Now that the holidays are over, it is time to review your business. In my December post, I suggested that January and February was a good time to do this. I suggested capturing critical holiday sales data to help with the analysis.
A business is not isolated. It must evaluate internal capabilities as well as external market conditions. In 2018, quite a few major retailers stumbled. Some went bankrupt. 2019 could be worse. Retail is changing, and merchants who do not keep up are likely to fail.
Simplistic reporters blame internet shopping for the troubles of brick-and-mortar retailers. Whilst this may be generally true, there are other factors that may be more crucial in the long term.
As an ecommerce retailer, you may assume you’re ahead of the game and thus will reap the reward of consumers migrating online. This is a dangerous assumption. All businesses have to be ready for cultural changes.
For example, not too long ago it was accepted that drinking and driving were normal and that few drivers paid attention to the speed limit. Both are now socially unacceptable. Thus in the U.K., where I live, many country pubs have closed. Those that remain now focus on food and seek to attract families rather than drinkers.
…in the U.K., where I live, many country pubs have closed.
In 2018, consumers became much more aware of environmental issues — not just climate change but also waste, especially plastic. Consumers are increasingly concerned about environmental damage. This is starting to affect consumer purchasing. Many ask for non-plastic alternatives. Indeed, I have recently seen people promote bamboo toothbrushes on Facebook!
The shift is affecting Apple, which is experiencing fewer sales from iPhone upgrades. Apple is attempting to counter by offering discounts to customers who trade in older phones that can be recycled.
This trend will likely continue. Consumers could demand products with longer life expectations — those that can be repaired rather than replaced. This, in turn, could help the service and repair industry. Likely, consumers will come to understand that it is better for the environment — for their future and their children’s future — to not automatically consume new products. Instead many will use older and better items for longer.
We see this in the razor blade market. Consumers are switching to older styles of razor blades rather than the expensive, plastic-encased versions. Businesses that rely on the continuous consumption of replacement blades are beginning to see fewer customers. This trend could spread into other markets.
Thus look closely at your business. Consider the products it sells and the customers who buy them. Could you switch to more environmentally friendly items? Could you survive if your products require a longer life? When will your customers demand those items? When should you shift that way? Do you want your business to lead the way or, instead, change with your customers?
Whatever you decide, don’t find yourself with unsalable products and no customers.