As we follow economic indicators that particularly affect retailers, our primary focus always is consumer confidence. And the reports coming out this week give us pause.
The highly transmissible Delta variant and the vaccine hesitancy of many have changed the momentum. Covid fatigue is back. This affects consumers.
And with it, more challenges for retailers. Decisions and policies may be needed regarding vaccinations, both for your staff and your shoppers. Meanwhile, consumers are likely taking another pause. Will schools reopen? Will offices reopen?
So, what's a retailer to do? What you always do: deal with it!
The advantage that independent retailers have is that you can move and adjust very quickly, being responsive to your local market. The Big Guys can't do this as well as you.
For instance, as you and your buyers review and adjust your buying plans, here are some reminders to keep in mind:
Most important, review our "Rethinking Your Merchandise Mix" (see chart above)
As you know, retailing never has been a "set it and forget it" operation. Instead, it demands your constant attention and especially, your resilience. But it does reward those who are steadfast about maintaining their flexibility.
One final thought: Be prepared to bounce back in another direction.
As Curtin observed, "In the months ahead, it is likely that consumers will again voice more reasonable expectations, and with control of the Delta variant, shift toward outright optimism."
* Preliminary Results for August 2021, Surveys of Consumers chief economist Richard Curtin, University of Michigan.
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.
Spring is in the air. More places are lifting Covid restrictions. Daylight savings time starts this coming Sunday, extending the evening hours.
And, for the first time in years, we can expect to celebrate Easter, Mother's Day, Father's Day, graduations, weddings with few restrictions. All promise a renewed air of celebration!
There is widespread anticipation that consumer spending will be very strong. But...spending on what? Before you place all those merchandise orders, consider this.
Some thoughts from Nordstrom leadership that are spot on!
That's what Nordstrom President and Chief Brand Officer Pete Nordstrom told Puget Sound Business Journal columnist Patti Payne on April 23, 2020.
And what he succinctly stated is exactly the challenge – and opportunity – that is confronting all retail owners.
In order to answer whether you should re-open once you can, you first must be very confident in WHAT kind of retail operation you will be re-opening.
The only certainty of the aftermath of the pandemic is that everything will be different. Given that, what better time to re-imagine your business?
The constant challenge for retailers is to anticipate what their customers really want. And this year, there seem to be plenty of choices available.
It is all part of the on-going challenge of retail; the art and craft of being a merchant.
Then there are the customers who are reacting to the constant drumbeat of news about supply chain issues, merchandise shortages, and looming price increases by starting their shopping early.
Adding to this stampede, some major chains were launching their Black Friday specials before Halloween!
Throughout the pandemics, many independent retailers successfully shed their "technology laggards" label, as they pivoted to embrace an array of digital tools.
Yet going forward, it is well to keep in mind what really matters to the customers. And it may not be more technology.
A recent survey* of more than 2,000 customers provides some interesting insights as to who shops where, why, when and how. It especially highlighted the differences between "large stores" and "smaller stores" (or as we view them, "specialty stores.")
Hmm. This suggests to us that shoppers essentially are treating large stores the same way they treat the internet:
Consider these front-page headlines and the accompanying chart (see above) from the June 6 Wall Street Journal* – "Surplus Inventory Piles Up", "Stores Are Stuck with the Wrong Items."
Look at it carefully, and think of your operation in comparison. How do your numbers compare? Are you as shocked as we are?
How did this happen?
Partly as responses to the unprecedented impacts of the pandemic.
Still less than $1 a day! 👀