Re-Inventing Retail

From the Co-Founders of The Retail Owners Institute.
Tips | Tactics | Insights on the Business of Retailing.

No Surprise Here: Optimistic Retailers Look to Expand Bookmark

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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.

When asked about expected changes this year, 36% of the owners mentioned "expand business' online presence", and 34% anticipate they will "expand into new product lines or categories."

No surprise, of course, that retailers are optimistic, and thinking about growth and expansion.

For retailers, it's not whether to grow; it's how!

And that leads to one of The ROI's Strategic Retailing concepts: the Four (Only!) Ways Retailers Grow, recapped in this chart:
Four (Only!) Ways That Retailers Grow

There are just two major variables that affect a retailer's growth and expansion: Customers and Merchandise Mix

Each of these two variables is further divided between what you have Now (e.g., "Present Customer Profiles", Present Merchandise Mix), and what would be New or different types of customers or merchandise mix.

And that means that there are, fundamentally, only four ways that your business can grow. It all depends on which combination of these variables you choose to pursue.

Now, consider the findings from the NRF survey.

Those retailers who expect to "expand their online presence" would be growing by "Market Development" (quadrant #3). Online shoppers are different from in-store shoppers, and/or are from different customer groups

Those retailers who expect to "expand into new product lines or categories" would be growing by "Concept or Merchandise Development" (quadrant #2.)

And in many instances, retailers who change and expand their merchandise mix actually end up in quadrant #4 – Diversification – because they are attracting different customers.


Why does it matter?

Well, Growth = Change = Stress. 

Even "good change" involves added stress. All of your resources – financial capital and, especially, human capital – will be impacted.

Knowing which way you intend to grow, or, when in the midst of a growth spurt, recognizing which variables are changing the most, gives you more opportunity to exercise leadership and apply controls.

You are better able to avoid surprises, and to manage the challenges associated with making changes. Go here on The ROI site for more details about this.

Meanwhile, keep that optimism!

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About The Co-Founders

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!"