Fortunately for now we are not in a recession. But as we heed the warning signs of an economic slowdown, we thought it worthwhile to visit how to retail in one.
Identify Headroom
The first rule of retailing in a recession is to protect your most loyal customers. However, if your loyal customers cut their spending, that means they’ll also spend less in your store. Enter, headroom.
Headroom is defined as “market share you don’t have minus market share you won’t get,” or in other words, switchers. Switchers are customers who aren’t loyal to your store, but aren’t loyal to your competitors either.
There is no single way to measure headroom. The best place to start is to identify switchers. For example, a camera store categorized customers based off their knowledge, level of service required, and product sophistication. By determining what your switchers like about your competitors, you can make the necessary adjustments in your store to fulfill their needs, thus increasing your market share.
For more information, check out the Harvard Business Review’s Five Rules for Retailing in a Recession. And stay tuned next week for more on Retailing in a Recession.
h+h Americas
In other news, join Creative Retailer as we exhibit at the premier tradeshow, h+h Americas, hosted in Chicago, IL June 21-23!
At the event, you’ll have the opportunity to join the booth hop, network with new and familiar faces (Thursday, June 22nd at noon), and watch Heidi Kaisand give a session on the main stage Friday, June 23rd at 1:30 p.m. CST.
Use this link for a free ticket ($55 value) and stay tuned for more details.
If you’re looking for more information to guide you in owning a retail business, subscribe to Creative Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.
