By Dave Workman, President & CEO of ProSource
No one can accurately predict if – or when – there might be a downturn in the economy. Indicators look good once the trade conflicts are resolved, so let’s stay positive. Regardless of any ifs or whens, it is always prescient for retailers to position themselves to withstand any negative market conditions. Set a game plan covering everything from streamlining inventory to positioning yourself to take market share in the event of a tightening economic environment. Let me give you some of my thoughts and advice.
In the unlikely event of a downturn, manufacturers often find themselves with excess inventory – the complexities of supply chains make it difficult to shut down production levels in a timely fashion. And that means deals that you can take advantage of in order to maximize GP.
But first, you need to be in a position to take advantage of any promo buy-ins. So, the first order of business is to review your current inventory and reduce those SKUs that are underperforming. Do this now. As a general practice, you want to always consider your inventory position in order to take advantage of special pricing opportunities.
Another timely reminder is to take a look at your current physical presence. Are there areas in your store that need a tweak, can you improve on how merchandise is displayed, and/or are there obvious improvements you can incorporate to heighten customer engagement that doesn’t require a heavy up-front investment? Do this now. Regardless of the economy, every retailer has to be on top of their game to win customer loyalty. In a buyer’s market, consumers can afford to be picky.
And perhaps most importantly, your sales staff needs to be at the top of their game as well. Focus training and product education on the merchandize and services you excel at. Focus on your strengths.
Money in the bank
Paring of inventory and a significant effort to focus on profitable SKUs will result in an increase to your bottom line. Being proactive affords you the opportunity to pay down debt. Paying down debt puts you in the position to take advantage of promo pricing opportunities and puts less strain on your company in a down market. Do this now. In order to take market share, you need a healthy bank account in order to drive your business to further success.
It is always healthy to review your inventory and SKU lineup. Equally so, a proactive retailer is constantly tinkering with showroom layouts, engaging customers with innovative and informative event marketing, and maintaining a healthy bottom line. Anytime is the right time to get back to the basics. Do it now.
YSN is published by BrandSource parent company AVB Inc.