The start of a New Year is a good time to assess retail trends and where you’ve been and where you want to go. Otherwise, it can be just the same problems, different day.
You have to believe there is more to running a retail store than a paycheck.
Thank your lucky stars you were smart enough to figure retail out – about half a million business owners had to close since the pandemic began.
But surviving isn’t fun…
Let’s look at what didn’t and did happen in 2021 and set a new direction for retail in 2022.
What didn’t happen
Shipaggedon – As much as we were told driver shortages across delivery platforms including Amazon would exceed capacity by as much as 5 million packages per day, UPS and the postal service delivered 99% of their packages on time or with minimal delays. In fact, UPS, FedEx, and the postal service are delivering packages faster now than in the post-Thanksgiving period of 2019.
Store closings – As much as we were told stores were out of style, store openings topped store closings for the first time in five years. And as direct-to-consumer brands realize profits are elusive in an online-only world, they are opening hundreds of stores.
Christmas ruined by supply chain problems – Starting in August we heard, “shop early or you won’t get your gifts on time.” Yes, cars and some expensive niche items are still hard to find because of a shortage of some crucial materials like computer chips. And prices are up for all kinds of goods but in general, products are in stores.
What did happen
Unprecedented demand for goods and services – While they are still crunching the numbers it is clear my predictions of a once-in-a-generation boom this holiday season came true. As of December 24, sales rose 11% compared with the holiday season of 2019. That is huge even if inflation helped pad the numbers a bit.
Online grew – While the perception is everyone ordered online, Mastercard reported online sales made up just 20% of all retail sales in 2021. Remember, many of us were locked down for a quarter of the year so no surprise.
Boomers left the building – The great resignation is coming from the Baby Boomer generation who decided not to risk the anger of being mask police, the changing nature of retail, the health concerns of being so close to the public, and low pay. True, retailers have upped starting wages to $15, but that came too late. Life is short, and there is a renewed interest in travel and spending time with family and friends.
Everyone thinks they can be an entrepreneur – The image of someone who starts up their own business out of their home is very alluring. What many may miss is having an idea no one else does, having the tenacity to see it through - whatever it takes, and developing a routine at home does not come easily. I expect many will return to regular jobs by fall.
Millennials showed up – It wasn’t that long ago we were told Millennials would only rent and never buy a home. Well, they accounted for more than half of all home purchase applications in 2021. Whether to buy as investments, Airbnb, or for themselves, they have supercharged the housing market, and stores that cater to them like home furnishings, hardware, and other businesses are riding the wave.
What needs to change
Looking at employees as interchangeable objects. There’s a reason we’re losing people working in retail as they want an employer who allows flexibility, shows concern for employees and offers fairer compensation. That means you’ll need to improve your recruiting for employees and reward those who exceed at the job.
The days of waiting for the perfect employee to walk through the doors who can work any-and-all hours and weekends while being passionate about helping customers, thirsty for knowledge, and willing to work for peanuts are over.
What needs to change is creating retail crews who know how to interact with a wary public, gain their trust, and be great employees. It is the time of being more human at an increasingly inhuman time.
There is no magic to this. It’s called being brilliant on the basics.
What hasn’t changed
The laws of business: what goes up eventually goes down.
We’re expecting an economic slowdown that will begin the first quarter as Covid spikes again but really gets going in April when parents realize their child tax credit is considered income and they have to pay more taxes, then grows mid-year as pent-up demand recedes.
That said, the Conference Board still predicts U.S. economic growth to be 3.5% in 2022 so don’t get caught up in the-sky-is-falling that the media is bound to pitch.
What are you going to do to prepare?
Are you still in chaos mode? You know, you don’t have time blah, blah, blah, you’re just so busy blah, blah, blah, you can’t find good help blah, blah, blah? All those are excuses to stay stuck.
Only you can stop it.
Setting a new direction for 2022…
Take responsibility for your own actions. Change your “I’m so busy” excuse into “I haven’t made time for that.” Change your “I don’t have time for that” into “I haven’t chosen to make time for that.”
It is a subtle difference but it is one that when you practice it, always reminds you this is a choice you are not making.
Otherwise, you’re lost in the chaos. And chaos mode doesn’t scale.
Every retailer I’ve talked to lately wants expects significant growth in 2022. But like all of us, doing the work creates fear and procrastination.
Don’t confuse procrastination with laziness. It’s not that you don’t want to work, it’s just that you don’t want those feelings of self-doubt, confusion, or frustration as you try new things. You might fail and that feels worse than looking forward to success.
Here’s the thing…
The work you’re avoiding isn’t because it is something you hate but really just something you fear. And the work that needs to be done is often what’s in your best interest.
Instead of looking for someone to pull you out of the river, you need to get upstream and find out why you’re falling in, to begin with.
There are two kinds of stores, two kinds of managers, and two kinds of retail companies: the ones that are going to make it and the ones that are not. Delta, Omicron, and the OMFG variant is next.
Covid is not going away; the only certainty is we're not returning to normal times. A lot of people had great holidays.
Don't pat yourself too much on the back because...pent-up demand will pass.
What should you be looking at right now in terms of retail management? What strategies will keep you growing and learning?
Ultimately, all we can do is stay focused on the future, not the past.
To be open to new things.
And with a smile on your face and a positive direction in your heart, be willing to set a new direction for 2022.
Past fear.
Past procrastination.
I hope you’ll join me.
By
Bob Phibbs
