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Retail's big trend | The Diamond of Doom | Got that springtime state of mind yet? | How to focus everything on your BEST customer

Friday, April 12, 2019

From The Co-Founders

Traditional Retailing's #1 Competitor? Maybe!

"Re-commerce" and "the circular economy" are not just catchy phrases. Instead, they are the latest sign that sustainability is the retail industry’s big trend. All brought to you by the Millennials, many of whom are thinking secondhand first.

For instance, consider these new initiatives from REI, the outdoor gear retailer. As recently reported by Andria Cheng in Forbes*, "REI decided over a year ago to make rentals and what it described as 're-commerce' in used gear sales a key business focus to give customers a more affordable option to buy outdoor gear and allow those with growing children or little storage space to trade in or trade up."

What's really driving this? Millennial shoppers, who make up a third of the company’s rental customers (and represented the majority of their more than one million new co-op members last year.)

Peter Whitcomb, REI's 35-year-old director of new business development, notes Millennials’ attitudes toward hard ownership of products and the perception of sustainability.

Over a third of Millennials would rather rent than own a product, REI said, citing consumer research.
And the company is exploring ways for its co-op members to resell and recycle their used outdoor gear at all locations, noting their responsiveness to environmentally conscious consumers who value sustainability and keeping products in use longer.

This a substantial trend due to the sheer numbers of Millennials. Many of today's consumers are not focused on acquisition or long-term possession. Instead, sustainability and re-usability are more important.

Consider Rent the Runway. Car2Go, Zipcar, Uber and Lyft. Formal wear shops (expanding to women's formal wear as well.) The growth of Goodwill stores, or Value Village. Airbnb (instead of a vacation home.)

What do they want? The experience. For that, what matters is easy accessibility to high-quality products and the short-term use of them.

We've not seen it published or said before, but this overall trend may be a far bigger competitor for traditional retailing than anything else we've all been concerned about. We don't mean to be negative; but we do mean to be alert!

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*"With Millennials In Mind, Outdoor Retailer REI Doubles Down On Rentals And Used Gear Sales". Andria Cheng, Forbes, April 9, 2019.

Spring is here, right?

According to the calendar, as of March 21, it officially is springtime. No matter what the weather is doing.

Well, it's time to bring the calendar to real life. Spring is really a state of mind! And that of course means it is a wonderful opportunity for retailers.

No matter what merchandise you sell - whether it's tires, apparel, books, housewares, office supplies, whatever - every retailer is in the fashion business.

And that means that your customers are wanting what is new and fresh. You know; in fashion.

How to bring that Springtime State of Mind to your stores?
It's easier than you think. No additional costs. It can be quite energizing for your staff. And your shoppers!

Tweak your displays. Feature merchandise with lighter/brighter colors.
Change the soundtrack. Lighter/brighter works here as well.
Wash the windows! Wash away that winter grime. A little sparkle and shine goes a long way.
Check the lights. Make sure none of them are out. Get rid of any dark corners. And by all means, insure that all spotlights actually shine onto merchandise, not that spot on the floor where the display used to be....
Remember your staff. Maybe it's time for a Spring Fever treat for them.

Whatever it takes to make sure they, like your customers, have that Springtime State of Mind. It's contagious!

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That "Diamond of Doom"

The High Costs of Excess Inventory

As a retail owner, one of your primary goals is to boost profit margins—right?

You know that good inventory management is essential to producing top-notch profits.
You also know that bad inventory management can cause big problems with profit.

However, you may not know the actual cause-and-effect of bad inventory management.

Consider, then, the “Diamond of Doom.” The ROI uses this diagram to illustrate in simplest form the problems created by carrying too much inventory. (And this diamond is definitely NOT a "girl's best friend"!)

See it for yourself, and read more about the high costs of excess inventory, all free in The ROI's Library for Owners.

"Diamond of Doom"

Why not focus on your BEST customer?

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