Are we at the “Pot of Gold” at the end of the rainbow? Due to the mix of supply chain issues creating scarcity, government stimulus, especially the PPP, ERC, and EIDL, and pent-up demand, 2021 has been a banner year for most Indie retailers. Faster inventory turnover and increased margins have ushered in a once in a lifetime opportunity. Many Indie retailers are in better shape now than pre-pandemic. The pendulum has swung mightily since April of 2020.
The question being asked is: will this continue into Spring and Fall 2022? As Fall 2022 orders are being placed in the middle of this euphoria, psychological tension exists. On the one hand, news of the Omicron variant is reviving scary memories of April 2020 and the paralysis we lived then. On the other, shoppers are buying, and money is flowing, bolstering the hopeful glee that we can squeeze another few seasons out of the recovery.
The question we should be asking ourselves is: who is going to control our destiny? Outside forces can deliver harsh or glowing results. Indie retailers have learned, adapted, adopted and employed new strategies from the Pandemic. If your expectation is that the old normal will return, and you can abandon what was achieved, then you might want to consider retirement while the going is good.
Controlling your destiny means focusing, being insanely curious, solving problems, and exploiting opportunities. Business has always been about taking risks and a willingness to move out of your comfort zone. Competition requires this.
Here are some thoughts on how to control your destiny:
- Fail Fast- you need data to be nimble. It’s easy to be persuaded by a “gut feeling,” but data is impartial and allows for quick, decisive action.
- Focus on key vendors and implement narrow and deep merchandising strategies. Some vendors are already doing some of this for you in their presentations for fall.
- Invest 10 to 15 % of your open-to-buy in tests; be willing to fail.
- Stop thinking of your business as a location and start thinking of it as a brand. This will change how you think and how you make decisions.
- Plan your budgets for 2022 and increase your marketing spend. Learn how to measure marketing ROI.
- Find and try new ways to communicate with and engage your customers and your audience.
- Along with an annual budget, work a 12-week cash flow.
- Be open to new compensation strategies.
- Focus on staying in front of the curve, not tagging along behind it.
You are in a fight to capture market share. There are resources available now that did not exist even two years ago. If you play it safe, a competitor you are not even aware of is lurking to steal it. Use tools, stay informed, use data, and have the courage to move forward.
I have witnessed changes I could never have imagined two to three years ago. And the biggest learning for me is how fast a new generation of retailers has taken digital and learned retail at an extraordinary pace. Many retailers who started three to five years ago and are now driving annual revenue exceeding $10 million. One client expects to do $100 million in the next five years, almost a ten-fold increase from pre-pandemic. What side of the fence do you want to sit on? The one that dictates to you or the one you control? The world is your oyster. Seize the moment.
Marc Weiss is CE0 of Management One, a data-driven advisory and buying service for independent retailers. He can be reached at firstname.lastname@example.org.