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From the Co-Founders of The Retail Owners Institute.Tips | Tactics | Insights on the Business of Retailing.
The so-called "Tariff War" that's in the headlines these days seems to most of the public to be a yawner, a distant spitting contest.
But to us, it seems much closer to home.
We're in the business of helping retailers and, when we can, providing a heads up when we see trends that may be impactful. The current trade disputes between the United States and most major countries in the world is one of those times. Retailers need a heads up.
First of all, every increase in costs is eventually paid for by consumers, e.g., your customers. It's an undeniable fact of economic life: costs are passed on.
So, when the Trump Administration announced on June 15 it will issue tariffs on an additional $50 billion of Chinese imports, the response from the retail community was prompt. It can be generally summarized in one word: "Yikes!"
Matthew Shay, President and CEO, National Retail Federation:
“Tariffs are taxes on American consumers, plain and simple. These tariffs won’t reduce or eliminate China’s abusive trade practices, but they will strain the budgets of working families by raising consumer prices."
Rick Helfenbein, President and CEO, American Apparel & Footwear Association:
"We remain deeply concerned. Any new tariffs present an immense burden for the American people. There are grave consequences to the use of tariffs. Congress needs to step in now to end this dangerous obsession. Tariffs are nothing but a hidden, regressive tax, plain and simple."
Michael Petricone, Senior Vice-President, Government & Regulatory Affairs, Consumer Technology Association:
"Tariffs go against the interest of the American people. The economy will respond to the president's tariff agenda by increasing the cost of goods that people use every day, harming the U.S. economy and sinking the stock market."
Here's one micro-example substantiating these concerns: earlier this year, 20% tariffs were applied to "laundry equipment." And today, prices for washers and dryers have increased 17%. ("Trickle down tariffs", anybody?)
The current focus is United States versus China. Grim as that is, the big picture of U.S. tariffs versus the rest of the world – Canada, Mexico, the U.K., European Union, etc – is truly ominous. Remember, the prices retailers pay will go up. And those added costs must be covered somehow.
Everybody's families will be paying more. Or having to cut spending in some areas (your stores?) when faced with higher prices elsewhere. Today, it may be a far-off spitting contest. But tomorrow or soon after, it's going to impact our customers, and thereby, impact retailers.
You've heard of Comic-Con, right? It began in 1970 in San Diego to celebrate pop culture, from comic books to films and science fiction/fantasy literature. It has since grown into an extravaganza attracting 130,000+ costumed fans, industry professionals, Hollywood types, vendors and spectators.
Or, as Patricia Vekich Waldron, the CEO of Vision First observed*, "After nearly 50 years, Comic-Con has turned in many ways into the ultimate pop-up store."
And she challenges retailers, developers and brands to "pay attention to how Comic-Con continues to captivate and delight its fans."
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.
You’ve heard about the robust sales numbers on Thanksgiving Day and Black Friday, right? Now ICSC – the International Council of Shopping Centers – has sponsored a research survey about Thanksgiving Day and Black Friday to delve into them a bit more.
And what they found sure surprised us. For example, who were the biggest fans of physical retail and shopping centers? Millennials. Yep, those "digital natives", folks ages 18 – 36 chose to make their purchases from physical retailers (or through websites operated by physical retailers) rather than shopping pure online retailers such as Amazon.
You may be one of the many retail owners who share our vision of "Making money. Having fun. Doing good!"
But today, that trifecta is even more dependent on that first step: your business making money!
When it's not making money, there is very little fun to be had.
And the "Doing Good" part can sure be constrained.
How important is it to have - and brag about - a “free and easy” return policy?
That is an issue that vexes many retailers.
Processing and handling returns can be costly and time-consuming.
But, there also are "costs" associated with more restrictive return policies.
A two-year study comparing return policies of two similar retailers offers some new insights.
"Retirement" looming? Ready to reduce hassles and worries, but not really ready for a rocking chair? Here’s a variation on a “mixed use development” that could offer a great transition plan to retailers. We just heard about a new kind of “mixed-use development” (you know, retail shops on the ground floor, residences up above.) Some of the new townhouses being sold in a planned resort community come with a first-floor retail shop. The owner of the townhouse owns the shop space as well!
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!"