The constructive facets of the plague

Service of the new normal buyer

The pandemic provided an opportunity to critically assess the best way for your unique company.

Peter Huskins

By ShopAbility Director Peter Huskins.

Our world is slowly awakening from a forced sleep. How long the full recovery will take, what the speed limits look like and where we will end up is unclear. If I have my own retail business, how do I deal with this awakening now and what are the major issues to consider before deciding to invest in people, money, time and other resources to restart my business ?

There are no complete or specific answers here. In line with my previous articles, I try to think critically about how the future could develop. It is a major consequence to reflect your company's prospects as every retail store is slightly different. No two are exactly the same.

In addition, the world consists of half-full or half-empty people. Which one are you?

I am a half full (to overcrowded) guy and if that is my normal attitude we will go there. If you're a half-empty person, that's fine: just reverse what I'm saying.

Adversity creates character, ingenuity and opportunities. This "plague" will not only have a lasting impact on your retail business, but also the industry and the drivers of the entire industry.

While it is impossible to say what retail will look like after the pandemic, depending on where you are sitting, the obvious and evolving changes can be either a half-full opportunity or a half-empty challenge

Short-term versus long-term

You don't look at the horizon when sailing through a reef, and here we are today: in the middle of a bloody big reef.

We don't know what Christmas will look like this year. I have a few ideas, but they will most likely change and evolve as the community slowly awakens. There are too many moving parts to predict exactly what is going to happen, but there are many general short-term trends and indicators that you should consider as immediate ways to guide your business through these difficult times:

  • Digital and online options (but note the increased costs).
  • Locally oriented shopping.
  • Spend bigger baskets and dollars.
  • Shop less often.
  • Health and wellness.
  • Solutions.
  • Value versus fair price.
  • Service – this old chestnut again, but so relevant in this spending climate.
  • Social distance and how it can affect my business, especially the catering service and catering.
  • Careful buyers.
  • Cooking and entertaining at home, along with alcohol outside of the company.
  • House renovations.
  • Mixed seasons for fashion as the offshore ranges of the new seasons remain offshore.

What is right for your company may not be for your neighbors, but rather speak, read, listen, learn, test and test your market with a short-term focus and still keep an eye on the weather in the long term.

Make the most of slow days

This plague created the perfect opportunity to tackle some of the less pressing tasks that we've all postponed so far. Since our customers are more careful and the distance rules are still strict, your revenue generation approach may need to be updated.

Take the time to think about your business. Face the "too difficult" areas that you previously held in the balance.

  • Are my range and my offer correct?
  • Do I have too much stock and is it the right one?
  • How do I optimize my inventory efficiently?
  • How are my suppliers doing? Can you help somehow?
  • How does my competition react? Does it concern me?
  • What can I learn from other retailers or other formats, even if they are not a competition?
  • What can I learn from overseas?
  • Is my shop format and design relevant and up to date? Do I do a quick update?
  • Are my people good enough for what I need?
  • How do I develop leaner and nimble to react quickly to short-term opportunities and at the same time achieve my longer-term goals?
  • How do I apply? Do I use price, solutions, topics or seasons? What formats and channels to market?
  • What is the best way to talk to my customers about the technology they are using as drivers?
  • How can I speak to my customers in a different way because it is a diverse group?

Take the time to recover from the pandemic drop in sales and return to your regular sales volume by critically considering redesigning and evolving your business to reflect the current trading environment.

Remember that you don't have to completely change your brand identity or business model to be successful, you just have to reaffirm what you want to be famous for.

Pay attention to your numbers

The pandemic has put more focus on the economic viability of any retail store than ever before. The weak have fallen since they would most likely have given time anyway, so don't be too upset about them. The rental signs that appear in shopping centers and strips are proof of this. The strong have stowed away and are taking this opportunity to tailor their business to what the new dawn will bring.

The Bellwether must be your number. They can be manipulated, but they don't lie. Sales in dollars and especially the margin analysis are crucial: where do I make my money and where do I invest my money?

The mix table below is a simple tool that I use with some retail customers to answer this question. Do 40% of my sales just give me 20% of my gross profit? Do 40% of my sales hold 60% of my inventory in US dollars and use 70% of my retail space? Is that sustainable? And your answer is …

category Sales $ % Mix GP $ GP% % Mix SOH $ % Mix room % Mix
TOTAL 100% 100% 100% 100%

Remember that this has to do with sales and margins. What about the costs that I incur to achieve these sales for my company with this margin?

Wages are the second highest cost of doing business after storage, rent is usually the third, and the other costs are eliminated. When was the last time I really looked closely and made some difficult decisions?

Do I have to spend this money on needs and needs with an unclear future in this way?

Jump back with confidence

COVID-19 has forced years of slow change into six to 12 months of controlled chaos. The future will not be the same as the past we left behind. Santa will still arrive on 12/25/20, but how we organize the Christmas party will be different.

So plan ahead, but not too far. Have a preferred plan along with a few backup alternatives just in case. Get involved and invest to make your plans a reality. However, always be ready to respond quickly if your course needs to change a few degrees.

Be confident that the future will be promising.

Is your glass half full or half empty?

About Peter Huskins

Peter Huskins is a career retailer that is well known and recognized in the Australian FMCG industry. As a pioneer in shopper marketing, a passionate retailer, speaker and trainer, he has worked with suppliers and retailers for more than 20 years to develop business, category, customer and channel strategies as well as competitive differences. Call Peter on 0412 574793 or send an email to: peter@shop-ability.com.au

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