IF DEPARTMENT STORES DON’T RECOVER, WHERE WILL THIS LEAVE SPECIALTY STORES?
Q: I’m reading a lot about how department stores—that were already in trouble—may not recover from this economic crisis. Where will this leave specialty stores?
Steve Pruitt: First, let’s hope that the department stores make it. There are a lot of great retailers that work in those stores. But in the face of this crisis, it is true that the big boxes are facing a real threat, and independent merchants who manage their companies well could be the big winners.
Here’s how:
Let’s start with realigning the selling seasons. We actually have an opportunity to align the seasonal merchandise with consumers’ lifestyles. (Historically, it has been too early.) Making this big shift now only makes sense because we are in dire need for higher margins.
Next, I would suggest you take more control flowing receipts (another big cash flow win). Instead of having a seasonal receipt flow, we need a monthly receipt flow. This concept is going to require our retailer/vendor partnerships to be deeper and extremely flexible. For those who get their arms around monthly receipt planning, cash flow will even out. There will be less need for markdowns, because inventory isn’t aging as much. Improved aging is another important factor in sales increases.
So, where does this all leave the specialty store? In better control.
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Back in the 70’s and 80’s I tried to control my flow of goods due to my desert climate. Only my newer smaller vendors worked with us. My longer term vendors had moved on to department stores after we piorneer their line creating demand. Then after a few years the big stores cut them back and they came back, after their line no longer had value to our customers. I ran 2 sales a year with one bg markdown with a preview nite for our VIP’s, worked great until some of my goods were on sale in the “big” guys” after 60 days. They deserve whats happening to them!
I agree with Bruce. Going back to basics will yield more wholesome experiences for an entirely new generation of consumers who never got to know a world that wasn’t dominated by big box stores, 80 yearly seasons and an overflow of cheap-quality merchandise that’s always heavily discounted. Good things take time, even learning that good things take time, takes time and experience. So I’m looking forward to the big guys shutting down. Cheap goods will still be available online. But lets revamp our cities and towns with significan places meant for actual people to interact and discover something new. After all that IS the real fabric of the American economy. I pay my salespeople considerably higher than a big store, so why shouldn’t stores like mine finally catch a break? After months at home people will value more the benefits of human interaction. They can’t have Iphones for dinner or laptops for brunch. Lets change the conversation. Its a new decade, and election year, and we have so much to look forward to after COVID. I wish all my fellow specialty store guys the BEST, and yes, better luck next time to big stores! They had a good run!