Recent headlines offer rare opportunities for resourceful retailers
By Gordon Hecht, YSN Contributor
It’s getting more difficult these days to tell if news stories are coming from The Wall Street Journal, your local Picayune or the National Enquirer. The stories that occupy the front page or top of your touchscreen get stranger every day.
Bad news seems to always take the lead. But we of The Retail World are optimists and are urgent to look for the argent lining in every report.
Here are a few headlines from the past few weeks that will surely affect your business:
“National Furniture, Mattress and Appliance Chain Closing Stores”
I can’t reveal the name of the retailer that declared bankruptcy, but it may have been a con job on its investors. By the end of 2024 it will shutter around 500 storefronts.
In a sports analogy, it would be the same as the Kansas City Chiefs and Philadelphia Eagles closing down their football operations. Hundreds of key players and two prime locations up for grabs.
If you do business in the South or Southeast, you now have access to around 15,000 seasoned professionals looking for jobs. Managers, salespeople and delivery/warehouse staff are all looking for permanent positions.
It hurts to think about the Eagles quarterback looking for a job. You wouldn’t stand pat if the Chiefs QB was looking for his next role. But you can’t just hope and dream that people will come to your shop either.
It’s a great time to recruit them today.
The other plus for you is the 500 storefronts now open for leasing. Commercial real estate market prices are higher than front-row Taylor Swift tickets. This mini glut on the market can potentially depress the prices. That means it’s an ideal time to expand your empire.
“Fed Up to Lowering Rates”
From what I remember from taking econ 101 at Tumbleweed Tech, interest rates are governed by the Fed, shorthand for the Federal Reserve Board.
The chairman of the Fed is kinda like actor Frank Morgan, who played Professor Marvel and The Great and Powerful Oz in 1939’s “The Wizard of Oz.” The chairman can raise and lower the interest rates for banks, which trickles down to the financing costs we all pay. No one at the Fed seems to have had the heart, courage or smarts to see how the higher costs squeeze your business.
This month Toto and Dorothy are pulling back the curtains and the Fed signaled that we would see a drop in interest rates. There will be a triple-fold bonus to you.
Primarily, a drop in rates means a drop in mortgage interest cost. Simply stated, it will be less costly to buy a home. More people will be looking to upgrade and more “starter” homes will become available.
People who move need furniture, mattresses and appliances. In fact, it’s the No. 1 reason they buy the merchandise we sell.
If you are looking to expand your business, the cost of funding it will drop. Cheaper money coupled with lower store leasing costs equals a winner for you.
Consumer finance costs will also fall. If you like to promote zero-percent financing, your friends at the bank will be taking a smaller cut.
“Consumers Delay Basic Auto Maintenance”
Ever since me and my ever-lovin’ bride moved to Del Boca Vista (Phase III), we have been taking our vehicles to the local Mr. Goodshaft dealership for service. Sure, we pay a little more, but they have free Folger’s coffee and Lance’s cheese crackers with peanut butter in the waiting room. It’s a first-class operation.
They sent an email blast this week: customers can now spread the cost of an oil change over four monthly payments.
The service runs about a C-note if you can say “no” to all the extras they try to pile on. It doesn’t seem like a lot of dough these days. But the shop recognizes that some of its loyal customers just don’t have the extra bucks to spare. They simply charge your credit card 25% of the total when you check out, and 25% a month for the next three months.
It takes the hassle, fear and stress out of the purchase.
Your shoppers probably experience the same things. They want and need to buy your products. But they don’t have the funds ready in the bank and don’t want a big credit hassle.
Short-term financing will be big for the rest of 2024. Six months is just enough to get past the election, holidays and tax time. Simply promoting free financing through February 2025 may be your ticket out of the sales doldrums.
“Black Friday 2024 Will Be a Record Breaker”
It was so hot the other week that the Halloween candy was melting at our local Wally World store. Black Friday is two months away and the promotions will start before you know it.
By early November that election thing will be over, interest rates will be lower and people will be moving into new homes before the December holidays.
Although it is a time for peace, you need to prepare for the retail war. Stock the barn with hot-buy merchandise. Spend double or more of your advertising budget. Tack on short-term finance or cash discounts.
If you are a retailer that closes on Sunday, plan to open for two of them surrounding Black Friday. There’s just no reason not to.
It’s been difficult the last few years for retail warriors. Plan for a strong finish to 2024 and look for good news in 2025.
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.
