As we emerge from the pandemics, many retailers are eager to grow. (How's that for an understatement?!)
Trade shows are opening up with great success and eager buyers. Landlords are eager to fill vacancies, and in many instances, to cut deals. Vendors are eager to quit thinking about supply chain problems and start selling their merchandise, especially at trade shows. Plus, the continued growth and expansion of online wholesale marketplaces makes far more product available to retailers.
Then there is the access to capital. Lots of money is floating around out there
All in all, it creates an environment of exuberance. "Seize the opportunity" is the rallying cry. Indeed, for some retailers, FOMO – that Fear Of Missing Out – is pushing them to make some major decisions.
Here is a three step process for retailers to get some Big Picture perspective on this.
That final question, of course, has to do with your tolerance for risk. No matter how much money someone will lend you (and there are many folks eager to extend credit right now) how much debt are you comfortable taking on? How much of your personal capital are you willing to put into the business?
After all that, do you have a resounding "Yes!" to those three questions? Okay, on to the next strategic decision.
You see, for retailers, there are Four (Only!) Ways to Grow, based on the two fundamental variables for managing growth. One is your Merchandise; the other is your Customers.
See the chart above that shows how those intersect (and see a more detailed discussion here on The ROI site.)
No matter which growth strategy you choose to pursue, there are implications on all of your resources, especially human and financial capital.
All this need not be a time consuming process. We know that retailers can think fast! Just make a conscious choice of which one of the basic four ways to grow you intend to pursue.
For those who are definitely in that resounding "Yes!!" camp, more power to you!
You can proceed with more confidence; you have a clear strategic choice in hand. You now have a basis for all the forthcoming hard decisions. And tools for explaining your decisions to staff and family.
For retailers there are two very strong trends happening now through the Holiday Season. And they are remarkably divergent.
We often caution that many vendors are so much better trained at selling than retailers are trained at buying. In their eagerness to grow sales, and the associated promise of thereby growing profits, it is all too easy for retailers to become overbought. Instead of higher profits, they can find themselves in a cash flow crunch.
And that was in Before Times, before the pandemics. Throughout 2020 and continuing now, vendors and retailers alike have increased their online capabilities. Ordering online brought new challenges to buyers and sales reps, but also saved time and improved access.
We have applauded these advances in technology, but...
For some time, conventional wisdom has characterized independent retailers as "technology laggards."
Not that they are Luddites; it's just that they regarded retail technology as a major expense, especially in human capital. They often were cautious, even skeptical, about the promises of new technology being pitched to them.
When the pandemics arrived, many retailers responded rapidly and smartly. In scramble mode, some crammed five years of technology adoption into five months!
Now, as the lockdown restrictions recede, the conventional wisdom eagerly suggests that consumers of all ages will continue to rely on online shopping and other technology.
Hmm. Let's consider that "conventional wisdom" a bit more closely.
Have you noticed? That persisting Plague of Uncertainty that keeps hanging around?
And amidst all this relentless uncertainty, you still have a business to run, employees to motivate, customers to satisfy, vendors to deal with, creditors to pay, etc, etc.
Here are some ideas on how to approach that.
As your stores are able to re-open after the coronavirus shutdowns, how they look tells a powerful story. And for you, a great opportunity.
This is no time to try to go back to normal, back to business-as-usual. Nor to simply have all kinds of protective shields in your store. While necessary, how welcoming is that?
Instead, this actually IS a second chance to make a good first impression! Take full advantage!
Without a doubt, these continue to be unprecedented times for managing a retail business. The Disruption with a capital D continues, from the pandemic to supply chain challenges, employee issues, worldwide inflation, interest rate increases, etc. And now, the global economy is in more turmoil due to the Ukraine invasion and the resulting sanctions against Russia.
Lots of challenges for business owners as they wrestle with rising costs, aren't there?
But for independent retailers, there exists one glorious opportunity: price elasticity. Yes, raising prices. A whole new ball game for many independent retailers.
Still less than $1 a day! 👀