Managing inventory – arguably the #1 responsibility of a retailer – has been beset by a host of new and sometimes daunting challenges since 2020.
The last few months of 2022 only made matters worse. As supply chain issues seemed to subside, foreboding talk of a recession dominated, dampening customer spending.
Many retailers are feeling a bit over-inventoried as a result. Similar to that sense of having a few added pounds after the holidays.
In other words, a situation that is crying out for perspective. And The ROI has you covered on that!
What is the definition of "value" for customers? Pretty straightforward, actually.
Wait. What? "Benefits received?" "Burdens endured?"
Turns out, the only single answer to "What is value?" is, "It depends."
Don't just roll your eyes. What constitutes value for your customers increasingly is a make-or-break part of retailing.
Consider this retailer, whose sales over the last 4 weeks are down 12% compared to last year.
Some retailers in this situation essentially freak out.
But others know to keep asking questions. Before they decide what to do next to fix lagging sales, they want to know "Why?"
So, here is one way to get to the numbers behind the numbers; to begin to know the "why" of your sales trends.
All it takes is tapping into the data that's already in your POS system, and putting together a little summary tally sheet. Here's one example.
We were struck by these comments from folks for whom "back-to-school" is more than a season. Look what a state superintendent of public instruction* had to say about the upcoming school year.
Lots of retailers can identify with those comments, don't you agree?
Or, these observations about the disruptions and uncertainties of the pandemic:
As the final third of the year approaches, there's a "new era" afoot. There is optimism in the air.
Yes! And it could catch a lot of folks by surprise.
One of the real killers of a retail business can be debt. But, how much is too much?
Debt can be quite stealthy as it grows.
Especially in these times of increasing interest rates, creeping expansion of debt can quickly snowball into a much larger problem.
From the Benchmark pages on The ROI site, we have selected four retail verticals whose Debt-to-Worth ratio shows a frightening situation. The technical term we would use is "spooky, real spooky."
(click on each chart to see all key ratios for that vertical)
A frequent recommendation for how to navigate the current economic uncertainty is to be more diligent about controlling expenses, and focus on profit. (You'll see; we challenge that below.)
Hmm. Concentrating on profits is easier said than done in today's environment, with cost increases proliferating under the umbrella of inflation.
Still less than $1 a day! 👀