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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.
Moreover, given how rising costs are affecting consumers, your actual sales may not be matching your projections for this year. It can be a dismal picture, particularly for those focused only on their profit and loss statement. What's the key for weathering economic downturns? First, don't let the headlines overtake the reality. That is, ominous news always gets more visibility than good news. A steady diet of bad news – or frequent recitation of factors beyond any one person's control – can wear down the most optimistic of us. But the real key is remembering this truism: In a down time, whether just your business or the economy as a whole, when you must choose between profits and cash, choose cash. Remember that; cash is king. As you know, for retailers, their cash is tied up in their inventory more than anything else. And, compared to all the other forces that are impacting their business – sales, labor costs, operating expenses, rents, etc – your inventory is actually something you can manage.
What else to focus on in these uncertain times? Nurturing your entire business network, particularly those you really want to continue to do business with.
But, remember: controlling your cash flow is the best way to get through this period of uncertainty.
Let's assume your stores have been closed for weeks now.
We recognize how conscientious you are. So, after paying what you can to your employees (and yourself), the next most-worrisome dilemma is your rent.
As you likely have discovered, a common choice for many landlords is to offer to defer your payments. But that means taking on more debt, as those payments are only being postponed to a later point in time. You need a better solution than that.
As Amazon Prime Day approaches – it is June 21 and 22 this year, the earliest ever for this 48-hour promotional event – retailers from all segments are wondering (or being asked): "So, how do you compete with Amazon?" Our response? You don't, at least not directly. Yet independent retailers do have many strategic advantages over Amazon. But you must recognize them, and enhance them at every opportunity. Here are some ideas that you may want to consider.
As Amazon's second two-day Prime Day of the year approaches – this one is October 8 and 9 – retailers from all segments are wondering (or being asked): "So, how do you compete with Amazon?"
Our response? You don't, at least not directly. Not on their turf.
Look, independent retailers do have many strategic advantages over Amazon. Your challenge – and opportunity – is to recognize them, and enhance them at every opportunity. Here are some ideas that you may want to consider to allow you to compete on your terms.
No more attempts to be all things to all people. Instead, focus on the portion of your market – and the customers – that are most profitable for your operation. (Go here for more about that.)
Remember that life stages (presence and ages of children in the household) drive buying decisions. Shoppers from which lifestage are most profitable for your stores?
Ahh, springtime! A time for new beginnings, fresh starts. Spring also is a time for "Spring Cleaning" – that time of year to spruce up, clean up, fix up. Sigh! Another chore. This year, here's how to break out of that another-to-do-task rut. It starts by seeing your stores the way your shoppers see them. Then, with that awareness, the spruce up, clean up, fix up tasks can actually focus on attracting and appealing to your very best customers. And we have the (free!) tool to make all this happen.
Remember thinking that Amazon was the most disruptive force to happen to retailing? (Well, at least since Walmart was the most disruptive....) However, the coronavirus pandemic eclipses them all. No matter where you live or do business, it is not whether, just when, COVID-19 will impact your life. Disruption with a capital D!
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