Customers have become very tentative and “prone to thrift”, as the economists say. As the economy reopens, the lowered sales demand drastically reduced inventory levels.
- However, as the inventory quantity is reduced, the new imperative is the mix of merchandise.
- Discretionary spending will lag; retailers must expand and feature the basics, the “never-outs,” like never before.
Here are our BIG PICTURE thoughts on the stages that might unfold.
- Total inventory levels must be reduced, especially at first, and then grow over time as sales levels return.
- Importantly, the MIX of merchandise must change. Significantly!