PERSPECTIVES

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  "Bifurcation" – Maybe Your Strategy?

  For retailers there are two very strong trends happening now through the Holiday Season. And they are remarkably divergent. 

  • One that is getting a lot of publicity is how Target, WalMart, etc. are promoting their “Black Friday “ specials four weeks before Thanksgiving. 
    
    Sounds desperate to us, but it is a sign of the times. 
• 

  Which Shoppers Will Be the First to Emerge?

  The COVID-19 pandemic has certainly gained the respect of the general public. 

  Surveys continue to show that, while folks are eager to be able to resume moving about, they do not expect to resume their pre-pandemic discretionary shopping and dining activities anytime soon. They are awaiting effective treatments or, even better, a vaccine. 
  
  Main Street restauranteurs and retailers understand that, according to survey results reported April 27.* In fact, these owners anticipate it could  take another eight months – that is, most of the year – for consumer demand to reach the so-called "New Normal." 

• 

  When Up Is Down (Yes, we can explain)

  You've no doubt seen the headlines. "Retail sales slumped in December." 
  
  Sounds pretty grim, doesn't it? Did all those foreboding warnings of supply chain issues, inventory shortages, etcetera actually come true?

  • Keep in mind that the folks trumpeting those slumping sales results are comparing each month's retail sales to the previous month. Sure enough, on that basis it is true that retail sales in December were almost 2% less than they were in November.
     
  • However, if you examine the same numbers the way that retailers do– that is, comparing to the same month the prior year – we see a very different story.
• 

  Expecting judgment from computer forecasts? Really?

  "How are sales?" is essentially the international greeting between retailers.  And because of the seasonality of retail sales, most retailers will respond by explaining whether sales this month are up or down versus the same month last year, not just the previous month.  All this is well and fine in a normal year. But, since 2020, retailers have not been experiencing anything close to normal. And boy, does that show up in the 6-month retail sales trend charts that The ROI posts each month. In sector after sector, December, January & February sales versus the prior year are markedly different than the March-April-May results. In some cases, these are quite dramatic.  Your results are likely to be consistent with these patterns.

• 

  The Lingering Days of Summer

  Since Labor Day in the US is the first Monday in September, this year it happens as late as possible. Labor Day will not be celebrated until next Monday, September 7. 
  
  Most years, most folks would be perfectly happy to have August stretched out even longer. Ahh, those lazy, hazy, crazy days of summer, right?

  • Well, we DO have the "crazy" part down pretty well. And "hazy" rings true too, as the fog of uncertainty persists.
  • And now, imagine it: a Zoom Thanksgiving... OMG!

  And so, meanwhile, we regard Consumer Confidence as THE key indicator of consumer spending. Just last week, the Conference Board reported that Consumer confidence is at a six year low*. Ouch!
  
  But, was that a surprise to retailers? Not really. Most retailers are well along in coping with these challenges. 

• 

  Continuing Flexibility Test

  As we introduced previously, the New Normal for retailers is already here. It is a new "retail clock." 

  • "As the global efforts to "flatten the curve" of the coronavirus pandemic continue, there is another curve that is being flattened. That would be the seasonality of retail sales. 
    
    "And this may prove to be what really defines the New Normal for retailers. 
    
    "The customary peaks of retail spending have been flattened."

  Of course, it is not just retailers who have been affected; the shoppers also have been adapting. But whereas retailers think in terms of seasons (weeks and months), the shoppers are adjusting their patterns at the daily and weekly level.