Embracing Change While Holding onto What Matters Most
In 2006 we had access to data collected by a remarkable economist. It was a leading indicator of our stores. Our results trailed by 2 to three months. It provided a level of confidence at the time, but other than that was not anything we could use. Then came April 2007, and the data was showing a slowdown. We could not put our finger on it at the time, but the Great Recession was looming. For the first time in M1 history up to that date, we started to pull back on the sales and inventory forecasts for fall and holiday 2007/2008 and early spring 2008. We got a lot of blowback from our Retail Experts and clients. The only mistake was we did not see the severity of the drops.
In December of 2007, I wondered what clients would sell in January. From that moment until September 2010, business was flat to down. Indie retailers did business by focusing on classifications that were turning profitably. Then October 2010 arrived and business started to light up.
Morgan Housel just released a new book called “Same as Ever: A Guide to What Never Changes”. He is a spectacular storyteller and this is a great read. In the book, he focuses on the things that stay the same. No one can predict a pandemic, a war, and apparently even a recession. However, if we focus on what stays the same we can navigate and be prepared.
There is a great quote in the book from Amazon Founder Jeff Bezos who said he is often asked what is going to change in the next ten years. “I almost never get the question; ‘what’s not going to change in the next ten years’. And I submit to you that the second is more important than the first.”
By knowing what is not going to change you can better shape your future. Amazon cannot imagine a future where customers do not want low prices and fast delivery, so that is where they invest.
For indie retailers, the great lesson from Covid was despite the enormous growth of e-commerce during the pandemic, once the shutdowns ended their customers flocked back in droves. As Morgan Housel writes, we can invest in our futures by understanding the things that never change. For indie retailers that is the bond and relationships they have built over the years.
What are the things your customers love from you? Invest in those and your future is not controlled by the latest economic news, but rather by the work you do in knowing what is important to your customers and acting on it.
The economist stopped collecting that data and though I have constantly sought after other attributes, I have discovered that following the results of our massive database of clients has always been the most meaningful. What they do stays the same.
Although the world is constantly changing, and adapting to change is part of survival, knowing what does not change is also important to your strategy.
Wishing you all a very happy and healthy holiday season.
Onwards, and Upwards,
Marc Weiss - Co-founder, Management One