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The Sky is Not Falling

Caroline Kennedy, Editor-in-Chief -- Gifts and Dec, 2/1/2009 12:00:00 AM

Caroline Kennedy

Yes, we hear about financial troubles right and left with banks in crisis over toxic debt, businesses shuttering, workers being laid off and consumers reticent to shop. Despite what we regularly hear in the streaming news, all is not gloom and doom — not in our part of the retailing world. Smaller independent gift and decorative accessories businesses are faring… okay — at least according to feedback we got at recent gift shows, where attendance was respectable and order-writing good, though “cautious.”

The companies that are in trouble are mostly big guys, some of whom lost sight of important things about their business: knowing the customer and what she wants; and keeping true to the core business that made them successful in the first place. Some over expanded; others got complacent, figuring, “If we stock it, they will come and buy it.” In a recent Associated Press story, Anne D'Innocenzio wrote, “For years, retailers could afford to be sloppy about running their business because customers kept buying. No more.”

Lee Scott, retiring CEO of Wal-Mart and keynote speaker at the National Retail Federation convention, advised retailers to get back basics: to focus on customer service, smarter buying and good merchandising. “You had better understand your customer right now. And you had better understand your inventory,” he remarked.

These basics have always been a part of the independent specialty retailers' playbook and a part of their strength, which is why today more are faring better than the big guys. Taking another practice from the successful independents' playbook, major retailers are also trying their hand at hosting special events to draw customers in. But it will take time for them to catch up to what the smaller retailers are already doing, and doing well. And specialty retailers, being smaller with fewer layers of management, have been able to adapt to the changing business climate more quickly than their larger competitors, adjusting merchandise mix and price-points to offer what customers want.

One piece of advice offered by experts such as Rosalind Resnick, CEO of Axxess Business Consulting, that all businesses, whether retailer, vendor or service — large or small — need to heed: Don't stop advertising, marketing and promoting your business or talking to your customers. This is the time to keep your name and/or brand out there and reach out to customers. The more that you reinforce your message, the better you will be remembered when it comes time for a customer to step over the threshold and make a purchase.

There is no doubt that, as both consumers and businesses, we need to be cautious and manage our money carefully. But caution and managing are the key words here. And they don't mean stop buying, stop being creative in your business, and stop marketing and promoting it. If we run scared and try to hide until the problem goes away, we surely will all be out of business.

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