The playing field has shifted dramatically under the feet of retailers.
Merchandise orders placed months ago are now proving to be "too much stuff that consumers no longer want so much of," as was reported rather colloquially just 3 days ago. All this was summed up this way: "Retailers with slower inventory turns might find current conditions especially difficult to navigate." *
Now, look at the chart at the top of the page. Without being dramatic, it may be a lifesaver for your business this year.
Let's explain. It's an incredible quick reference guide to your sales @retail compared to your inventory @retail.
So, what to do right now? Focus everything on this retail-stock-to-sales ratio comparison pointed out above. If you have more than enough inventory on hand in one or more categories, here are some ideas of what you might do.
Seize the "Special Sales" opportunities
Buy less, more frequently
Buy more of your "basic merchandise" and less of the discretionary items.
Managing and controlling the inventory is the #1 responsibility of the owners of retail businesses. It is both an art and a science, and distinguishes retailing from all other kinds of businesses.
But, it also is what can soak up all your cash. And in these uncertain economic times, when the drumbeat of warnings of a recession could become a self-fulfilling prophecy, your operation needs to be as lean and nimble as possible.
Like a game of musical chairs, when the music stops, you need to be able to move quickly to find a chair.
* "Stores Have an Inventory Problem", Jinjoo Lee, The Wall Street Journal, May 20, 2022.
Is 2020 continuing to wear you down? No surprise. And no shame in that!
Retailers are among the most optimistic folks we know. But the relentlessness of the disruptions and in some cases tragedies of the three pandemics – the virus, the economic meltdown, and the civil unrest – followed by the wildfires in the West and the hurricanes in the Southeast, now compounded by the uncertainties of national election. Oh, and then there's the impending flu season. And... And...
It IS a lot. And it feels as if there is no relief in sight. But maybe there is.
A few years ago, during a planning session in our office, we drew a quick diagram on a whiteboard. It showed three shapes.
Out of all of the potential things we could do, which ones truly warrant our time, energy, and resources?
That picture keeps coming to mind as the COVID-19 shutdown orders on retailers of "non-essential" goods are starting to be lifted.
Here's a post-pandemic strategy that should not be missed: higher margins!
Not the entire store, of course; you must be a merchant here.
But think about it: many shoppers have increased savings, reduced debt, or gotten their job back. Maybe all three.
And after months of being at home, and spending on home improvement and groceries, many shoppers have pent-up demand to spend on items they have had to postpone, like for themselves. Whether that would be in a restaurant or in a specialty store, shoppers are more willing and able to spend. (And some even feel entitled to spend.)
Ready to add a bit more fun to your store, AND generate incremental sales? Consider this friendly Tortoise, a "tap to pay mobile smart store."
Here's how it works. You choose items to sell that can be boxed, and held at room temperature. Maybe it's a dozen cookies. Or a book. Coffee mugs? Mobile phone rechargers. Whatever makes sense for your store. (And apparently, higher priced goods do especially well.)
Place the boxes into a Tortoise container that has colorful graphics of what's inside and the price per box, and send the Tortoise on its way.
As more stores are able to reopen, and more shoppers are willing to emerge, what will they encounter?
A little chaotic, isn't it?
You likely have experienced some of these dilemmas from the customer side. So you know how annoying or unsatisfactory it can be.
But you also are living that dilemma from the retailer's side.
Still less than $1 a day! 👀