From the Co-Founders of The Retail Owners Institute.Tips | Tactics | Insights on the Business of Retailing.
Running retail businesses these days is a lot like teaching a teenager how to drive. "Look son; keep your darn eyes on the road!"
Predictions by the "experts" tell us that the economies of the world are remarkably strong right now. And given that, retail sales this year are expected to be up between 4% and 5%. Maybe the best year in a generation!
It's a time when independent retailers could – and should! – "Go for the gold!"
All they have to do is keep their eyes on the road.
Retailers are generally very talented, conscientious and well-meaning. But they're also human. And that can cause problems.
Especially in an environment like we have today, the darn distractions keep coming.
Amazon's growth imperative is insatiable and unrelenting
Disneyland-on-the-Potomac is a daily consuming soap opera
Low unemployment makes H.R. work a never-ending struggle
A new tax law will affect what? Who? And how?
As America's standing in the world erodes, how will the next generation be affected?
And wow! In early February, the stock market took a nose dive!
On and on; the distractions do not subside.
So what is a smart retailer to do?
"Look son; I know she's cute. But keep your eyes on the road!!"
For retailers, that "road" to keep an eye on is consumer confidence.
Just watch it carefully. And, especially with your own best customers:
Have IPTs (items per transaction) stayed the same, or dropped?
Have margins started to erode for no apparent reason?
Have you seen a greater reluctance to buy top-of-the-line merchandise?
These kinds of indicators are "the road." All the distractions may be interesting; but they are not significant!
"Son, don't be like some other kids and be distracted.
"Lots of people will be relying on your ability to always watch the road."
After watching consumers being riveted on chaotic national affairs for almost a year, we now have put a label on it: “Distracted Customer Syndrome”. And it seems, sadly, to be unrelenting. It started during the 2016 Presidential election campaign. Nothing about that was typical. It made for good television theater, and the networks certainly obliged.
And, we ascribed the sluggish retail sales in the fall to demands of this new American spectator sport.
Every minute, some shoppers in your market are checking the weather forecast on their smart phone.
But here's the deal: Immediately, that inquiry is being captured by The Weather Company, which now turns this mass of Big Data into usable information (that it sells, of course.) And here's what that means for those smart phone users:
We are living in unsettling times of rapid change, magnified by news cycle drama.
Maybe it’s the latest natural disasters or the uncertainty of international conflicts. Or closer to home, aging parents, unexpected expenses, or just trying to open a new bottle of aspirin, life can seem more out of control than normal.
This anxiety and frustration can be unsettling to many folks, some of whom undoubtedly are your customers.
And frankly, as the frustrations grow of having less control, some people will seek more control wherever they can.
Where would that be? That’s right. Your stores. You and your staff must be ready.
Quick: Who are your major competitors? Amazon? Target? Wal-Mart? Other specialty store retailers in your market?
Yes, all those and more.
But, what about the "stealth competitors" affecting every retailer – whether you are selling apparel, furniture, motorcycles, books, smart phones, or whatever? Stealth competitors; they are out there.
These competitors are hiding in plain sight. And, in our view, they significantly impact – and reduce – retail sales by skimming off discretionary spending.
The National Retail Federation sponsored a survey in early May of retail small business owners across the country (those that meet the SBA definitions for employee size and revenue.) Contrary to the doom-and-gloom of the "Retail Armageddon" stories, this survey confirmed that retail owners are optimistic and looking to expand.
Few believe their business will be in worse shape in 12 months;
Nearly half expect revenues to increase;
Many have goals for expansion or implementation of new technologies.
What especially intrigued us, however, is this new feature Boxed has announced: group orders.
Customers can now do a group order online by sending links to others to collaborate on an order.
Pat Johnson and Dick Outcalt, The Co-Founders of The Retail Owners Institute®, have been called "The Zen masters of retail finance!" Since 1999, they have been assembling their proprietary content into a unique self-help website. The Retail Owners Institute is an unmatched resource that assists retailers worldwide with basic financial training, assistance and easy-to-use tools. Their engaging and empowering how-to resources about the financial levers in retailing are informative, fun(!), and retailer-friendly. Their promise: "Everyone will 'get it'!" Pat and Dick are recognized experts in strategic retailing. Working only as a team – Outcalt & Johnson: Retail Strategists, LLC – they have been consulting, publishing, and speaking professionally throughout North America since 1990. They focus exclusively on retail, or wherever retail is involved. They work with CEOs, CFOs, boards and owners of retail operations, as well as manufacturers or wholesalers expanding into retail. And they also are Retail Turnaround Experts.
Since 1999, empowering retailers and store owners to "Turn on your financial headlights!"