The tea leaves are looking mighty green for the New Year
By Gordon Hecht, YSN Contributor
With just a handful of days left in the wild carnival ride called 2021, it’s time for me to unveil my predictions for 2022.
Over the last few years, I’ve had a better track record than the National Enquirer (“Two-Headed Chicken Marries NBA Star!”) and Weekly World News (“Martian Wins America’s Got Talent”) combined. So let’s see what the New Year will bring…
Grazing in the Grass is a Gas
You’ll see fuel prices go up this winter and stay high through Memorial Day. You simply cannot afford free delivery anymore. It’s probably costing you $59 to $129 in true cost per stop. If you can’t collect that from your shoppers, try getting something to reduce your expense; even a $19.95 fuel charge will help your bottom line. Gas prices are posted outside every filling station and most consumers use that as a guideline to measure inflation. Your shoppers know the cost and will have little resistance to a delivery charge.
The supply chain has already started to recover in many industries, although last week my local Staples ran out of paper, my local Walmart was out of Dr Pepper, and I still can’t find my favorite caramel rice cakes at Aldi’s. That aside, I predict we will no longer see long and deep delays on most products, and more industry will return to the U.S. and North America. Keep a three- or four-week inventory of your best sellers in the barn and you’ll be fine in 2022.
Hello, I Must Be Going
Your staffing will be hit with the Great Migration, the Great Resignation, or both in 2022. Over the past two years over a million people have relocated from high cost/high tax states to lower cost areas. Add to that the 3 percent of workers who are resigning or changing jobs each month. In one month alone this year, 4.3 million Americans told their bosses “I quit.” Recruiting and retention will continue to be a significant challenge in our retail world. Money isn’t always the answer. It’s time to look at store hours and schedules, time off, tuition reimbursement, and most of all, your leadership team. After all, people don’t quit jobs, they quit people.
Pump Up the Volume
I can’t predict how many units you will sell in 2022, but I’ll give you 7-to-5 that each unit will cost more. Let’s face it: things are going to be more expensive next year. Suppliers of transportation, raw materials, manufacturing, and some government services are not shy about raising prices, and you shouldn’t be shy either. Be judicious and fair, but still allow yourself to make a few bucks.
Here’s some bright news: In 2022 your shoppers who are trading in are also trading up. People are more willing to pay more for more features, comfort, luxury, and ease. Draw your line in the sand on the bottom price that you are willing to display on your sales floor. In the mattress business you might not have room for that $499 queen on your display floor anymore when you can show and sell $1,499 just as often. You can’t be everything to everybody. When your competition goes low, you can go high.
Easy Like Sunday Morning
Chik-fil-A and Hobby Lobby have got it figured out: Let’s close on Sunday. We may lose some business, but our employees will love the extra day off and stay longer, and we’ll have reduced turnover and training costs. I predict that you’ll see more retailers close on certain days, and many will shorten evening hours. Fewer hours mean reduced staffing, lower energy costs and less burnout.
Hit Me with Your Best Shot
If you are like me and started your career in a year that begins with 19, you probably believe you’ve seen it all. However, as in the words of Randy Bachman, “You ain’t seen nothing yet.” I predict that 2022 will have a surprise hurdle for all of us to overcome. The cool thing is that if you are reading this column, you are a survivor. I predict that you will find new bridges and workarounds when 2022 fires away.
Gordon Hecht is a business growth and development consultant to the retail home furnishings industry and a regular contributor to YSN. You can reach him at Gordon.Hecht@aol.com.