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As Amazon's second two-day Prime Day of the year approaches – this one is October 8 and 9 – retailers from all segments are wondering (or being asked): "So, how do you compete with Amazon?"
Our response? You don't, at least not directly. Not on their turf.
Look, independent retailers do have many strategic advantages over Amazon. Your challenge – and opportunity – is to recognize them, and enhance them at every opportunity. Here are some ideas that you may want to consider to allow you to compete on your terms.
No more attempts to be all things to all people. Instead, focus on the portion of your market – and the customers – that are most profitable for your operation. (Go here for more about that.)
Remember that life stages (presence and ages of children in the household) drive buying decisions. Shoppers from which lifestage are most profitable for your stores?
Some retailers in this situation essentially freak out. But the pros, like you, know to keep asking questions. Before they decide what to do next to fix lagging sales, they want to know "Why?"
So, rather than guess the answer, here is a way to get to the numbers behind the numbers; to begin to know the "why" of your sales trends, whether they’re falling or rising.
All it takes is tapping into the data that's already in your POS system, and putting together a little summary tally sheet. The point is to get some key data together in one place so you can easily, quickly, and for free, compare and analyze your results.
We once knew a lady who steadfastly championed the idea that Labor Day should be considered New Year's Eve, and the Tuesday after Labor Day as the start of the New Year. (Yes, she was ahead of her time in many other ways as well.)
Here's her reasoning about the "real" New Year's Eve: as summer fades away and vacations end, the new school year starts up; the baseball season pennant race is on; football games begin.
As all this happens, she explained, most people take on a renewed sense of energy.
The promise of a fresh start is everywhere. Optimism abounds!
This shows the average annual pre-tax income (in 2022) and average expenditures, for US total, and by generation.
And this chart shows total US population by generation, by age in 2022.
Granted, everyone in retailing who looks at these two charts from the Collage Group* will conclude something different. Didn’t you?!
An article in the Retail Dive Brief* on August 5 jumped out at us with some fright. (We’ll get to what concerns us greatly in a moment.) Here's what was shared:
As reported by Max Garland, Amazon Merchants who use Fulfillment By Amazon are advised to send their holiday inventory to Amazon during August and September, to arrive no later than October 19, a week earlier than last year. (And six weeks in advance of Black Friday.)
And Garland cautioned, "Sellers who miss the October inventory receiving deadline may have tough luck finding space at Amazon’s fulfillment centers."
But merchants need not worry. (And this is what concerned us.) Amazon can assure that "sellers will have enough room for six months of inventory on average." 👀
As we look around, we see a popular cost-saving and productivity-boosting tactic being instituted by many national retailers, shopping malls, and restaurants. They are open fewer hours.
This offers an opportunity for you to revisit your store hours and employee scheduling practices. Maybe it's time to consider some changes, if you haven't already.
Your customers have voted with their feet. Your goal is to see what patterns there are in their shopping visits. (This could be a fine project for a summer employee home from college.)
Start small; focus on , say, the last four weeks of data collected by your POS system. But this time, produce reports by the day of the week. Yep, seven columns of data. Wait till you see what it can reveal!
Find out how revolutionizing it can be to have freedom from old merchandise!
This year, the stars align. The 4th of July is on a Thursday!
We see it as a gift for retailers from the calendar gods. Four days, Thursday through Sunday. What a great opportunity for a true blow-out sale event!
Perhaps you saw that recent article* in The Wall Street Journal. As Ruth Simon reported, "The cost pressures squeezing small businesses – and their need to pass along those higher charges – help explain why inflation has been so stubborn."
Incredible value! 👀
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