In 2009, we are faced with a much altered financial and economic landscape. Certainly not another Great Depression, but for sure a recession on a scale not seen in probably 60 years. Both the reality and - as importantly - the perception of wealth has changed. Credit is much harder to obtain, consumers are spending significantly less...perhaps 30% down year-on-year. Companies are laying off staff, assumptions about continued growth in wealth and personal security lay shattered, at least for the forseeable future. For a large proportion of the Baby Boomers approaching retirement, underlying income assumptions have radically changed, resulting in a belated shift to savings, versus spending. Its not a pretty scenario, and for Retailers, it is a major challenge.
Short term, it is critical to get back to basics... to focus on eliminating, reducing and managing expense...from inventory, to cash-flow, to staff and energy overhead, to shrink, to capital...the key right now is to cut costs, sweat the assets and remain afloat during a major sea-change.
However, containing costs - while necessary, is simply not sufficient. Retailing is a zero-sum game, and the survivors will reap the benefits later, when growth returns. Staying afloat buys time to set a new course for landfall...but merely drifting is not a winning strategy, it just defers failure, because consumer tastes, expectations, needs and wants are in the process of being significantly reshaped by changing circumstances, redefined priorities and reduced discretionary spending.
The smart retailer must clearly stay alive, but more is needed. They must understand, anticipate, intercept and serve a new consumer model. That model will doubtless shift and evolve over time, but it is clear that the current assumptions about consumer behaviors are already history. In a rapidly changing world, the consumer will never be the same again!
The Actionable Intelligence Group comprises a network of talented and experienced individuals who understand the realities of Retail operations...but also have a scarce ability to think 'out of the box' and help businesses not just survive economic challenge, but to determine what kind of business they need to be to exploit new growth that will inevitably return, but will doubtless play out in a very different social and economic landscape.
From strategic consulting, through tactical planning, we have the ability and talent to help Retail organizations develop and execute against reset survival and growth initiatives, making choices that meet the key criteria of "How much? How Sure? How soon?" (How much to invest? How safe is my investment? How soon will I get a tangible payback?).
Call us now on 678-462-1520 to learn more....
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