PERSPECTIVES

From The Co-Founders

rss

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

grfx-FromTheCoFs/Megaphone.png

The constant challenge for retailers is to anticipate what their customers really want.  And this year, there seem to be plenty of choices available.

  • A "frictionless" checkout procedure? 
  • One hour delivery? 
  • Buy Now, Pay Later?
  • "This particular item in this particular color and size. Right now!?"
  • Etcetera

It is all part of the on-going challenge of retail; the art and craft of being a merchant. 

Then there are the customers who are reacting to the constant drumbeat of news about supply chain issues, merchandise shortages, and looming price increases by starting their shopping early. 

Adding to this stampede, some major chains were launching their Black Friday specials before Halloween!

COVID-19 thumbs/bifurcation.png

For retailers there are two very strong trends happening now through the Holiday Season. And they are remarkably divergent. 

  • One that is getting a lot of publicity is how Target, WalMart, etc. are promoting their “Black Friday “ specials four weeks before Thanksgiving. 

    Sounds desperate to us, but it is a sign of the times. 

It has begun; the 4th quarter of the year. But sadly, Covid-19, the Delta variant, and now the Alpha variant will have huge influence. 

Meanwhile, there is no shortage of opinions and predictions about the economy, whether from Wall Street, the Fed, Capitol Hill, or your buying group or retail trade association. 

Amidst all this, we were intrigued by a report that could be of far more value to retailersresults of a monthly survey of consumer concerns.* After all, for retailers, the shopper matters much more than the pundits on the business pages.

checklist.png

Just when it seems we can get to the "New Normal" or the "Next Normal," another disruption comes along. 

"There still is so much uncertainty" is the lament, often accompanied by a sigh of weariness. Or resignation. Trying to plan for the Holiday season, or looking ahead to 2022, can seem especially daunting right now.

Occasionally, all of our businesses need to hit "pause;" this is one of those times. 

Recognize that thanks to the pandemics, most everything about running your business has changed. Your merchandise mix; your customers; your staff; your competitors; your suppliers; your landlord; your technology; etcetera. Everything!

  • With all those changes, how could going forward have much resemblance to however you used to do business?
  • And as is always true in retail, the name of the game is adjusting!

calendar.jpeg

Consider this: Will this Holiday Season happen... 

  • In traditional RETAIL Time? 
  • Or always-on INTERNET Time? 
  • Or, the grinding PANDEMIC Time? 
  • Or, some combination of all of it?

What a 90 days it will be! 

Remember July and early August, when there was much optimism? 

  • Consumers were excitedly resuming in-store shopping and dining. 
  • Social gatherings were increasing. 
  • Pent up demand was high. 
  • And shoppers were eager to make this year extra special to compensate for last year. 

For retailers, the Fog of Uncertainty that began in April 2020 around the pandemics keeps coming back. Just when it appeared that we were ready to "get back to life" if not "back to normal," the Delta variant has surged. 

This has created more uncertainty. How willing are your customers to actually go out and shop? Even more important (to you): how willing are YOUR customers to shop with YOU?

So, here's an idea: Why not ask them? Really. Send them a short questionnaire.*

Throughout the pandemics, many independent retailers successfully shed their "technology laggards" label, as they pivoted to embrace an array of digital tools.

Yet going forward, it is well to keep in mind what really matters to the customers. And it may not be more technology.

A recent survey* of more than 2,000 customers provides some interesting insights as to who shops where, why, when and how. It especially highlighted the differences between "large stores" and "smaller stores" (or as we view them, "specialty stores.")

  • “The data revealed that 75 percent of consumers shopping at a larger store knew what they wanted before crossing the premises." 
  • Those who shop in larger retailers say 'We just want to get in and get out.'”

Hmm. This suggests to us that shoppers essentially are treating large stores the same way they treat the internet:

MasterChart3v2.png

As we follow economic indicators that particularly affect retailers, our primary focus always is consumer confidence. And the reports coming out this week give us pause. 

  • "The Consumer Sentiment Index fell by 13.5% from July, to a level that was just below the April 2020 low of 71.8," notes Richard Curtin, chief economist for the University of Michigan's Surveys of Consumers.*
     
  • "The extraordinary surge in negative economic assessments reflects an emotional response, mainly from dashed hopes that the pandemic would soon end."

The highly transmissible Delta variant and the vaccine hesitancy of many have changed the momentum. Covid fatigue is back. This affects consumers. 

And with it, more challenges for retailers. Decisions and policies may be needed regarding vaccinations, both for your staff and your shoppers. Meanwhile, consumers are likely taking another pause. Will schools reopen? Will offices reopen? 

So, what's a retailer to do? What you always do: deal with it!