Which Way Will the Wind Blow in 2022?
By Marc Weiss - CEO, Management One
Which way is the wind blowing as we sit on the doorstep of 2022? Gusts, steady breeze, a strong tailwind at our backs, or dark ominous clouds and gale-force winds that make it impossible to move?
Most retailers ended up having excellent years, due to government stimulus, pent-up demand and supply chain disruptions. Supply chain news was amplified by the press and for the first time in my memory, the press was actually a friend to retailers broadcasting scarcity and driving demand without discounts. We are seeing higher inventory turnover and increased margins. For most, a once in a lifetime event.
What then is the forecast for Spring and Fall 2022?
As 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 early sense of uncertainty we felt and experienced. On the other hand, 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 that cannot be forecasted 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, innovating, 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.
Pay attention to your flow of inventory and realize that seasonality is changing and the appetite for fresh and new is constant.
Shoulder seasons in even seasonal locations are diminishing as many people have relocated or are spending more time in resort areas.
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. Use our free scorecard to identify your KEY vendors.
Invest 10 to 15 % of your open-to-buy in tests, and 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 and optimize accordingly.
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 (use the previous link to download our free template).
Seek ways to collaborate with vendors, synergistic partners, your community, colleagues, and customers.
Focus on staying in front of the curve, not tagging along behind it.
You are in a fight to capture market share.
There are tools 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. Retailers who started three to five years ago and are now driving revenue over 10 million dollars a year and profitably. One client expects to do 100 million dollars in the next five years. What side of the fence do you want to sit on? ?
The winds of change are upon us. We can ride it into success or let it blow us off our path.
Onwards and Upwards.
Marc