Perspectives

From The Co-Founders

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Strategic insights and commentary from The ROI Co-Founders, Pat Johnson and Dick Outcalt
Outcalt & Johnson: Retail Strategists LLC; Retail Turnaround Experts

Answers Are Scarce; Questions Aren't!

Being the owner of a business always has pluses and minuses. Usually the pluses outnumber the minuses. But maybe not so much right now.

If you feel that way, you've got a lot of company. Ugh! But hang on; maybe we have a perspective that you'll find useful and timely. It's called "Misery loves company!"

First, consider where we are. Early July, just past a nice Fourth of July Holiday weekend. The summer and early fall look promising, both for getting "back to normal" and for some leisure hours in the hammock. Nice, eh?

But there are those dark clouds out there. 

What do they mean? Here's our take on that. Each dark cloud is unique and a tough question only owners can answer. Aren't you asking yourself questions like these? 

  • "I sense that this inflation warning may become a reality. What will that mean for my operation? Will our customers accept higher prices? Will our competitors also raise their prices? And when will this inflation issue hit us? And how hard? And for how long?"
     
  • "Everywhere I turn I see and hear talk of employees demanding and getting raises, often big ones In fact, we've recently lost some people who jumped to other jobs strictly for more pay. Whoa. Was that an alarm bell going off?"
     
  • "Our buyer(s) have always gone to trade shows this time of year. They're asking me, 'What about this year? Travel expenses are way up and sourcing merchandise online seems to be working quite well. But at market we can see so much more. And negotiate face-to-face. Well, what should we do?'"
     
  • "We've put a ton of money into upgrading our technology in recent years (and months!) It seems like we never catch up to the advancements. But, what's worse is the fact that so much of this technology spews out reams of data and not really that much useful information. It's maddening. Have the nerds who built this stuff ever been actual retailers? And now, what do I do with this bid for another damn upgrade?!"

"Look, I'm the owner. Everybody believes that I'll have the answers to all these and other questions."

  • Hmm. Don't they realize that this July has more difficult imponderables than any time in memory?" 

    "OK, well, that's why I'm supposed to get 'the big bucks,' right?"

    "Heck. That money just went for the rent increases!"

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  • Owners: Has Your Renaissance Begun?

    This is, after all, The Retail OWNERS Institute. We long have specialized in alerting, coaxing, and applauding retail owners worldwide. 

    Today's message is a major heads-up. 

    Keeping pace with the relentless changes in retailing has never been easy. Retailers know that constant adjustments are demanded. 

    Then, the three pandemics of 2020 happened: COVID; the economic meltdown; the social unrest.  And life changed modestly or enormously for almost everyone, including owners of retail businesses.     

  • COVID-19 thumbs/MasterChart3v2.png

    Too Sophisticated for "Small Retailers?" Nope!

    Turning "Big Picture" Thinking into a Strategic Inventory Buying 

    About a year ago, as the pandemics were beginning to hit their stride, we introduced a framework for retailers to "rethink your merchandise mix." 

    As depicted in the chart above, we cautioned that once the lockdown was over, as customers resumed shopping, retailers should be prepared for (1) reduced sales totals overall; (2) significantly re-balanced merchandise mixes, initially dominated by "basics/never-outs."

    Further, we anticipated that the merchandise mix would continue to change as we re-emerge from the effects of the pandemics. And we urged retailers to take this overall construct and adapt it to their own situation; to develop their own customized strategic response.* 

    Now, one year later, here's how this can become "news you can use" to quickly produce your Big Picture buying plan. Especially in the spring of 2021, some practical answers to "What to buy?" , "How much?" and "When?" are likely to be very welcome. 

  • "There's HOW much to know about retailing?"

    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!
     

  • grfx-Lib4Owners/4WaysToGrow.png

    Say "Yes!" to Growth? Maybe...

    As we emerge from the pandemics, many retailers are eager to grow. (How's that for an understatement?!)

    • For some, that simply means having a better year than 2019 (because 2020 was such a disaster), and they relish having survived.
    • Others are looking to expand by adding locations, whether by acquisition of existing stores, or taking advantage of vacated retail sites. 
    • Still others are focused on expanding their newly-established e-commerce capabilities. 
    • And, for some, still other imaginative ways.

    Trade shows are opening up with great success and eager buyers. Landlords are eager to fill vacancies, and in many instances, to cut deals. Vendors are eager to quit thinking about supply chain problems and start selling their merchandise, especially at trade shows. Plus, the continued growth and expansion of online wholesale marketplaces makes far more product available to retailers. 

    Then there is the access to capital. Lots of money is floating around out there

    All in all, it creates an environment of exuberance. "Seize the opportunity" is the rallying cry. Indeed, for some retailers, FOMO – that Fear Of Missing Out – is pushing them to make some major decisions. 

  • When You CAN Re-Open Stores...SHOULD You?!

    Retailing is so great. Every retailer is an optimist, a people-person, and a bold risk taker. (We know; we were one.) Every retailer wants to get their stores re-opened, and their staff people re-employed. 

    Granted, there are many arguments, pro and con, about "Re-Opening the Economy." And in a number of communities in the U.S. and elsewhere, some re-opening of stores and restaurants is occurring. ​​

  • Get Ready. Get Set. And...Re-Set (with Insights)

    For retailers, the Fog of Uncertainty that began in April 2020 around the pandemics keeps coming back. Just when it appeared that we were ready to "get back to life" if not "back to normal," the Delta variant has surged. 

    This has created more uncertainty. How willing are your customers to actually go out and shop? Even more important (to you): how willing are YOUR customers to shop with YOU?

    So, here's an idea: Why not ask them? Really. Send them a short questionnaire.*



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