Q1. Individual retailer strategies for coping.
1.1 Forget old budgets and old activity based costing. The type of information you look at will affect what you feel like. What your team feels like. Change the information your team looks at to change their focus. Don’t do blanket cuts of X% on all expences.
1.2 Retail is NOT detail! When cutting costs, you need to focus on costs the customer doesn’t care about. Don’t cut costs from an Excel, even less so by indiscriminately slapping a cut all over without taking into account the customer experience.
1.3 Look at your stores carefully before taking any measures against some of them. It is not just about differences in store size. Use as many meaningful measures that can categorize them as possible. What sort of competition do they have? The landscape is changing as competitors close, maybe stores that used to be losing money stand to gain a lot! Maybe there are new opportunities for stores based on the shifting ethnic background of people in the area, or the number of business customers.
Q2. Areas of growth and decline in this climate
2.1 There is a lot to learn from looking at the changes in the print media business. They face online competition from within, they too are struggling to find margin and profits. They face aggregators, free alternatives, technological consumption changes, lifestyle changes. Why should a modern consumer come to your store? Focus on that.
2.2 Opportunities abound but we have to look at it from a lifestyle, not a technological point of view. BluRay might sell well because it fits the cocooning mood of this crisis as people stay home more. Cleaning products or repair services as people cling on to old equipment, cameras and other security products as they become more introverted.
2.3 Extend and rethink your product mix. Focus on what you could be selling based on your customers, not your buying team’s habits and old friends. Concentrate on occasional customers, they have the greatest potential for growth.
Q3. How customer are responding to the crisis
3.1 Ask the customers inside and outside your store! Why didn’t you shop today? Will you go somewhere else? Can we change something to help you?
3.2 Different people react in different ways. A. Well off people more or less stay as they were, just try to be a little less conspicuous. B. Yuppies still spend, they are hedonists not caring about tomorrow or saving, they just extend their buying periods. C. Some people freeze up, usually the least well of, or the newly unemployed. They look for value, own brands, etc. D. Most people are in between and just try and save a little here and there, looking for better value, bigger packs, etc.
3.3 Need to put the right spin on the products. It is not just essentials and non essentials as traditionally discussed in marketing plans. Some things are treats, things we like from time to time even in a crisis. Shrink their sizes and sell them at familiar prices. Other bigger ticket items which are usually postponed can perhaps be persuaded to be bought now, paid later in various ways. And of course wherever possible, non essentials should be promoted as “must haves” to those who have the cash and just need a gentle nudge.
Q4. How will the consumer electronics market develop in the next 2 to 5 years?
4.1 Customers are confused from the pricing inconsistencies. All over the channel we want to pay for results. If P&G can force their advertising agency to accept results based fees, so should you!
4.2 Be honest. Consumers are supreme lie detecting machines and that includes peculiar promotions with sly catches. Especially in times of crisis, been honest pays off on a very basic, emotional level. “You tell us which costs to cut!”
4.3 Innovate. Retail is in a Catch22 where the companies have grown to survive; but large organizations find it tough to innovate. Spirited leaders have to take it upon themselves to create a climate that promotes innovation. If you were trying 10 new things a year in the good times, you need to try 1000 new things this year!