As I sit and scan the retail horizon, it’s hard not to get caught up in the economic doom and gloom the mainstream news seems hell-bent on proliferating. Yes, we are in uncertain economic times. Yes, we have to be ready for anything. Government policies, global events, business cycles and consumer behavior are erratic as all get-out. As a result, a lot of people feel like it’s time to batten the hatches. Don’t buy into it!
Temporary downturn or total recession, we simply can’t control the economic climate. What we can control, however, is our response to it. We saw this play out during COVID, as many brands went belly up while others got scrappy and strategic and emerged ahead. No matter what’s happening in the news, you can outsmart any financial fiasco and not just survive but thrive by embracing three guiding principles:
Make the most of what you can you control
In the fast-paced world of retail, time is of the essence. Rather than waiting for a miracle, capitalize on the tools, inventory and resources you have on hand right now. Not next month, not next season, but now. It’s all about buckling in and getting more efficient.
The faster you can move your merchandise, the better for your bottom line. We all know that timing and turnover matter a lot. If you can turn what’s on the floor faster, narrowing your merchandising by even an extra half turn per year, you can enhance your profitability by as much as 5-10%!
This is even more important during a downturn. When customers get more cautious with their spending, it becomes essential to liven up your offerings to match their immediate needs. Even minor tweaks in merchandising strategies can move the needle, so analyze your sales data and customer preferences to identify trends and prioritize products with the highest demand. Also, leverage promotions and incentives to attract new customers and create new buying occasions.
By focusing on what is within your reach, you can clear outdated inventory, free up the real estate in your store and feature new merchandise with better movement and margins front and center, to keep the cash coming in.
Get the tools to take you further
You can’t do any of the above without the right technology in place to help you understand your current situation. You have to have the right tools!
For instance, I know you have a point-of-sale (POS) system, but are you utilizing it to its full potential? A rocking POS solution, coupled with a solid inventory control system, can arm you with the invaluable data insights you need to power up profits. Knowing what’s selling and what’s not, understanding customer preferences and managing inventory flow can for sure guide better decision making, but you’re leaving money on the table by not weaving adjacent technologies like door counting, loyalty programs and smart marketing into the mix.
By integrating synergistic retail technologies, you get a more comprehensive understanding of your customers and their preferences so that you can steer their buying behaviors to your advantage. Loyalty programs, for instance, spark more repeat visits and foster a deeper connection with your store brand. Effective marketing strategies targeted at specific customer segments can drive foot traffic and boost sales. The insights gleaned empower you to offer personalized experiences, creating a more loyal customer base even during the most difficult times.
Clienteling in particular can be a game changer. Engaging with customers, providing personalized recommendations and keeping them informed about new products and events can lead to skyrocketing sales and loyalty numbers — an average of 2.5 times more sales per clienteling customer than with regular customers. Clienteling customers come in more, buy more and stay more loyal.
Each of these tools offers significant value by itself, but working together, they operate like a force multiplier and can have an exponential effect on your retail business. Read that again!
Rededicate to the ‘rudimentary of retail’
There is no denying that sometimes, managing a retail business ain’t pretty. It can be tedious, time-consuming and involve tasks no one wants to do. However, the devil truly is in the details, so diligent dedication to retail processes is key.
It’s a lot like having a gym membership. You have all the resources you need to get fit, but to take full advantage and get the most out of them, you need to lean in and be diligent. You have to stay centered, focus and respect that everything that you do gets you closer to your goals. Good daily habits may not yield immediate gratification, but over time the results become evident!
So, are you digging in and managing your store data? Watching and documenting inventory flow? Do you know what you need to do to get the best information to manage your store well? Really well? It can be a grind, but it’s 100% necessary.
Here’s another way to look at this. Tech vendors and “experts” are always talking about mapping out a plan. Sure, this helps you set your sights on the final destination. However, great technology integrated together seamlessly acts more like a GPS. It can guide you all the way there, helping you navigate the twists, turns and unexpected roadblocks while keeping you squarely on the best possible course.
In summary: Screw recessions!
The key to outsmarting any downturn is to focus on what you can control and seize the opportunities lying within your grasp. By making the most of your existing resources, leveraging the power of retail technology and rededicating yourself to good retail fitness, you can steer your business out of any financial storm and emerge stronger on the other side, often using just the tools you already have and no additional investment. So, what are you waiting for?