This Holiday season is bringing three big waves for retailers, in rapid succession. And each one requires a strikingly different management response.
Faced with the shipping delays (and surcharges), customers have turned to brick-and-mortar stores. The savvy retailers are ready for them.
That's why this is the time where merchants will have tucked away all the off-price merchandise, showcasing only the full margin goods. Unleash your merchant instincts! That sweater you've been offering at $60? Mark it to $65! Customers know that for Christmas to happen, they must and will buy now.
All that merchandise you tucked away during the first wave? Now it is back, with extra sharp markdowns.
Brace yourself. The rate of returns of merchandise purchased online is about 4 times higher than a retailer's typical return rate. Come January, customers seeking to return or exchange merchandise they received (or self-gifted) at Christmas could feel like a stampede. And difficult for your staff to keep smiles on their faces. (Another good reason to wear a mask!)
Watch for the three separate waves. And don't get seasick!
We're sure you'll agree. Misinformation can be very harmful. Retailers surely don't need more harmful anythings!
Just last week, we came across the proverbial straw that broke the camel's back. It was a post on the Intuit Quickbooks site*, titled "Inventory Turnover Ratio." And the explanatory article was accompanied by an "Inventory Turnover Calculator."
What do we take exception to? The misleading and/or incorrect information it provides. For example, their "Inventory turnover calculator" requires two entries.
We must take exception. "Total costs involved in selling your products" is NOT the same as Cost of Goods Sold. Nor do they specify that it should be for a 12-month period of time.
We must take exception. What they surely meant to say is inventory @cost.
As the Holiday Season approaches, finding good help promises to be especially challenging for retailers this year. Then, we read "10 Things to Know to Get And Keep Retail Jobs," a to-the-point commentary from Bob Phibbs*, who specializes in retail sales training. Here are his Top Ten recommendations for prospective retail employees:
As more stores are able to reopen, and more shoppers are willing to emerge, what will they encounter?
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:
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."
A frequent recommendation for how to navigate the current economic uncertainty is to be more diligent about controlling expenses, and focus on profit. (You'll see; we challenge that below.) Hmm. Concentrating on profits is easier said than done in today's environment, with cost increases proliferating under the umbrella of inflation.
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