By Gordon Hecht, Serta Simmons Bedding
In 1913 Eleanor H. Porter wrote an endearing and enduring novel centering on the title character, Pollyanna Whittier, an 11-year-old orphan with unwavering optimism.
Pollyanna’s philosophy of life was what she called “The Glad Game” — to look for the positive side, no matter what. Unfortunately, this was not a year to be a Pollyanna and this article is not about unicorns and rainbows.
You would be in a small minority if 2020 has not been the most challenging business year in your memory. It probably started out OK for you until March came in like a lion and left like an angry lion. We’ve seen temporary shutdowns turn into long-term restrictions, and shortages on everything from toilet paper to rice cakes and from refrigerators to hot tubs.
Most of all, we’ve struggled with a broken supply chain and a diminished work force in our stores, factories and the places we shopped. Vacations and celebrations have been cancelled. Even simple pleasures like dinner and a movie have been reduced to DiGiorno and Netflix.
As we roll towards Thanksgiving Day it’s hard to find bright spots for which to be thankful. 2020 has treated us like the college fraternity pledge who gets a merciless paddling and cries out, “Thank you sir, may I have another?”
Here are some of the hard lessons this year has taught us:
Our Retail World Has Changed. Gone are the days of spontaneous shopping trips, browsing store-to-store. Gone are the days of yellow pages, newspaper advertising and most broadcast TV ads for retail. They had been slipping for years and 2020 just gave the transition a kick in the pants.
There is no absolute data, but the majority of your shoppers are going online to shop before setting out. Even Mee-maw and Pawpaw are flipping open their phones to shop. Your website is the first front door your customer enters, so it better be clean, active and current. Since you wouldn’t open a store without a sales desk or register, having e-commerce capabilities is mandatory; it’s no longer an option. Not everyone is tech savvy, but thankfully today there are more low-cost options to farm out the management of your website.
If You Got it, You’ll Sell It. In January 2020 I could have listed 20 reasons why you want limited inventory. Between the cost, the shrinkage, the damage and the obsolescence, you’d be better off putting your inventory in a savings account at 0.9 percent interest. This COVID thing and the ripple effects on merchandise and material has changed my thinking.
Holding inventory costs you 3 percent a month but not having inventory costs you 100 percent of every potential sale. Plan on doubling your stock orders starting today and continuing through March 2021 (at a minimum). Silly as it seems, that means you need to order your President’s Day (Feb. 15, 2021) inventory now! Order twice as much as you think you will need. Your packed warehouse in January will make you fat, happy and thankful in March.
Your Business is a Three-Legged Stool. The three legs of retail are Your Customers, Your Employees and Your Investors (even if you are the only investor). Your business can be very stable and sturdy so long as all three legs are strong, secure and of equal length. Cut one short or chop it off and things get tippy.
When your advertising, inventory, sales and service practices are focused on your customer, that leg will remain solid, especially when you constantly adjust those practices and policies to the current business climate.
Your investors expect to see a return on the funds they provide. That return comes from your profit. Smart investors need to consider long-term sustainability over short-term gains. Paying your investors with bad profits — earned from short-sighted layoffs, service reductions or aggravating hidden extra costs — may make them happy this quarter, but risks the viability and growth potential your business needs.
The third leg comprises the people who work for you. 2020 saw many employees leave due to short-term government assistance and long-term health concerns. Maintaining a loyal sales and operations team is like maintaining a loyal customer base: you need to treat them right, give them good value, communicate often (BTW, communication is a two-way thing), and let them know they are appreciated. And just like customers, when an employee is disruptive or unscrupulous, you may need to invite them to go elsewhere.
We take time away from business this Thursday and celebrate a unique American tradition. We are thankful for the family and the bounty we share with them. And know this: the lessons of 2020 are bitter and came in an ugly package. Having the ability to acknowledge them, learn from them and prepare for them is something else to be thankful for.
Gordon Hecht is Senior Regional Manager/Strategic Retail Group at Serta Simmons Bedding and a regular contributor to YSN. You can reach him at email@example.com.