Canada’s Leading Retailers Weigh In
We’ve seen the data, read the headlines and the news is not good.
- Retail sales have hit the lowest levels since 2021 lockdowns
- Retailers are strategizing to combat organized retail crime
- Police presence increases in Toronto stores during the holiday season
How are retailers expected to face these challenges and come out ahead? Or at the very least, stay afloat?
We asked senior executives at Canada’s leading retailers what we should be doing right now.
Here’s what they said.
#1: UNDERSTAND WHAT YOUR CUSTOMERS NEED VS. WHAT THEY WANT
It’s imperative that you understand what your customers need now vs. what they want. Retailers learned to adapt and change their businesses during COVID-19 and will have to do the same now.
Customers will still come, but they will be looking for everyday essential items now: things they need, not things they want. Some of these needs will come from the strategies they’ve employed to save money:
- Getting their cars repaired vs. buying new cars
- Doing more home cooking vs. going to restaurants
- Doing their own DIY projects vs. hiring someone
- Planning staycations vs. vacations
#2: FOCUS ON ESSENTIALS
We need to change our mix, change our promotions, change where we invest in inventory etc. and focus on essentials to living a life with tight wallets.
Will people cut gym memberships and work out at home? Will they give up Starbucks and buy a coffee maker? Everyone’s different, but the retailers who adapt to what customers need vs. what they want will come out slightly down (not up).
The retailers that don’t sell essentials or don’t have a mix of products that allows them to be bigger in one area and take a hit in other areas will die.
“I sold more food vacuum bags and machines in the last two weeks than I did all year,” says one top retail executive. Why? “Because people are freezing more food vs. being wasteful or eating out.” Retailers need to learn that and adapt. The opportunities exist, they’re just on a smaller scale.
Maximize every dollar for what your customers need.
Then shore up your expense structure. Because if you aren’t in grocery, your sales will likely be down and it’s tough to drive earnings in a negative revenue environment.
“In the midst of chaos, there is also opportunity.”
Sun-Tzu, The Art of War
With the rising cost of living continuing to eat up consumers’ discretionary incomes and households forced to prioritize essential spending, retailers need to shift their focus and adapt.
If you’re looking to make positive changes to your retail strategy during this season of uncertainty and need help with your retail environment, customer experience, or store build, contact our team to get a project plan and quote.
