As we approach April of 2021, the question for retailers is "Now what?" Having survived 2020, in many cases on guts and guile, we must now focus on how best to survive 2021 and beyond. As having one foot on the dock and one foot in the boat, the future of retailers in that Red Zone is not a pretty picture. Granted, there is much talk about the expectation that "convenience" will become a major factor for shoppers going forward. And we don't disagree.
Here's the deal: We see that this has brought heightened awareness of two different retail strategies: Convenience Retailing versus Destination Retailing.
No matter which you choose, it will - and must - drive many of your other decisions: merchandise mix; vendor selection; employees; pricing; the store look; services offered; essentially everything! That Uncertain/Undecided middle ground is not a viable choice. Those who end up there by default are on their first step to being former retailers! What is demanded of Convenience Retailers? It's more than "location, location, location!" Indeed, given all the work-from-home changes, including disruptions to commuting patterns, there is a considerable shift in what constitutes a "convenient location." Convenience Retailers have a demanding set of priorities for success, as they are in that lower-margin-higher-volume game.
What is the other choice? To focus on being more of a Destination Retailer. Consider, for instance, fast food restaurants are "convenience retailers," whereas neighborhood sit-down restaurants are "destination retailers."
As such, stores of Destination Retailers tend to feature:
Many retailers are today caught betwixt and between. Because of the improved performance of both Convenience Retailers and Destination Retailers, the consumers are responding positively. Up to a year ago, being in the middle might have been acceptable. That is no longer true; that Red Zone is treacherous. Take this heads up to heart!
Maybe you've also noticed it. The recent articles about how retailers now have their inventories "more in line" after the glut of excess inventory caused by "supply chain disruption." Okay. That's good news. But, what jumps out at us is the frequent reference to "just-in-time" inventory management.
Look, if you can't measure it, you can't manage it. And, if you can't manage something, by definition (and experience!) it is out of control.
According to the calendar, as of March 21, it officially is springtime. No matter what the weather is doing. Well, it's time to bring the calendar to real life! Spring is really a state of mind! The dark winter has passed. Even the rain is warmer in the spring. And new growth is beginning to sprout; leaves are coming out. It's a wonderful, fresh outlook. And that of course means it is a wonderful opportunity for retailers to refresh and reenergize their stores. No matter what merchandise you sell - whether it's tires, apparel, books, housewares, office supplies, whatever - every retailer is in the fashion business. And that means that your customers are wanting what is new and fresh.You know; "in fashion."
Another real challenge of 2021 is rearing its head: Whatever you used to do in terms of managing your staff likely will not work this year.
In the aftermath of the pandemics, lockdowns, stimulus payments, low unemployment, and minimum wage increases, finding and keeping good employees is even more daunting for independent retailers.
There's little that any of us can do to address the public health crisis of the pandemic. Its impact on people and businesses is a widespread and major jolt, akin to the shocks of 9/11 and the 2008-09 economic meltdown. Even as painful and disruptive as the pandemic is at this moment, we must remind ourselves that it will subside. It's not whether it will subside, just when. But all of us are going to have to deal with the ensuing economic situation, and its effects on our sales, our customers, our employees. These are difficult times for us all. Retailing in particular is under enormous stress. Many feel like there are no good choices. But, there are good decisions. And The ROI is dedicated to helping you be able to make those good decisions for yourself.
We hear it over and over. "Good business citizenship" matters to shoppers. Especially for retailers, who are quasi-public figures in their communities. (AND in a goldfish bowl.) Customers vote with their feet, their wallets, and their hearts, and increasingly choose those retailers who "do the right thing", whether it's how they source product, hire and pay employees, reduce environmental impacts, etc. There are things that independent retailers do day in and day out, without perhaps even realizing how special they are! Most retailers we know are "aw shucks" type people. It's charming, but, especially in today's world, your leadership can be a competitive edge! So, why keep it a secret? Many of you are using social media to promote sales events, new product arrivals, etc. Why stop there? Social media – and your website – is the perfect place to share examples of the values that drive your business. And face it; those values may be too scarce today. They need to be featured!
The season of ghosts and goblins and things that go bump in the night is upon us. While Halloween comes and goes, there may be another very unhappy monster haunting retailers this Holiday season. And it is spooky! What is this monster? It is an unintended consequence of the good faith efforts of many retailers to provide "excellent customer service." Customer expectations have been raised to heights that may not be fulfilled this year. A grim reality is setting in.
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