Ding Ding - Is Retail Really On The Ropes - Here's a Few Ideas From Your Corner.

A New Year looms, for many it feels like 'Groundhog Day' version 3.

It's a 'Deja Vu' moment in retail for sure.

All manner of businesses are pondering their future survival as we enter into 2022. What seems like what's been the retail boxing match of the century let's take a look at the chaos of the last quarter of 2021 along with the ongoing supply chain debacle and further consumer issues that the retail sector has to ponder on top of all the other 'financial' plate spinning initiatives.

According to the Resolution Foundation, millions of families are facing a "cost-of-living catastrophe" in 2022.

It says a 1.25% increase in National Insurance contributions will cost the average household ￡600 a year while the higher energy bills cap is expected to add an additional ￡500 to spending. Both will come into force in April.?Source BBC December 2021

So, is this yet another anxiety ridden headline on top of everything else retail has had to deal with that will further suppress consumer appetite whilst continuing to enforce major shifts in consumer behaviour?

A combination of clearing as much seasonal stock during this final hurdle in the retail year has always been the key driver behind the 'January Sales' which historically seemed to happen earlier and earlier in December resulting in hard working retail employees having to gear up for the 'Boxing Day' Sales.

In the final quarter of 2021 an unhealthy combination of ongoing supply chain and delivery logistics worries combined with increased Covid (Omicron) restrictions in the run up to and most likely after the festive season has managed to drive even further changes in consumer behaviour with footfall and sales being further suppressed.

Just as footfall and the spirit of Christmas looked like it was returning to the high street and associated business sectors (including hospitality) yet another 'Grinch' Covid variant arrived to dampen optimism for businesses everywhere.?

A unhealthy combination of ongoing supply chain and delivery logistics worries, combined with increased Covid restrictions in the run up to the festive season managed to drive even further enforced changes in consumer behaviour.

We all recognise that this years 'January Sales' will be like no other because retailers in every channel are now sat with mountains of stock, most of which should have been sold in December.

For many huge supply chain issues are resulting in ongoing delays of seasonal stock deliveries which is adding to the warehouse and balance sheet burden.

The pressure on the retail commercial, merchandising, and buying teams is immense as the term 'open to buy' is being heard in very few places these days.

The surge to maintain cash-flow has overridden protection of margin as retail tries to keep itself afloat and be ready to survive what is historically the leanest of times in January thru to March - however with the backdrop of Covid, more 'waves' and the looming threat of another lockdown by stealth has seen consumers that have disposable cash at hand the ones to benefit from deal after deal, and all this on top of even more retailers going into administration.

It's a sad series of ongoing facts for those desperate for a 'silver bullet' that might just save them, or at least delay the inevitable.

The most agile of operators will already have had plans in place to deal with many of the above, but what about those behemoths of retail who have just spent the best part of the last 2 years turning the operating model around?

My view is to remain laser focused on what you can do and what you can control - not what you can't.

Get laser focused on leveraging everyone of your 'changemakers' to come up with as many no-cost, lo-cost, ways to move that mountain of stock that will simply erode the balance sheet further, no idea should be off the table no matter how uncomfortable it might seem - this is the digital age and there are people out there who will take commercial advantage of this opportunity so you need to start thinking "what might they be doing that we should"?

Growth, your agility and ability to deliver it at speed will make a key difference to your short, and medium to longer term sustainability.

The time to act is now, but before you get ahead of yourself and start dropping 'tech/digital' solutions into everything you need to remain focused on where the value is to the consumer in the first instance - cash saving exercises are also useful but if you have no customers what cash are you actually saving, so ensure your bias is towards revenue generation?

In the next 30 days CEOs should ask their business leaders and other 'changemakers' to assess how the needs and behaviors of their customers and the commercial environment continue to change by benchmarking their digital channels and operating model against those of their competition or closest disrupter.

TIP: If you view your competitor as an extension of your internal 'change team' it will help highlight and hopefully uncover previously unexplored opportunities.

I'm not saying you should become your competitor, but if you don't understand how they are taking business from you then why are they even classed as a competitor?

This information should form the basis of a renewed operating agenda that should take no longer than 15 - 30 days to establish.

Pre-Covid the 'journey'?tended to be biased towards the internal goals of the company, today this needs to take an even greater customer bias in order the experience is one that amazes and encourages advocacy.

Many employees are already working fully remotely and are agile to some degree because they no longer have that silly commute you thought was vital.?