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Patricia M. Johnson & Richard F. Outcalt
Retail Strategists and Retail Turnaround Experts
Co-Founders, The Retail Owners Institute® • Business Strata:G®
For retailers, pricing is never an easy task. Finding the sweet spot between growing sales and maintaining margins – while astutely managing turns and cash flow – is not a no brainer.
Then there is today's environment. Consider these recent headlines:
Tariffs have changed summer and holiday shopping in the US. Almost 40% of surveyed consumers spent less on Amazon Prime Day than in years past. — Retail Brew, July 24, 2025.
After Pledging to Keep Prices Low, Amazon Hiked Them on Hundreds of Essentials. Analysis found increases on 1,200 low-cost goods, while competitors such as Walmart made them cheaper —Wall Street Journal, July 20, 2025.
So, shoppers are trying to spend less. But prices are creeping up, no matter what.
The big problem, of course, is how the shoppers are dealing with all this. More uncertainty is NOT what they want or need.
That's why we get particularly concerned when we see stickers such as the one below on items in local grocery stores:
What the fine print reveals – often only at checkout, to the chagrin of employees – is that it is only the THIRD one that is free. This is not a BOGO offer.
Feels a little like a ripoff, doesn't it? A technicality.
Sigh. Should being a shopper require eternal vigilance?
Or, consider this: Which would you buy? 🧐
The 18 pack of 16 ounce cans for $14.99?
Or the 24 pack of 12 ounce cans for $22.69?
This photo of an in-store display was accompanied by the lament: "All I wanted was a beer. And now I have to do math??"
True; high school math teachers applauded this as a great example of needing math in real life. But is confounding the customer really a good approach?
Here's the opportunity for retailers. And it’s especially warranted in today’s environment. Make it more obvious that you are trying to team up with them.
Customers are not your adversary. You’re not trying to take advantage of them.
Make it more clear that your goal is to find the best products at the best price for your best customers. Not to fleece them. Show them some respect!
In today's environment, you need as many loyal, respected customers as you can serve. Don’t you agree?
On July 17, the U.S. Commerce Department released the most recent figures for monthly retail sales, with the June 2025 results. Go here on The ROI site to see the results for your retail sector, and how they compare to 2024 sales for those same 6 months.
Consider a retailer doing one million dollars in annual sales with a 40% gross profit.
If over the course of a year that retailer were to raise inventory turns from 2 to 3...they would raise $100,000 in cash!
Same sales. Same gross margin. Just less inventory on hand soaking up cash.
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Retail is always shifting, but lately? It’s been a full-on rollercoaster. The good news: independent retailers who pay attention—and stay flexible—can absolutely come out ahead.
Here are seven big trends shaping retail right now. As you read through them, ask yourself:
Where is your retail operation vis-a-vis each of these trends? (Leading? Following? Getting out of the way??)
What about your competitors or neighboring retailers: which ones of them are evidencing these trends? (And what does that mean for raising the consumer’s – that is, your customers' – expectations?)
SMALLER, SMARTER, MORE FLEXIBLE
Retail footprints continue to shrink—but strategy has grown. Multi-use spaces, curated product lines, and streamlined inventories are now standard. Landlords are more open to flexible lease terms (especially for proven independents). Don’t overlook renegotiation opportunities—or chances to sublease part of your space.
LOCALIZED + LIVABLE = RETAIL MAGNETS
Urban infill and the “15-minute neighborhood” are becoming a national norm, from downtown districts to suburban "mini-metro" hubs. Retailers located near dense housing, walkable neighborhoods, or transit hubs often benefit from steady foot traffic and loyal locals. Retail follows where people live – not just where they drive. Even in small towns, revitalized Main Streets and live-work-play districts are drawing both residents and spending.
ONLINE + OFFLINE: NOT EITHER/OR ANYMORE
2025 is not an "online vs. offline" world. It’s both. Savvy retailers offer shopping options that suit their customers—website, in-store, click-and-collect, even texting for quick orders. Pure-play online retailers now open physical showrooms or partner with boutiques. A solid online presence boosts your in-store traffic—and your credibility.
"TEMPORARY" IS A STRATEGY
Pop-ups, seasonal shops, and brand “test drives” are going strong—and often now planned as strategic, not reactive. It’s all part of how retailers stay nimble and test new ideas. Empty storefronts are becoming community assets when used by rotating businesses, local makers, or startup retailers. Landlords love the buzz and flexibility. So do consumers.
RETAIL…ON WHEELS, ON CALL, ON DEMAND
It’s not just food trucks anymore. In 2025, mobile retail is highly specialized, tech-enabled, and often hyper-local. From pet grooming vans to bookmobiles to fashion and floral trucks, mobile units meet customers where they are—and stay connected via text alerts and social channels.
EXPERIENCES STILL MATTER—BUT IT’S NOT ALL ABOUT THE WOW
Yes, immersive retail is still a draw. But today, that might mean DIY classes, live-streamed events from your store, or “quiet shopping” hours for older or introverted customers. The goal is the same: build connection, not just transactions. Think about your ideal customer—what would make them want to hang out longer?
AI + TECH FOR REAL PEOPLE
Some AI-powered tools do help —like smarter inventory systems, customer reminders, or point-of-sale platforms that track what’s working – and independent retailers are using it to compete smarter. The key? Tools that save you time, help your margins, or make life easier for your customers. That’s the kind of tech worth having.
So…are you leading? Following? Or scrambling to get out of the way? Some trends have real staying power. Now’s the time to take stock and make sure your strategy is keeping up with today’s reality.
The good news? Independents can adapt faster than the big guys!
WEBINAR Of The WEEK
All retailers want to increase productivity – of their stores, their employees, their advertising, their technology, etcetera. Right?
But, how about increasing the productivity of your largest asset? You know, your inventory!
"How?" you ask.
By using GMROI to help guide your decisions.
The ROI regards GMROI - Gross Margin Return on Inventory Investment - as the #1 Inventory Productivity Tool in retailing.
To learn more about why and how to use GMROI in your retail operation, be sure to take advantage of this lively – and free – Webinar of the Week with Pat Johnson and Dick Outcalt, Co-Founders of The ROI.
The Retail Owners Institute® has been empowering retailers since 1999 to "Turn on their financial headlights!" Our tools and resources are trusted by thousands of store owners to help grow profitable, resilient businesses.