Home » Blog » Blog » Archives for recession
Bob Phibbs' Retail Sales Blog

Posts Tagged ‘recession’

October Record Decline For Retail Sales – Dining With Disaster

In the New York Times article today, the reporter notes sales were down 4.1% compared to October 2007.  Retail analyst Eric Beder said, “Unless it’s something super-compelling or really necessary, they’re not going to the mall.”

I’ve been to malls in Los Angeles, Seattle, Albany, Richmond as well as the streets of New York and Cancun during October and beg to differ Mr. Beder.  The malls I have been to are full; shoppers are out there.

What’s not out there is anything that could lift our spirits to want to buy.  More signs screaming discount in colors appropriate for going-out-of-business than pre-holiday. More glum employees worried more about their jobs than the person standing in front of them. More restaurant specials dumbing down their offerings.  More talking heads on plasma TVs making a living out of making us fearful of the next shoe to drop.

Is this how to beat a recession?  I don’t think so.  The problem is that people are scared.  We have to find a way for them to get over the fright, not add to it.

You have got to begin by having a compelling vision of what you offer versus the other guy.  You can say personalized service all you want, but the proof as they say, is on the sales floor.

Look, even if traffic is down in your location by let’s say 20%, that still means you still have 80%. You need to reinforce the positives.

I can’t tell you how many times during a downturn I’ve heard business owners proudly telling customers how slow it is.  Why not just put up a sign now, “Going out of business!”  We don’t want to hear more bad news!

And while I’m at it, this would be a perfect time to pull the plug on all those stupid plasma TVs retailers and restaurants have plastered their locations with.  “Feeling bad? We have even more reasons on our plasma screens!” 

Dining With Disaster

Dining With Disaster

When I was in the coffeehouse business we had a guy wanting to put a plasma TV in justifying, “People want to know.” We maintained they didn’t, they wanted as Howard Shultz with Starbucks had said early on, “a third place away from home and work people could be comfortable in.” 

Then came 9/11 – thank goodness we didn’t have plasmas.  People came to the coffeehouse to talk, share and connect, not be frightened further in 20-minute cycles. 

It is up to you, the retailer to lift our spirits. Americans don’t need much encouragement; we just need less Red Bull and more Prozac from everyone. 

Things are playing out and we’ll get out alive to be sure, but all you can control right now, in this minute, is the customer who just walked in.  It’s your four walls – nothing else matters.

Recessions Nurture Bully Bosses And Hurt Productivity

Everyone is scared of losing their job because we are all so over-leveraged on our mortgages, home equity loans, cars and credit cards.  Is now the time to tell your boss your true opinion and share your thoughts?  I say yes but I’m sure most of America will shut up and take it. In good times, you would see this as high turnover but now, the fear of being replaced keeps that in check.

“Need me to work overtime”?  No problem.  ”Take on more work because of ‘downsizing’?”  No problem.  ”Need it done Monday?”  No problem, I’ll skip my kids and work on it all weekend, and the next, and the next. It’s like we’re returning to the 50’s and 60’s when our parents were miserable and enduring long commutes and indignities for the good of the family.

Recessions can bring out the worst in the bully bosses.  Not consciously but its almost a “what can I get away with?” mentality.  It stops bosses from looking at employees as people. Instead they are a source for cost-savings.

The problem is you end up with “Emperor’s New Clothes” management.  No one wants to rock the boat. No one wants to admit it is a wrong direction.  So no one feels appreciated, empowered or connected to his or her job.

And while they may indeed hang on, we’ve seen after the job market goes through a downturn and starts to rebuild, the best jump ship quickly.

Management looks around stunned that their brightest quit.  They are left with more “yes” people and the company never turns around.

How to keep it from happening to your business?  If you are the boss, it is up to you to continually connect with your employees first as a person, and then as an employee.  That means respecting their abilities and going out of your way to encourage dialogue without shutting them down.  While a boss can do the job of two people, they can’t BE two people.  You need conflicting ideas to be able to find new ways of doing things.

My advice if you are an employee – don’t let them get away with it.  Find a way to connect to your boss as a person too.  He or she is just as worried about their job too.  Or maybe they have a sick mother or a child on drugs, just like some of your friends.  

While the quickest way to build loyalty in your employees is to humanize the way you look at them, the quickest way to disarm the bullies is to humanize them in your mind.  

Don’t make the mistake so many companies both large and small will make by letting the bullies rule – it will make you uncompetitive and a rotten place to work.

Be Obama, Not McCain With Your Marketing

Barak Obama and John McCain  

(This post is not meant to pick on any one candidate or party but illustrate a business point.)

