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

"Projected Growth Based On Trend"

We recently saw a cartoon that made us laugh out loud — and then think of the Strata:G Calculators.

The cartoon shows a puppy at birth, then at 8 weeks, then at 20 weeks, and finally — in the “projected” panel — a long-legged, pointy-nosed, skinny-tailed creature labeled “Projected growth based on trend.”

Of course, that’s the problem with straight-line projections, isn’t it? Arithmetic will happily keep extending a trend forever. Reality? Not so much.

That’s where the Strata:G® Calculators stand apart.

Sure, anyone can make a spreadsheet do math. “Raise sales 5% a month.” Blink. Done. The numbers march neatly down the page, perfectly consistent — and perfectly meaningless.

What the Strata:G Calculators do is different. They’re built with room for your business savvy baked in.

There are many ways to succeed in retailing, many ways to assert your competitive edge, whether location, pricing, merchandise selection, knowledgeable staff, etc. 

But there is only one way that retail businesses fail: they fail financially. So the key to success? Have a competitive edge, and take charge of the financial demands of the business. 

Where Do I Start?

As a retailer, navigating your financials can feel overwhelming. That’s why we’ve created a suite of online calculators designed specifically for independent retailers like you. No spreadsheets, no guesswork—just fast, clear insights for your next business decision.

Here’s how and when to use five of our powerful tools:

The Retail Brew newsletter posted their "roundup of the highest profile holiday forecasts." Their summation? "Experts predict cautious consumers will slow their roll in 2025." *

  • They cited forecasts from Adobe Analytics, the Mastercard Economics Institute (MEI), Bain & Company, PricewaterhouseCoopers, and Deloitte. They explain how each of these sources gathers their data, what each source concludes - their Data Points – and their Insights. 

Retail Brew's conclusion: "A rough consensus is forming among experts that the 2025 holiday season could be a letdown compared to last year."

As you are the in-house expert on your business, that's undoubtedly not news to you. But it may confirm and quantify that dark cloud hovering on the horizon.

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What about your own expectations for 2025?

  • Will your sales less your expense goals add up to a profit? 

  • Or are there surprises ahead?

  • Do you have a way to know throughout the year?

That’s where the PROFITS Forecaster/Trend Tracker comes in.

  • This retailer-friendly calculator lets you project whether your expectations for sales, margins, and expenses will deliver the profit you need.

Ahh yes, yet another flexibility test. The first quarter of 2023 was full of some major events, nationally and internationally, that disrupted many business plans.

As you contemplate where you are now with your retail operation, compared to where you intended to be, don't despair! Even more important, just like you do with the GPS system in your car, disregard "returning to the prescribed route."

This is retail, after all. Change is the name of the game!

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Embracing Uncertainty: The Essence of Retailing

"The mantra of 2022 should really be: No one knows anything," opined a business reporter.* "It’s stunning how little we understand about how the pandemic has changed our lives and our country. It’s not clear whether the U.S. economy is hot or not, or if big cities will be forever scarred." 
  • "The future of our online shopping habits is another unknown. This is not just a nerdy debate. Our collective buying behavior sways trillion-dollar companies, millions of retail jobs and the health of the U.S. economy." 

  • "The uncertainty about the direction of online shopping is one of the biggest questions facing the tech industry and financial markets right now."
Well yes, of course. The tech industry and the financial markets do prefer predictability. The uncertainties of retailing always have bedeviled them. And now, with Amazon's recent retrenching, backing off some expansion, their crystal balls have turned cloudy. 
 

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"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.

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Spring is in the air.  More places are lifting Covid restrictions. Daylight savings time starts this coming Sunday, extending the evening hours. 

And, for the first time in years, we can expect to celebrate Easter, Mother's Day, Father's Day, graduations, weddings with few restrictions. All promise a renewed air of celebration! 

There is widespread anticipation that consumer spending will be very strong. But...spending on what? Before you place all those merchandise orders, consider this.

  • We expect that the second quarter burst of consumer spending will be weighted towards services more than consumer goods. A big surprise for many.