FIVE STAGES OF MERCHANDISE MIX MANAGEMENT STAGE 1: WHERE YOU WERE PRE-COVID 19 STAGE 2: RE-OPENING MIX
STAGE 3: THE NEXT PHASE
STAGE 4: “WHEW! NOW WE CAN GET BACK TO NORMAL!”
STAGE 5: THE NEW NORMAL?
AND NOW, YOUR BIG PICTURE THINKING Experienced retailers know this instinctively. We offer these charts (which are not based on any specific operation or numbers, or timeline) as an example of how you might quickly bring other folks up to speed with the changes you must be making. And we hope it might inspire you to make your own "Big Picture" charts. Remember, no specific numbers, no definite timetables. Just Big Picture ideas: What might your merchandise mix look like at each of these five stages? Nobody knows your business better than you. Get cracking!!
Just this morning we saw yet another article speculating about the staying power of online shopping, in this instance, grocery shopping.
Of course, it's not just media pundits who are looking for answers to this question about online versus in-store shopping. Retailers are living with this issue, and they have to make decisions.
Alas, there is really no way to avoid discussing COVID-19, the coronavirus that began in China last month, and now continues to spread throughout the world. No matter whether or when it is officially declared a "pandemic," the uncertainty and angst that it is generating have troubling implications for retailers.
Yes, the shoppers WILL be returning. But boy, have they learned a lot during these pandemic times. They are far more comfortable with online shopping, and in many cases, eager to continue that. And the convenience of "contactless" features like curbside pickup and BOPIS (Buy Online, Pickup In Store) are welcomed. In fact, an extensive survey from McKinsey & Company* provides considerable detail about the newly-learned online shopping behaviors of customers, and their expectations of continuing to use these new-found skills.
Particular changes with presumed staying power:
But hold it. Wait just a minute. Our countervailing view is that the "homebody economy" will wear thin. And while customers do care even more about basics and value, especially when it comes to Holiday shopping, they will want "special."
That's a sign of the times, isn't it? While retailers are more accustomed than most folks to cope with change, 2020's unrelenting flexibility tests have been a challenge. Forget about five years. Retailers have to be ready for the next five months! It's back-to-school and then Holiday. The only certainty about the next five months is that they will probably feel like the past five months. Yet you still must run a retail business. And that means you still must buy and sell merchandise. The opportunities – and the pressures – are mounting.
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?"
Each year at this time, our thoughts turn to turkeys. No, not the ones that will adorn many dining tables on Thursday. But the "turkeys" lurking amidst your inventory. You know; non-selling, distressed, slow-moving, old, unappealing leftovers among your merchandise. But this year, frankly, our worries extend beyond the turkeys. Here are some of the reasons why.
As a result, in this environment, consumers are scaling back their discretionary purchases, and/or choosing to spend on travel, dining out, or other experiences versus retail merchandise. Not an upbeat prospect for retailers, is it?
Still less than $1 a day! 👀
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