Tag: recession

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Retailing in a Recession: Part Four

Retailing in a recession

Many retailers closed their doors during the last recession and lately, the economic outlook has been uncertain. Although we have steered clear of another recession to date, we want to give you the tools to succeed in the event there is one. In the final part of our series Retailing in a Recession, we cover how to tailor customer research and merchandise planning to your customer’s needs.

Customer Research Strategies for Retailers in a Recession

Customer research is as easy as asking your clients questions at check out. Below are four questions you should train your employees to ask.

  • Did you find what you need?
  • Did you ask for help finding it?
  • Is there somewhere else you’d expect to find the item?
  • Is there something you want that we don’t ever carry?

These questions help establish different data points including if current offerings are in stock, shows the customers you care, and improves your offerings to better meet their needs.

Merchandise Planning

Customer research can also help determine merchandise planning. In all economic climates, merchandise selling well should stay, and merchandise not selling well should go.

During a recession, retailers should take extra care to plan their merchandise offerings to align with customer needs and preferences. Can merchandise be fixed, rather than shrunk, if productivity is low but headroom is high? And what about merchandise that has high productivity but low headroom? Should it remain?

In summary, some retailers will turn an economic downturn to their advantage. Consider starting with a customer survey using a mix of open- and closed-ended questions to gather both qualitative and quantitative data on preferences.

Inspiration for this post comes from the Harvard Business Review’s Five Rules for Retailing in a Recession. Check out Rule 5: Retool Core Processes for more information on customer research.

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.

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Retailing in a Recession: Part Three

good vs. bad costs

Although we are not currently experiencing a recession, it’s important for retailers to have the tools to succeed in the event of one. In part three of our series, we will discuss what to do if you are faced with the choice of cutting costs or embracing declining margins. Most retailers will naturally look to cut costs, but it’s crucial to determine which ones to go after.

Good vs. Bad Costs

To begin, it’s important to differentiate between good and bad costs. Good costs are those that provide value to your customers, while bad costs add nothing to their experience. However, it’s important to keep in mind that costs are not always clear-cut; cutting costs, such as services, may help in the short term but hurt in the long run if customers choose to shop elsewhere where those services are provided.

Determining bad costs can be difficult, as customer needs are constantly changing, and looking at line items doesn’t necessarily link to what customers want and appreciate about your store. For example, while a clean store is a given for all retailers, one store found that its customers wanted better customer service. In response, the retailer cut its cleaning expenses by 20% and invested that money into customer service training. The result was an increase in customer visits and return on capital.

To summarize, gaining insight is key for retailers looking to manage their expenses. Keep this in mind when faced with the decision of cutting costs. For more information on good vs. bad costs, check out rule number three in the Harvard Business Review’s Five Rules for Retailing in a Recession. Stay tuned for part four of our Retailing in a Recession series next week.

Virtual Fabric Show

Join Benartex designers for the Virtual Fabric Show Spring 2023 on Wednesday, April 26th at 10 a.m. EST. At the event you’ll get a sneak preview of Benartex’s upcoming fabric collections and hear directly from the designers. Register here.

Can’t attend live? Sign up to receive a recording of the event in your inbox.

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.

The post Retailing in a Recession: Part Three appeared first on American Quilt Retailer.

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Retailing in a Recession: Part Two

retailing in a recession

Although we aren’t in a recession, we want to give all retailers the tools to succeed if there is one. In part two of our series, we cover how customers can spend more in your store.

Recession Tip: Find the Needs-Offer Gap

A great way to retail in a recession is to get customers to spend more. Easy right? All you have to do is give them what they want. The challenge lies in figuring out what they want (and no, unfortunately it isn’t more of what you’re already selling). Enter the needs-offer gap.

To identify your needs-offer gap, you’ll need more than data. Unfortunately, data will only tell you what is selling, not what could be selling. However, if you do the work to identify your needs-offer gap your store will reap the benefits.

Take this example. A retailer was experiencing a decline in apparel sales. They could have limited the apparel they were offering and expanded their accessories and handbags (which were selling), but this would have led to over serving. Instead, the retailer looked at why their customers shopped elsewhere for apparel. They found out their customer base wanted “clothing for the right occasions, in the right styles, at the right price, and with the right fit.”

This led to the retailer evaluating their merchandise initiatives. By introducing new brands, offering more wear-to-work options, and expanding mix-and-match basics, the retailers saw their margins improve.

For more information on the needs-offer gap, check out rule number two in the Harvard Business Review’s Five Rules for Retailing in a Recession. And stay tuned next week to learn more on good versus bad costs in part three of our Retailing in a Recession series.

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.

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State of Hiring

hiring

With talks of a recession imminent, many employers are reviewing hiring. Nobody can predict the future but something else can provide context: Data. Read on for some of HireVue’s insights.

Who is HireVue?

First, you’re probably wondering who HireVue is and why their data matters.

To start, HireVue is a company that connects businesses to candidates by providing video interviewing software, conversational AI, and pre-hire assessments.

Now, about their outlook. There are a lot of really smart people who say a recession is imminent and there are other really smart people who don’t think that’s the case.

CEO of HireVue Anthony Reynolds believes “the economy will continue to be strong, if a little wonky.” Below are the data points Reynolds reviewed to come to this conclusion.

Hiring Statistics: Pros

  • There are 2 job openings for every 1 person unemployed
    • These numbers are global and come from HireVue’s 800+ customers
  • HireVue customers sent 17 million chat and text messages
    • Up 1.4 million from last quarter
  • Government hiring has tripled since 2020
    • More specifically, public sector hiring increased 17% since last quarter
  • Skills assessments are up 700,000 from last quarter
    • Compared to only 50,000 last quarter

Hiring Statistics: Cons

  • Interview volume is down slightly from 2.1 to 1.8 million
  • Hourly positions still have a worker shortage

Conclusion

In summary, this blog post could have a completely different tone in Q3, but only time will tell. The past two years have been difficult for all small businesses and yet you’ve remained resilient. What’s a little more to keep us on our toes?

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt 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.