PERSPECTIVES

From The Co-Founders

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Tips, Tactics & Strategic Insights and Commentary
from The ROI Co-Founders, Pat Johnson and Dick Outcalt
Outcalt & Johnson: Retail Strategists LLC; Retail Turnaround Experts

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It's not just the clocks that changed

"Retail is a mirror of society."

Yes, Daylight Savings began a couple weeks ago. But it's not just the time on the clocks that changed; the times themselves have substantially changed. 

Followers of The ROI has heard us assert many times that "Retail is a mirror of society." As we reflect on the first quarter of 2022, we are struck by how much has changed in just those three months. And retailers must adapt – yes, again! – to this rapidly changing environment.

Think about it. Consider the assumptions you made just a few months ago, in late December and early January about 2022. 
  • The Omicron variant was surging, Canada was re-instating border-crossing restrictions, protests on mask mandates were beginning, and supply chain issues were still top of mind. Economists, politicians and pundits were talking about inflation; the stock market fell in anticipation of interest rate increases. Unemployment was down, wages were increasing, shoppers were spending. 

And then, an international crisis intervened, with Russia's February invasion of Ukraine. The world's attention shifted to that crisis, and the global economic sands shifted...once again. 

  • Wide-ranging economic sanctions were imposed on Russia by the Western alliance. Fuel prices increased, with ripple effects on other prices (airlines, groceries, etc.) Millions of refugees from Ukraine are being displaced. Inflation persists, and consumers began to show some price resistance. 

Mentally, it is hard to escape the impact, because the press, the TV, the internet is swamping all of us with the grim reality of this war in Ukraine. So sad. 

The first quarter is now behind us. The question is, how do we best manage the second, third and fourth quarters of 2022?

Carefully.

This may sound like "old school" advice, but don't dismiss it: The best way to see that"retailing is a mirror of society" is up close and personal. Right now, we believe that it is more critical for all senior management of retail operations to spend time on the selling floor. Listening, not talking. 

  • What's the first thing Howard Schultz did when he returned as CEO of Starbucks? Go sit with the baristas!

So, now's the time. Get up close and personal. Be on the floor. Talk to customers and to your staff. Find out in real time, rather than waiting for reports after the fact.

  • Are your customers willing and able to spend as you anticipated?
  • Are your suppliers able to deliver on time?
  • Have some of your customers left your area, because of new "work from home" opportunities (and preferences)?
  • Are there newcomers to your market area who have left more expensive cities?
  • Should your merchandise mix be adjusted to better match this changing customer mix?
  • How are you coming with "seamlessly" incorporating e-commerce into your brick-and-mortar operation?

Be determined, and stay flexible. 

Related Articles

  • Dealing with Your Landlord? This Is Better Than Begging!

    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.

    • How best to get some immediate relief from each month's lease payment?
    • And you wonder, what would be the best way to negotiate with your landlord?

    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.

  • The Opportunities of a Crisis: Don't Miss 'Em!

    Each of us, our households, businesses and communities are in different stages of shutdown due to the coronavirus.

    While we cannot speak to when this will end, we do have some ideas for dealing with the "fog of uncertainty" that hangs over us all.

  • COVID-19 thumbs/MasterChart3v2.png

    The New Dynamics of Merchandise Mix

    The Retail Owners Institute® has developed a retail strategy for "Inventory Management Going Forward." 

    As we often do, it was recapped as an unassuming chart (see above) identifying the Five Stages of Merchandise Mix Management, from "Before COVID-19" to the "New Normal?"

  • This is Disruption with a Capital D!

    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!

  • Retailer's 3-in-1 Cash Flow Calculator

    YOUR GOAL: QUICKLY GET TO A FIRST DRAFT.
    Face it. Sales are dropping. By how much? For how long? Nobody knows for sure.

    But, you can make some assumptions, some educated guesses. Put those into the 3-in-1 Cash Flow Calculator. 

    • Immediately see what that would mean for profits. 
    • And your buying plan. 
    • And most of all, your cash flow! ​

    These totally volatile times cause a lot of opinions and fears to be swirling around. Seeing "what if...?" can be very helpful. 

    ​All in just minutes. On your own. ​

  • COVID-19 thumbs/Wondering.png

    Not Just WHETHER to Re-Open. WHAT to Re-Open?

    Some thoughts from Nordstrom leadership that are spot on!

    • “We started this company from scratch, so what would we want to be, knowing what we know now? It’s clear we can expect a new normal. And it's up to us to decide what that will look like. We're each being presented with the unique opportunity to create a future worth envisioning.”

    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?



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