Undoubtedly you'll agree with this. We read and hear a lot in the business press, but we treat 100% of it rather skeptically.
And so it is with articles and commentary about this coming Holiday Season, specifically about retailers' inventory and margins.
Nevertheless, there is considerable good news being trumpeted. Most recently, this feature article in the Wall Street Journal: "Retailers Hone Inventory for Holidays" *
That was the headline in a recent business page editorial*. And the writer was able to cite chapter and verse of all-too-prevalent lousy shopping experiences for customers.
As noted by a Wharton School professor, "retailers frequently reduce headcount because 'you immediately see the savings in payroll but you don't necessarily know what damage that does to the top line.'" Of course, the retailers that professor is referencing are the Big Guys who have to satisfy their investors every quarter.
As independent retailers, you have advantages that are unavailable to the Big Guys.
We hear it over and over. "Good business citizenship" matters to shoppers. Especially for retailers, who are quasi-public figures in their communities. (AND in a goldfish bowl.)
Customers vote with their feet, their wallets, and their hearts, and increasingly choose those retailers who "do the right thing", whether it's how they source product, hire and pay employees, reduce environmental impacts, etc.
There are things that independent retailers do day in and day out, without perhaps even realizing how special they are!
Most retailers we know are "aw shucks" type people. It's charming, but, especially in today's world, your leadership can be a competitive edge! So, why keep it a secret?
Many of you are using social media to promote sales events, new product arrivals, etc. Why stop there?
Social media – and your website – is the perfect place to share examples of the values that drive your business. And face it; those values may be too scarce today. They need to be featured!
As we look out at the second half of 2023, we're actually quite optimistic for independent retailers worldwide. No, really!
The statistics haven't yet borne out what we are "seeing," but just wait a bit.
To begin our justification, let's look at the really Big Picture. Generally, the Covid pandemic has been wrestled down. Likewise, inflationary prices seem to no longer be a threat. The worrisome political scene has resumed its traditional state of boredom, and the major concern now is something we can't do much about: each day's weather.
So, looking at the Big Picture, we see the general population for the second half of the year to be quite serene, even optimistic. And that bodes very well for shoppers' confidence!
In today's financial climate, how in the world can independent retailers (that's the 92% that are not publicly traded) get financing?
In most cases banks are not lending (even as they run ads proclaiming their "support for small businesses.") Landlords aren't more lenient, nor are many vendors. Even mothers-in-law are asking tougher questions!
So, what should a retail owner do? Just give up on the idea of getting financing? Or, worse, accept the cash offers from vendors, payment processors, or POS providers who take their "payments" right off the top of your daily sales?
Well, it is maddening, but The ROI recommends an easy exercise that may be of great help.
Think about the prominent characteristics of today's shopping experience:
Throughout the pandemic, millions of shoppers – including the older Baby Boomers – discovered the benefits of online shopping. Then, as brick-n-mortar retailers scrambled to survive, the increased availability of delivery, curbside pickup, BOPIS (Buy Online, Pickup In Store) and BORIS (Buy Online, Return In Store) was well received by a broad swath of consumers.
We see that this has brought heightened awareness of two different retail strategies: Convenience Retailing versus Destination Retailing.
And here's the deal: retailers now must choose either one or the other of those two strategies. You cannot have one foot on the dock and one foot in the boat. You DO have to decide!
We're sure you'll agree. Misinformation can be very harmful. Retailers surely don't need more harmful anythings!
Just last week, we came across the proverbial straw that broke the camel's back. It was a post on the Intuit Quickbooks site*, titled "Inventory Turnover Ratio." And the explanatory article was accompanied by an "Inventory Turnover Calculator."
What do we take exception to? The misleading and/or incorrect information it provides. For example, their "Inventory turnover calculator" requires two entries.
We must take exception. "Total costs involved in selling your products" is NOT the same as Cost of Goods Sold. Nor do they specify that it should be for a 12-month period of time.
We must take exception. What they surely meant to say is inventory @cost.
Still less than $1 a day! 👀