Global circumstances have driven the retail industry into a period of extremes. Some retailers have closed the doors on brick-and-mortar sales and are experiencing year-over-year revenue loss. Others are struggling to keep up with consumer demand and are hiring thousands of new employees. It feels for many like a time of uncertainty, and while the immediate future may be tenuous, what all retail industries and brands have in common is a need to continue planning for the second half of the year as normal.
Currently, manufacturers and retailers are dealing with disrupted production and sales cycles. The predictable spikes and lags retailers and manufacturers are able to forecast for every year have changed. Certain categories that would be experiencing average sales right now are spiking, while others are lagging far below normal. When life returns to normal, buying decisions will be compressed and retailers will find themselves playing catch-up for back-to-school season and holiday at the same time. The challenge for brands and retailers will be identifying strategies to boost categories that lagged due to store closures within a short time frame.
It's essential that manufacturers not panic and react to immediate conditions. The focus needs to be three months to four months from now. That is when the real test of the supply chain will happen. Many businesses have pressed the pause button on new product development for the time being. This will create a rush in the fall when planning and production cycles have to be executed on a compressed schedule to match retail buyer expectations. There will be a line in the sand of what brands will survive. Companies that have laid off their entire workforce and shut down factories won't be able to compete. Smart brands are planning ahead, expecting that buyers will be frantic to play catch-up for September, October and November, and are executing to meet the coming demands.
There are lessons that manufacturers and retailers should be realizing from the current circumstances. For the future, there's a need to diversify global manufacturing so that industries aren't as reliant on China. One positive takeaway is that due to the cancellations of most industry trade shows, manufacturers and retailers are being forced to develop new creative ways to collaborate and communicate. All players in the retail sales process are being forced to evolve and become more efficient, and this ingenuity shouldn't be lost when normalcy returns.
For now, while retailers and manufacturers wait for everything to calm down, what needs to stay top of mind is that this will be a reality soon. It's too late to react to and adjust to what's happening now. People will return to work, stores will reopen, and planning, production and buying cycles will revert to routine. Stay the course and prepare for the compressed retail cycle coming in the second half of this year.
Tracy Thie is the principal and co-founder of Powerplay Retail, and is an entrepreneur and expert in business management, go-to-market strategies and logistics. Prior to founding Powerplay Retail, he worked for Pioneer Electronics and Samsung focusing on the Best Buy and Target retail sales relationships.
Tracy Thie, Principal, Co-Founder of Powerplay Retail, is an entrepreneur and expert in business management, go-to-market strategies and logistics. Prior to founding Powerplay Retail he worked for Pioneer Electronics and Samsung focusing on the Best Buy and Target retail sales relationships.