They are already talking about an Obama victory and outlining his strategy: Obama kept one message. His team met each day to brainstorm how else they could drive home the message “the change we need.”  McCain kept looking for something, anything to get attention. Often it was piggybacking on something Obama said, an acquaintance he had or a vote he’d cast.

In the end it appears Obama was cool and collected at delivering a consistent economic message.  McCain seemed to look desperate as the presidency slipped through his fingers. 

My guess is we’ll read more stories of how the people running the campaign banked on the words, “country first” and “maverick” but in the end, what did that mean?  How did it resonate with people other than the party faithful?  Not enough.

My point in this post is that you have got to be thinking what message you want to put out to your customers.  Is it that you have “better products, better service”?  That’s not much different than “maverick.”  It’s too generic and the fact you are calling yourself that usually means you aren’t. For example, seen a hotel that touts “clean rooms,” do you trust that claim? I don’t. We already assume it is clean – why are you telling us that?

What is the compelling reason anyone should shop with you?  If you can’t answer that, you are bound to bounce from discounts to coupons, to any of a 100 poor ways to attract money to your register.  Desperate times do not require desperate measures.

Yes, in this recessionary economy, people will undoubtedly revert to coupons and discounts.  They’ll hear it from the “experts.’ What a huge mistake. 

Guess what?  There are cheap people out there.  And you’ll get them.  But they won’t give you a profit. And once you become a discount whore, you often, just like a prostitute, get trapped in a lifestyle you can’t pull yourself out of. 

For example, if $100 off coupons got people in your doors last year but it didn’t work this year, you are probably tempted to make it $150.  The problem is you are destroying the actual price of the item. 

Case in point, last month Chrysler who is going through a particularly devastating downward spiral, advertised all Ram trucks at 40% off sticker price in September.  At that point, their dealers can no longer can say this truck is worth $35,000 when it went for $21,000 .  And what did that do to their used truck market? 

No wonder the automotive business is in the tank. Customers aren’t stupid – they’re waiting for what other desperate measures they’ll take to get us in the showroom.  And when the auto manufacturers combine large discounts with 0% financing, we’ll step in the dealerships again.  The only thing missing will be the profits to balance out the giveaways. Downward spiral indeed.

You have got to get the customers to pay what is needed to make your nut each month plus a salary for yourself.  I get so mad when I hear economists saying small businesses have to “hold the line” on price increases.  What a bunch of baloney.  Really.

How is Jane’s Espresso Shop supposed to pay the bills if she can’t recoup the costs to operate her business?  Take out an equity loan?  She’s already done that talking heads.  That’s only prolonged the agony.  She has got to know her food cost percentages, labor percentages and profit percentages; otherwise she is a mini-welfare agency giving everything away. And we have a lot of them out there right now. Backs against the wall they have every reason to be scared of failing.

Struggling business owners, you have to honestly look at your numbers.  If you want my seven indicators of a business’ health – send me an email and I’ll send it to you for free.  It’s going to be part of my do-it-yourself business makeover system debuting in January 2009, but you can see it now. In the meantime, here are my seven thoughts on why coupons don’t work. 

Retailing In A Recession: There Is Good News Out There

After you sift through Reuters five paragraphs yesterday reporting how the US Commerce Department’s latest figures proves how awful retail sales were off in July (mainly due to autos,) you find that sales at department stores and other general merchandise stores rose 0.3%. Sales at furniture stores, hurt by the slump in housing, rose 1% in July.

The news isn’t all bad; you just have to look for the silver lining. Stay focused and brace yourselves for the pundits to predict a horrible back-to-school and holiday.  If there is something to fear – they’ll find a way to attach it to retail.

Hopefully, the sales numbers will continue to prove them wrong, even if the encouraging news is buried several paragraphs down the page. 

Retail Sales Increase For May Defies Experts

May retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased 1.0 percent seasonally adjusted from the previous month. 



That’s DOUBLE the growth economists expected.

WOW! Maybe the economy really isn’t as bad as we continue to be told. Maybe those economic stimulus checks so highly derided worked. Maybe shoppers are just sick of worrying and are returning to normalcy.

As each month of 2008 proceeds, the doom and gloom-sayers are upset their dire predictions from 2007 haven’t come to pass.  The talking heads continue to say, “Well yes, but this doesn’t prove anything, wait until (new fear) happens.” We’re now halfway into 2008 – there is no recession.

Yes, there are some real issues facing our sales efforts worldwide.  Our economic lifestyle is being manipulated back and forth both with speculators in the oil markets as well as an ongoing pessimistic attitude from the media.  If the pundits were employees, they would have been fired from your store long ago for attitude.

As Winston Churchill said, “We have nothing to fear but fear itself.”  Go out there and sell something!

Newer Entries »