Outcalt & Johnson: Retail Strategists, LLC

Artful Idea for Retention Bonus

8/8/2022

When asked "How many people work for you these days?", one owner we know responded, "Oh, about half of them."

Hopefully you don't share that same lament.

But, most retailers know all too well the challenges and high costs of competing for talented employees.

And, keeping staff – versus dealing with constant turnover – is even more important. Especially to your bottom line.

So we were intrigued by this report in CNN Travel*:

Germany's Ruby Hotels, which has 16 properties across Europe, is offering new recruits up to €500 ($511) to get a new tattoo, piercing or haircut once they reach six months of employment.

The Clock Is Ticking. Watch Out!

7/25/2022

One of the real killers of a retail business can be debt. But, how much is too much?

Debt can be quite stealthy as it grows.

Seemingly small expense increases add up in the aggregate – maintenance costs, security, advertising, utilities, payroll, e-commerce charges, etc.
Vendors may be eager to offer terms, but that too is more debt. Whether or not you pay interest on it, you still are obligated to pay. And vendors would rather have an accounts receivable from you – it's an asset for them – and a debt for you.

Especially in these times of increasing interest rates, creeping expansion of debt can quickly snowball into a much larger problem.

From the Benchmark pages on The ROI site, we have selected four retail verticals whose Debt-to-Worth ratio shows a frightening situation. The technical term we would use is "spooky, real spooky."

(Click on each chart to see all the key ratios for that vertical.)

Is 2022 Really That Confounding?

7/18/2022

Embracing Uncertainty: The Essence of Retailing

"The mantra of 2022 should really be: No one knows anything," opined a business reporter*. "It’s stunning how little we understand about how the pandemic has changed our lives and our country. It’s not clear whether the U.S. economy is hot or not, or if big cities will be forever scarred."

"The future of our online shopping habits is another unknown. This is not just a nerdy debate. Our collective buying behavior sways trillion-dollar companies, millions of retail jobs and the health of the U.S. economy."
"The uncertainty about the direction of online shopping is one of the biggest questions facing the tech industry and financial markets right now."

Well yes, of course. The tech industry and the financial markets do prefer predictability. The uncertainties of retailing always have bedeviled them. And now, with Amazon's recent retrenching, backing off some expansion, their crystal balls have turned cloudy.

Enough Already with the Uncontrollables

7/11/2022

A frequent recommendation for how to navigate the current economic uncertainty is to be more diligent about controlling expenses, and focus on profit. (You'll see; we challenge that below.)

Hmm. Concentrating on profits is easier said than done in today's environment, with cost increases proliferating under the umbrella of inflation.

Workers are able to "shop around" for higher wages and benefits.
Shipping costs are increasing.
Fees for online services are increasing.
Transaction costs, from listings to advertising to warehousing to fulfillment for e-commerce services are increasing.

Expecting Judgment from Computer Forecasts? Really?

6/27/2022

"How are sales?" is essentially the international greeting between retailers.

And because of the seasonality of retail sales, most retailers will respond by explaining whether sales this month are up or down versus the same month last year, not just the previous month.

All this is well and fine in a normal year. But, since 2020, retailers have not been experiencing anything close to normal. And boy, does that show up in the 6-month retail sales trend charts that The ROI posts each month.

In sector after sector, December, January & February sales versus the prior year are markedly different than the March-April-May results. In some cases, these are quite dramatic.

Your results are likely to be consistent with these patterns.

Digital-First Retailers Discovering Merits of Physical retailing

6/20/2022

The basic definition of retailing is "selling to the ultimate consumer."

As you know, HOW that is done, and in what location or format, continues to change and evolve.

So, we were intrigued by this recent post on the Shopify Retail Blog: The Future of Physical Retail in a Digital-First World.*

The "retail digital-first world", of course, is either the "pure play e-commerce retailers," those who sell only online, or the "brands" (what we used to call manufacturers) who have embraced the "DTC model," selling direct-to-consumer.
And as you know, Shopify is one of the largest platforms for e-commerce businesses. Definitely a leader of the retail digital-first world.

To us, the blog post was essentially a wide-ranging journey of discovery(and perhaps even some new-found respect for those "physical retailers".)

Be Ready – New Kind of 4th of July Is Coming

6/13/2022

We think this may be a very different 4th of July Holiday weekend.

It will not be just about red, white & blue window displays, or flag waving, or fireworks displays. Instead, there is a new mood, a new attitude that is emerging.

First, we believe that all shoppers are reeling from being swamped by some major and concurrent attention-grabbing events and trends affecting all of us. Seemingly with no end in sight.

"Unprecedented." What? Again??

6/6/2022

Consider these front-page headlines and the accompanying chart (see above) from the June 6 Wall Street Journal* – "Surplus Inventory Piles Up", "Stores Are Stuck with the Wrong Items."

Look at it carefully, and think of your operation in comparison. How do your numbers compare? Are you as shocked as we are?

How did this happen?

Partly as responses to the unprecedented impacts of the pandemic.

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