From The Co-Founders


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

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Who's Best for the "Never Normal"?

You've no doubt seen the headlines and the commentary:

  • "Retailers Stumble Adjusting to More Selective Shoppers" *
  • "Consumers Uneven Spending Fuels Caution Among Retailers" **

Consumer spending is up, but not on what was expected, especially those publicly-traded chains that must report quarterly. 

  • "As people watched the prices of food and gas rise, their spending became more selective, leaving retailers with shelves of inventory they couldn’t get rid of." 
  • "Although some consumers are cutting spending on goods, it is being accompanied by increased spending on services," according to Mark Zandi, chief economist of Moody's Analytics. **
  • "A glut of inventory weighed on companies’ balance sheets: Inventory at Walmart rose 25 percent from this time last year. At Target, it increased 36 percent. And Kohl’s said inventory was up 48 percent." *

Even the time-honored practice of discounting isn't as effective as it once was, according to some.

  • “There is a point at which lower prices don’t trigger incremental demand because the consumers already have it,” said Simeon Siegel, a managing director at BMO Capital Markets.  
  • "Some big-ticket purchases — like an exercise bike, living room couch or patio grill — will happen just once. In other cases, the amount of time between purchasing and replenishing will be longer," noted Siegel.

And then there's this: As noted in American Business Journals, "According to a study of more than 24,000 customers by Accenture PLC, 88% of executives believe customer desires are changing faster than they can change their business."

And that's really the issue, isn't it? Who is best able to cope with and adjust to this new/fickle/volatile environment? 

  • Those operations dependent on predictive analytics algorithms and artificial intelligence to forecast sales based on number-crunching of past transactions?  
  • Or, those who are focused on their customers – and the real life demands of the people in their communities and markets – who can apply a dose of judgment to their "best guesstimates" of sales? That is, independent retailers.

We have more confidence in the latter. But even having a full complement of good judgment at the ready can be small comfort amidst today's pressures for retailers. Cash flow is affected by lagging sales of spring merchandise; vendors press for ever-earlier orders and shipments.

And the customers continue to be their unpredictable selves. 

It has been a long time since anything felt like "normal." Indeed, some have suggested that those yearning for the "New Normal" need to change their expectations; time to prepare for the "Never Normal!" 

"Never Normal", eh? Just another day for independent retailers!

* Retailers Stumble Adjusting to More Selective Shoppers , Jordyn Holman, New York Times, August 19, 2022
** Consumers Uneven Spending Fuels Caution Among Retailers, Annie Gasparo and Theo Francis, Wall Street Journal, August 1, 2022

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