Articles

Don’t Panic.

The sky isn’t falling. The fat lady isn’t singing. The six horsemen aren’t approaching. The Grim Reaper is not circling. And the bell is not tolling.

While doom and gloom is in the news it certainly hasn’t affected the shopper’s spending yet. But it has invaded the consciousness of a great many people in the retail industry causing some reactions that border on the insane. I don’t know how many times it needs to be pointed out but retail is not on the nose. In fact projections for growth in the next twelve months vary from +3% to a bullish +5% same period year on year growth unless the oft referred to X factor really does hit the fan.

Australia is in a unique position. Solid GDP growth, near full employment, rising disposable household income and real retail growth.

It is the financial markets that are freaking out – fueled by the media – not the shoppers. Financial markets players really are schizophrenic maniacs. Shoppers on the other hand are really pretty grounded about the situation. After all, if it doesn’t directly affect them it doesn’t affect them. They continue to spend. Some of their spending patterns may change, but they are increasing their expenditure relative to last year – not decreasing it.

I’ve never met a successful retailer who isn’t a bit of an adrenaline junky. But there is healthy paranoia and then there’s suicidal behaviour.

Many retailers at the moment are running the risk of driving entire categories of retail into the depths of despair by self-belief and self inflicted pain.

Don’t panic – your shoppers aren’t!

But if you want to discount, off-price and clear for no reason, no shopper is going to refuse to accept you financing part of his or her purchases thanks very much.

When the climate appears on the surface to be hostile smart retailers are quick to analyze and careful to react. Give your self some time to think through the situation and examine how shoppers are really behaving. Look beyond the headlines at what is really going on. Then and only then are you in a position to make a considered decision rather than a trigger happy one.

As an older and wiser generation once said, “Those who act in haste are doomed to repent at their leisure”.

Growth may have slowed, making things more competitive and exposing some weaknesses. But retail sales are still in growth in Australia. Carefully consider the context you are in – the market context, the competitive context, the shopper context and your business context – and then act decisively.

Don’t panic. Play to win.