Diagnosis: Retail Planning Anxiety
By Jim Lewis, CEO Enhanced Retail Solutions LLC
Disclaimer: I am not a psychiatrist, and I don’t play one on TV. Nor am I a rocket scientist, but it doesn’t take one to see that anxiety is at epic levels. I see how the pandemic affected my kids and how long it is taking them to get back to “normal”. I see it in family members and friends, how their behavior and viewpoints have changed. That is normal through aging, but with everything going on in the world today it seems to be accelerating.
Retail and Wholesale Anxiety
That anxiety certainly plays out in the workforce. Retail and wholesale have always been pressure cooker jobs. Add more anxiety on top of that and you have a recipe for unpredictable decision making. Decisions should be made on the data- not emotion. But that isn’t happening right now at many retailers.
I get it. Wall Street and Private Equity owners are adding pressure and brushing off the effects of the pandemic and supply chain issues. Their job is to squeeze every dollar out of the store, and they don’t care how it happens. It takes time for a retailer to change, and they don’t want to wait. All this pressure at the top trickles down through management and lands at the feet of the buyer.
I know because I have been there. So many things are uncontrollable, yet you are the one accountable. The fundamentals don’t change. Stay in business on your key sku’s to keep the lights on and find new items that will draw consumers to your store rather than your competitor’s. Easier said than done.
The Re-curing Cycle
Buyers can have big egos (myself included). Their big new program will save the business. But what if the big bet doesn’t pay off? Just wait a little longer- it’s taking the consumer more time to realize how great it is. Spoiler alert: it never gets better. And now your dollars are tied up in slow moving product. There’s no open to buy. Management isn’t budging so you can’t even buy those key sku’s that keep the lights on. It’s a recipe for disaster and it’s happening right now at several retailers.
How does the cycle get broken? The blame game commences, and faces are changed. Buyers get conservative and afraid to make decisions. Wholesalers are left with inventory that has been committed to but has no home. The buyer-supplier “partnership” breaks down. The whole thing is not easy to deal with financially or psychologically.
Not to worry. There are plenty of healthy retailers out there. They are making sane inventory decisions based on data and meet the consumer at any level they want. They must be seeing really good therapists.