompted to adopt some others. 

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.   

As we noted last week, retailing is being affected by different patterns of seasonality. The old timing patterns for ordering, seasons, and events no longer apply. New "Rhythms of Retail" must be established by all retailers.

So it was with great interest that we read a blog post about Pop-Up Retail: Not Just for Start-Ups.*  It featured results from a recent study out of the UK suggesting that "the pop-up retail sector is growing at 12.3% per year. And the U.S. pop-up industry has grown to approximately $10 billion in sales."