We’ve all read the forecasts (and actual reality) of tightening consumer spend, and its flow-on negative effect on retailers. I can probably foretell the future based on having experienced a few recessions over the past 3-4 decades. Given that the retail landscape has many varying vantage points, I am going to offer a high level view of the 2 (of many) main ways I’ve usually see retailers play this out.
1. I recall in my early twenties, as an aspiring young trainer working for one of the most prominent clothing retailers in Australia. We entered a phase of decline in consumer spending (circa 1982/83?) - I recall the almost hysteria type reaction as it worked its way throughout the business. And guess what, they were right - it hit hard - we knew it would - life truly is a self fulfilling prophecy.
2. Fast forward 10 or so years and replay the same scenario. Same retail vertical. I have my first client of 2-years -Tom Tsipris, owner of Surf Dive ’N Ski and General Pants Co at the time (circa early 1990’s). Rather than go with the trend to freeze training spend, Tom increased it! We trained the frontliners in sales skills, we prepped Managers for driving customer focus, and coaching their teams. Manager’s workshops became monthly. Did they survive? NO … they THRIVED!!! And this is just one example of many.
I am all for reducing waste at ALL times, not just when things are tough. One of the most horrific
wastes I see is lost sales due to untrained, and/or exhausted teams. How we manage the coming times will determine how we fair during “winter”. To quote a late 2020 HBR article, ‘a study of companies’ performance during and after the past several recessions, 17 % didn’t survive (because they filed for bankruptcy, were acquired, or went private), and of those that did, the vast majority — 80% — were still struggling three y
ears later to match their pre-recession growth. Only 9% of surviving companies ‘roared out of the recession,’ posting results that exceeded both their peers and their pre-recession performance.”
So, which path will we choose? *See clip
1. FEAR Based or 2. PREPARED
Business is the only arena, that during tough times, we make it HARDER for our frontline teams in the field to perform. We retard their ability to play their best game at the most crucial moments - quite simply, its crazy! Imagine a sports team STOPPING training & coaching when they were top of the score board, let alone if they were struggling.
At a time when STAFF TURNOVER is at an all time high, by abandoning our frontlines now, we’re
going to give them even more reason to leave - not only our business, but the industry as a whole.
“Winter is coming!” does NOT mean we starve the the people who keep the fires burning. Customers WILL still spend - BUT, they will be far more discerning. I hope your business will be one of the 9% who grabs the many opportunities that lay ahead. There may not be as many customers frequenting our stores so let’s make sure the ones that do receive the most outstanding experience possible!