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

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Get Ready. A New, Upbeat Era is Coming!

As the final third of the year approaches, there's a "new era" afoot. There is optimism in the air. 

Optimism? Really? 

Yes! And it could catch a lot of folks by surprise. 
 

Consider these "early warning signs" of approaching good news:

  • Those surveys of "consumer attitudes" indicate that folks do reflect the news headlines regarding the economy – that is, respondents are pessimistic about "the economy." But when asked about their own financial situation, the responses were very positive; people feel good about their personal financial situation.
  • Meanwhile, the University of Michigan's Survey of Consumer Sentiment shows improvement. Just the beginning of a trend?
     
  • The pent-up demand for family vacations, wedding celebrations, participation in summer camps, attending sporting events or live concerts – many of those activities have resumed. And more to follow, as the school year begins and we head into the fall season of spectator sports, concert series, etc. 
     
  • The approaching cadence of post-Labor Day fall and winter holidays, from Halloween to Thanksgiving to the Christmas holidays and New Yearsoffer many opportunities for people to re-engage and celebrate with friends and family. Look for people to seize these opportunities with enthusiasm. 

All of these elements create a heightened sense of control in our daily lives, which has been missing throughout much of the pandemic.


And it also shows up in the business world as well.

  • The two-plus years of Covid and its relentless uncertainties, disruptions and impositions on our daily lives have given way to significant shifts in attitudes, and power. 
     
  • Consider how "work from home" is becoming a deal-breaker for some employees, and note how employers have had to adjust.
     
  • Similarly, the increasing sense of empowerment by employees at Starbucks, Amazon, REI and others, as reflected in their efforts to form unions, is another aspect of this newfound sense among employees of power and control.

Regaining more control in our lives has lead to a new, upbeat can-do attitude of optimism. 


Retailers – who we believe are the most optimistic people on earth – need very little encouragement to have an upbeat attitude about the future.  

But we believe at this stage of 2022, it is more than warranted. And we encourage all to be prepared for many of your shoppers to be very upbeat. The new era bodes well.

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    Big Waves Incoming! Ready to Take Advantage?

    This Holiday season is bringing three big waves for retailers, in rapid succession. And each one requires a strikingly different management response. 

    Wave #1 - the High Margin Wave - has begun in earnest, and will continue through Christmas Eve.

    Faced with the shipping delays (and surcharges), customers have turned to brick-and-mortar stores. The savvy retailers are ready for them.

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    Okay, we're ready. So...where are the customers?!

    So, say you have re-opened your stores. Then what? Did the customers come back? 

    Or, were many of those who did show up just there to say "Hello!" And "We missed you!", but not to buy? Sigh.

    We are not surprised. And here's why.
     

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    Enough already with the "Covid Fatigue"

    Have you noticed? "Covid fatigue" has been spreading lately. It seems to be almost as contagious as the virus itself. Ugh!

    And small wonder. Even as parts of the economy strive to re-open, they only remind us of how different everything is.
    • Major League Baseball played in stadiums of cardboard cutouts of fans. The U.S. Open Golf Tournament with no spectators. Professional basketball teams in "the bubble" at Disney World. 
    • And some colleges preparing to resume fall classes have been described as "a cross between a seminary and a minimum-security prison."
    Meanwhile, the U.S. Congress cannot agree on what should be done next. A nasty election campaign season looms. Protests are still happening in many locations. 

    Remember this: all these things that contribute to our Covid fatigue, what we have called the "Pandemic Trifecta of 2020" – the virus, the economic meltdown, the national protests – all of these are uncontrollables. We all are victims of all three pandemics. 

    But, you CAN control what you choose to do with your business going forward. Will you choose Door A, Door B or Door C? 
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    Ready for the Post-COVID Customers?

    Believe it! A second chance to make a good first impression!


    Yes, the shoppers WILL be returning. But boy, have they learned a lot during these pandemic times. 

    They are far more comfortable with online shopping, and in many cases, eager to continue that. And the convenience of "contactless" features like curbside pickup and BOPIS (Buy Online, Pickup In Store) are welcomed.

    In fact, an extensive survey from McKinsey & Company* provides considerable detail about the newly-learned online shopping behaviors of customers, and their expectations of continuing to use these new-found skills. 

    Particular changes with presumed staying power: 

    • More online shopping
    • Less brand loyalty
    • Need for "hygiene transparency"
    • Back to basics & value
    • Rise of the homebody economy

    But hold it. Wait just a minute. Our countervailing view is that the "homebody economy" will wear thin. And while customers do care even more about basics and value, especially when it comes to Holiday shopping, they will want "special." 

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    Ready to Seize This Opportunity?

    Like every natural disaster, whether a massive storm, earthquake, wildfire, we all are victims of COVID-19. 

    Not all of us have suffered being infected by the virus. But, essentially everybody has suffered losses. 

    • The loss of milestone celebrations of weddings, graduations, reunions, birthdays; anniversaries;
    • Lost access to theaters, museums, libraries, sporting events;
    • Loss of the sense of community that comes from going to work, or worship services, book clubs, or the local coffee shop; 
    • Loss of income, job losses;
    •  Or, sadly, the loss of loved ones. 

    Few have been spared. 

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    Get Your Tents and Sidewalks Ready!

    As more stores are able to reopen, and more shoppers are willing to emerge, what will they encounter?

    • "A glut of pent-up inventory is waiting to be dumped on consumers this summer as retail stores reopen in the U.S., and shoppers for everything from shoes to sofas should be able to find major bargains," reported the Wall Street Journal* on June 2.


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