PERSPECTIVES

Another real challenge of 2021 is rearing its head: Whatever you used to do in terms of managing your staff likely will not work this year. 

• Not only are the owners exhausted from dealing with 2020, but so too are your employees.
• What took the greatest toll? All the uncertainty for everybody.
• Plus, many folks are revisiting their priorities: what is it really worth to them to work in retail? Especially given other choices they have become aware of.

In the aftermath of the pandemics, lockdowns, stimulus payments, low unemployment, and minimum wage increases, finding and keeping good employees is even more daunting for independent retailers.

If 2020 was the year of pandemic disruption and scramble-to-survive mode for retailers, 2021 may be the year of relentless Retail Is Detail reminders.

Many of you may well have benefitted from one or more rounds of PPP loans and their potential "forgiveness." Now comes the reminders that you must seek forgiveness. In writing. From the bank that  loaned you the funds. And there are some time deadlines involved. Yikes.

Oh, and total forgiveness may not be forthcoming. It depends. (See below for these guides* and disclaimers from the SBA.)

Then there are the so-called "bookkeeping details" surrounding all this.

A few years ago we were on a PBS news show about retailing's ups and downs. Several months later, one of us ran into a teacher of one of our kids. That person excitedly mentioned having seen us on TV, saying "I didn't know you knew so much about retailing." (Yep, known just as someone's parent, right?)

But then this very well-educated person said the key thing: "I never knew there was so much to be known about retailing!"

Well, that incident happened a few years ago when retailing was perhaps more understandable, even more predictable. Alas, those days are history! Today, nothing in retailing is quite as understandable or as predictable as before. Or as manageable!
 

Many times during 2020 we spoke of "disruption with a capital D!"

And now, more than a third of the way through 2021, that Disruption with a capital D shows no signs of abating. Instead, it just keeps morphing (not unlike the Covid strains that keep emerging....) 

But the disruption that we see emerging is in the attitude,  deportment, and psyche of Millennials, and the many people who are now acting like Millennials. This is showing up in the attitude of shoppers as well as employees. 
 

• "Consumer confidence rose sharply for a second straight month, hitting the highest level since the pandemic began," according to the Conference Board Consumer Confidence Index. 
   
• "Economists believe that the rising consumer confidence will bolster overall economic growth as consumers, who account for 70% of economic activity, step up their spending as lockdown restrictions are eased." *

This is welcome news for many retailers, as consumer confidence has been a key leading indicator of retail sales.

However, a note of caution: retail sales are not the sole component of consumer spending.

• "As more businesses and cities reopen, consumers will have even more places to spend the savings they've accumulated during the pandemic." **

We often caution that many vendors are so much better trained at selling than retailers are trained at buying. In their eagerness to grow sales, and the associated promise of thereby growing profits, it is all too easy for retailers to become overbought. Instead of higher profits, they can find themselves in a cash flow crunch.

And that was in Before Times, before the pandemics. Throughout 2020 and continuing now, vendors and retailers alike have increased their online capabilities. Ordering online brought new challenges to buyers and sales reps, but also saved time and improved access. 

We have applauded these advances in technology, but...

Here's a post-pandemic strategy that should not be missed: higher margins! 

Not the entire store, of course; you must be a merchant here. 

But think about it: many shoppers have increased savings, reduced debt, or gotten their job back. Maybe all three.

And after months of being at home, and spending on home improvement and groceries, many shoppers have pent-up demand to spend on items they have had to postpone, like for themselves. Whether that would be in a restaurant or in a specialty store, shoppers are more willing and able to spend. (And some even feel entitled to spend.)

There's a lot of optimism in the air these days. 

Covid-19 lockdown restrictions are being eased. More people are becoming vaccinated. Upbeat economic news is reported. Unemployment figures are improving. Restaurants are preparing for diners to return. And of course, given that we are now starting to compare sales results to the meltdowns of 2020, dramatic percentage growth is being reported and forecast for the balance of the year.

These positive and optimistic news reports all are very welcome. Retailers are eager to see customers return. 

But what should retailers expect? To brace yourself for the  myriad changes.