We’ve all heard of Dickens’ A Tale of Two Cities. I always found his use of opposites to be incredibly powerful and compelling.
Remember these lines? “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.“
I find it fascinating how something written in 1859 so accurately describes how many of us feel today.
With that in mind, I would like to borrow ( and borrow very heavily) from those opening lines as well as the title of that novel to underscore the tone of a host of conversations I had with industry leaders during the recent High Point furniture market.
Only my story is going to be called A Tale of Two Stories. Let me explain. Many of the industry leaders I chatted with were telling two stories about this past market. There was the public story that said business was a bit challenging, but things were much improved, inventory levels would be back to normal shortly and life would once again be good.
Then, there was the private version that I would have with folks when we were clearly out of earshot of customers. That story was more like an earlier novel by Dickens called Bleak House and went something like this: “Yeah, our business is off mid- to high double digits, the economy is killing us, foot traffic at retail is way off and quite honestly, this crud is most likely going to hang on well into the new year.”
Plain and simple, my takeaway is that unless each of the channels of distribution changes things up, we are kidding ourselves if we think that if we just patiently hold on that things will improve.
Since the magic (or lack of it) happens at retail, I’ve decided to start by making a very basic list of things I think retailers might do to jump-start business in a sluggish economy. Keeping in mind that my list and $3.65 will get you a medium latte at Starbucks, here goes:
- Diversify Product Offerings: Expand your product range to cater to changing consumer needs and preferences. Consider adding essential or recession-proof items to your inventory, which may see increased demand during tough economic times.
- Improve Customer Experience: Focus on providing excellent customer service, as positive experiences can help retain existing customers and attract new ones. Personalize interactions, implement loyalty programs and offer hassle-free returns and exchanges.
- Price Optimization: Carefully review your pricing strategy. Offer competitive prices, discounts and promotions to attract cost-conscious shoppers. Bundle products, provide value packs and consider offering financing options to make purchases more affordable.
- Inventory Management: Streamline inventory management to reduce carrying costs and minimize overstocking. Use data analytics to forecast demand and ensure you have the right products in stock to meet customer needs.
- Embrace E-commerce: Even though e-com sales have been impacted by the lousy economy, the channel is still strong and often outpaces comparable sales made at brick-and-mortar stores. Invest in an online presence and e-commerce capabilities if you haven’t already. Many consumers turn to online shopping during economic downturns for convenience and cost savings. Ensure your website is user-friendly and mobile-responsive.
- Marketing and Promotion: Adjust your marketing strategies to target value-conscious consumers. Highlight cost-saving benefits in your advertising and consider partnerships with complementary businesses to expand your reach.
- Cost Reduction: Evaluate and reduce operational expenses where possible, without compromising quality and service. This may involve renegotiating supplier contracts, optimizing staffing levels and minimizing waste.
- Customer Retention: Focus on retaining existing customers by offering loyalty programs, personalized recommendations and exceptional customer service. It’s often more cost-effective to keep current customers than acquire new ones.
- Data Analytics: Leverage data analytics to gain insights into customer behavior, market trends and sales patterns. Data-driven decision-making can help you adapt to changing conditions and make more informed choices.
- Focus on Local Markets: Emphasize local marketing and community involvement to build strong ties with your customer base. Engage in partnerships with local organizations and promote the idea of supporting local businesses.
- Customer Feedback: Actively seek and act on customer feedback to adapt your business to their evolving needs. Encourage customers to share their opinions and use this information for continuous improvement.
- Adaptability and Flexibility: Be prepared to pivot and adapt your business strategy as economic conditions change. Businesses that can quickly respond to market shifts are more likely to survive and thrive in challenging times.
- Financial Management: Manage your cash flow effectively to ensure you have the financial resources to weather economic downturns. Consider securing lines of credit or emergency funding sources in advance.
- Sustainability and Social Responsibility: Embrace sustainable and socially responsible practices, as these aspects can resonate with consumers and drive brand loyalty.
- Employee Engagement: Motivated and engaged employees can make a significant difference in customer service and business performance. Invest in staff training and well-being to enhance their job satisfaction and productivity.
In challenging economic times, it’s essential for retailers to be proactive, customer-focused and willing to make strategic adjustments to meet changing and often challenging market demands and customer expectations.
Next time, I will take a stab at what suppliers can do. Then, I am going to take a look at what reps can do.
In the spirit of transparency, I have no illusions that my suggestions will be the key to unlocking the door to healthier sales. Rather, think of them as small candles that would rather illuminate than curse the darkness.