I’m sure I speak for many of you by stating that I am happy to close out 2020 and begin a new year. Given my chronological positioning such that it is, I’m not looking for ways to expedite life’s journey. However, with the numerous well-documented challenges endured by all this past year, who wouldn’t be ready and willing to embrace a new beginning?
Last year’s hardships are hopefully in the rearview mirror as we await whatever the new year challenges may bring. What lessons have been learned that might serve us well in the upcoming twelve months? Many retailers discovered new ways of doing business. The creation of online shopping options and virtual presentations on social media platforms to name two.
The new year blesses all of us each calendar cycle with an opportunity to pause, reflect, learn from the past, and reset in all areas of life. From a business perspective, it’s a time to review our merchandising approach. What worked that we can build on and what didn’t that we should change? Areas to be scrutinized include merchandising, store operations, expenses, and personnel.
Merchandising is a broad area. It can refer to how goods are presented and marketed, as well as vendor relationships. Will the upcoming year require the same protocol of masks and social distancing requirements of last year or will things settle down to where they were pre-COVID? Time will tell. Will a higher percentage of business be transacted online versus in-store? If so, is your business ready to accept a “new normal” in 2021?
Some vendors might be expanded while others are reduced or in some cases eliminated. This past year affected all of us and the wholesale world is no exception. Production problems caused late or canceled deliveries, bankruptcies forced supply chain interruptions, and changes in sales personnel affected customer service. In spite of all of the issues, most of you not only survived, but in many cases, ended up stronger than you might have thought possible.
As difficult as it may be, review the current merchandising metrics. How cash flow was handled, how merchandising problems were dealt with, as well as the freshness of the inventory are all questions that should be answered objectively. January is also a great time to review the current classification structure. Are there categories in the current merchandising structure that have become obsolete? If so, replace them with emerging categories that might yield more upside potential and commit to adhering closely to your merchandise plan. Revisions may need to be made in sales forecasting both up and down to adequately reflect current trends. This is key to a successful merchandising strategy and should be done regularly.
MARKETING, OPERATIONS, AND PERSONNEL
Does your current marketing strategy reflect any changes to your business? Perhaps more funds need to be devoted to online marketing and social media. Perhaps adding online marketing is now justified as the percentage of e-com business continues to grow.
This year brought about safety protocols never before imagined. Evaluate how your customers and employees are reacting to them and determine if any changes need to be made.
Finally, review year-end financials carefully. Determine if current expenses are in line not only with industry norms, but with your projected volume. Since operating expenses can consume up to forty-three percent of total sales, it is important to budget them just as you would your merchandising plan. Go over every line item in your operating budget and take any action needed.
The first of the new year is the opportune time to review current staffing and decide if changes to the lineup are warranted. It is important to follow through with year-end reviews if promised and document the same in personnel records. If job opportunities exist, will you promote from within or go outside of the organization? Sometimes new ideas from the outside can bring about a fresh perspective.
“WHAT DOESN’T KILL YOU MAKES YOU STRONGER.”
The German philosopher, Friedrich Nietzsche’s aphorism from the 19th century pretty much sums it up. Though this year has been disruptive to put it mildly, most retailers learned valuable lessons that will serve them well for years to come. Many learned which vendors were partners in the true sense of the word by supporting them with inventory, price adjustments, and modified payment schedules that were palatable. Others discovered that landlords really did care about their well-being with rent relief. From my vantage point, focusing on inventory control, I saw retailers learn that they could actually sell the same or more with a streamlined vendor mix and less inventory. I witnessed how those who kept cash available and a constant flow of new merchandise arriving regularly were rewarded with profitable full-price sales as customers began to emerge from isolation. Customer service became much more than a trite slogan when I saw store owners walking purchases out to customers in waiting cars, delivering them to their homes, or working with them individually after hours in the store out of safety precautions. Product classifications like running shoes sustained many a merchant when the need for dress shoes vanished as more people worked from home and avoided social gatherings. These are just a sampling of the positives that came from this year. Sometimes it can be difficult to recognize good if we don’t know what bad looks like. I sincerely hope that all of you have learned lessons from the past year that will help you become better retailers in the coming year.
“I am thankful for my struggle because without it, I wouldn’t have stumbled upon my strength.” -Alexandra Elle
Ritchie Sayner is a retail consultant working with Management One; he can be reached at email@example.com.