Articles

Understanding the current and expected changes to economic conditions is critical to business decision-making. You need to constantly review material to assist your business in making an educated assessment of economic conditions impacting on your market, and the retailing sector in general.

The last 10 years has been a boom time for retailing. The larger retailers have done particularly well during the last decade at a time when we have seen the market fuelled by the consumer. Many smaller retailers have done well, particularly those that have carved out, and concentrated on their niche market.

However, we have seen, during the last 10 months in particular, a large increase in the price of oil and this has gradually now had a “catch up” effect on the typical household budget. This is the case in virtually every country that I have visited in the last four to six months. And I believe it will continue.

The housing market has been primarily responsible for fuelling the economic boom of recent years. But this has now come to a halt and real estate is actually going down in price in most western markets, while booming in Asia. In many areas there is a glut of houses on the market and a sudden scarcity of buyers. This has to have an effect throughout the economy.

We have seen an unusual trend of retail sales over the Christmas period of 2005. Some retailers experienced a particularly quiet time in contrast to what they had expected and planned. The retail figures that I have seen so far in both the U.S.A. and Australia, shows retail sales contracted by 0.1% in November. Not a surprise to many retailers.

Now I’m not proposing that this is a time for doom and gloom. However I am proposing that it is perhaps the time to appreciate what we now have, and to make sure that we do not risk that, through unnecessary expenditure of capital, in an effort to get even more. It will come back - it always does, but I think some caution and some prudent planning is the order of the day. You should be prepared and make sure that you do not get caught saying, “I wish we had more just like the good old days”.

So what do we do? Well, it is normally a quiet period immediately following the New Year, or post Christmas sales. It is an opportunity to assess your marketing plan that you have in place over the next 12 months. During the quiet months of February and March particularly, you should be using the available time to research and then prepare to put into place your various marketing strategies for the rest of the year.

Those familiar with my marketing philosophy already know that marketing is not part of what you do; it is everything that you do all the time. I see all too often, businesses not taking advantage of the quiet times to plan and prepare for the year ahead, or to catch up on all of the things that did not get done while they were busy.

So use the time you have available to you, when you have it. Do not leave it until tomorrow or next week. Your quiet time is some of the most valuable time that you have.

Put it to good use and you will reap the benefits in the months to come.
 

---