Be Ready To Navigate Recovery Month By Month
Monday July 25th, 2011 - 8:54AM
These are shortcuts to your favorite social networking and bookmark sites. Add this story to your Facebook page, del.icio.us, DiggIt, and many others!
With a week to go in July, at the time of this writing, we’re all curious how retail sales for the month will compare to the expectation-beating June totals reported by many chains following a sluggish May.
If there’s one thing we’ve learned in this hesitant recovery, it’s to not relax after a month of solid sales. Nor should anyone panic after a month when sales soften.
Shift On The Fly
Drawing a median through the retail sales peaks and valleys of the past 12-plus months would reveal an economically legitimate incline.
Try telling that to antsy stockholders, though, when same-store sales for any given month fail to measure up against the previous year and you’ve exhausted every explanation from cloudy skies to the price of gasoline.
Truth is, business is better. It’s just harder to predict.
And that’s the maddening dilemma for a retail business so bent on hedging inventory levels that shifting on the fly month to month is a grind, especially during sudden upswings.
Sales data no longer seems to correspond consistently to reported consumer confidence levels. With so much nerve-wracking social, political and economic stimuli streaming in from all directions, consumers might be getting used to a generally pessimistic outlook. So, that view might become less likely to block people from buying stuff when they need it or when they want to spoil themselves a bit to feel a little more… yes, confident.
Shoppers are releasing pent-up demand on their own terms and at their own pace. Discretionary consumer spending cycles have abandoned their traditional regularity, and that’s in direct conflict with a retail industry averse to the mounting cost these days of flexibility.
The July 25, 2011, issue of HomeWorld Business showcases our 12th annual Impact Merchants, an accomplished group of housewares retailing decision makers nominated by vendors based on their sales growth initiatives, trend vision, product attentiveness, responsive communication, negotiating savvy and more.
It’s important to recognize the impact of innovative merchants. But it’s merely recognition if such impact can’t be sustained. Will this year’s nominees and their peers have the agility and traction to continue to steer their vendors, their managers, their shareholders and their customers through the uneven terrain of the recovery?
There are no shortcuts in today’s retail climate. Retail buyers and merchandise managers must be greedier for the expansive reserve of market information available to them. Yet they should be wary of over-analysis and free to go with their gut more often, sometimes against the dispassionate logic of spreadsheets.
Try not to white-knuckle the steep slopes and sharp curves of this recovery. Just try to be better prepared for anything that might crop up around the bend. You’ll be less inclined to over-accelerate when the road appears open and less likely to have to slam the brakes when unexpected obstacles appear.
The true measure of impact by merchants in this stop-and-go economy is how they balance pre-action with reaction. The most flexible will be better positioned to gear up if and when the recovery hits that straightaway.
But don’t look past August.
Dissecting what Ron Johnson got wrong during his brief, calamitous term at the helm of J.C. Penney is sure to be the focal point of retail strategy and tactics lessons for years to come. But Penney’s future could still hinge to some extent on what he got right.