Lessons From the Great Recession
It wasn’t that long ago that America faced the biggest economic decline since the Great Depression. As painful as that experience was, perhaps it’s time to look back and reflect on what strategies served you then and how those may help save your business now as we all struggle to return to some semblance of normal.
Many retailers closed up shop in those days and many of the ones that were left ended up hungrier, leaner for sure and maybe even stronger. A lot of retailers closed down – we literally saw thousands of stores shuttered – but a lot of retailers also succeeded.
Those that fared best are those that acted fast, acted aggressively, and called in for help – from suppliers, from distributors, from their communities.
No one wants to revisit that time. But you should.
Go back and carefully review all the changes you made, the ones that worked best and the ones that did not. Those dark times may be your playbook for the rough times ahead. Learn and relearn those lessons from the past to survive for the future.
In spite of Ronald Regan’s line about the nine most terrifying words of the English language – “I’m from the government and I’m here to help” – the government is stepping in to provide direct help to small businesses.
It can be daunting to try to handle that on your own. Luckily, the World Floor Covering Association and the National Wood Flooring Association, among others, are offering support in this area with advice and guidance on how to take advantage of the available government programs. Look them up and they can help walk you through the process.
Buying groups, suppliers and others are also trying to help retailers get the help they need – everything from SBA loans, to relief packages. Make this a top priority. The information is out there, help is available, take advantage of it now. After all, the best thing we can do once we’ve flattened the curve is to get back to work, get back to business, get back to making a positive contribution. Keeping your store open means people have jobs, incomes and opportunities – for you, your people, your customers, your community.
Even before the virus hit, we were seeing major chains closing up shop and stores along Main Street – including many smaller specialty retailers across virtually every product category that faced similar fates.
This economic downturn will take a huge toll on smaller retailers, and flooring will be no exception.
Accelerated Online Buying
Make no mistake, this shutdown has rapidly accelerated the growth of online purchasing by five to 10 years. One thing we learned, virtually everything – and I mean everything – can be purchased online and delivered to your home in days. After weeks of home delivery of groceries, lunch and dinner, prescriptions and more essential items, that trend is here to stay. I’ll remind you that one of the fastest growing trends in mattress purchasing has shifted to online sellers. Who’d have ever guessed that one?
Expect many of the changes brought about by our efforts to curb the spread of the coronavirus – such as social distancing – to remain long after the contagion is controlled.
Not only may handshakes go away for good, but so may other seemingly benign activities. A recent article about car buying predicted (albeit overstating the case) that consumers may never walk into an automotive showroom again given that so much of car-buying activity happens online to begin with. Here’s the scariest quote from that article: “They could squeeze out mom-and-pop dealerships that have thrived for decades on personal relationships polished at the Chamber of Commerce or as sponsors of Little League teams.”
Shop at Home
While you may think that shop-at-home services will flourish in this new environment – and I agree, they will – I’m betting that even that will be transformed.
Think of this as a transition from Shop at Home to Shop from Home. Now is the time to invest and update your website to make it easier for consumers to view your offering, to interact with your sales team, to actually shift as much of their purchasing behavior to your website. Maybe you should even allow them to apply for financing directly on your site without ever having to walk into the store. I can buy a mortgage for my home online, so why not finance my flooring purchase?
All of these changes make sense not only from a response to our current situation but as a hedge against future shifts in consumers’ buying behavior. Do everything you can to make it easier to buy from you, even if it’s online. Do it now.
One of the positive things we may experience as a result of being locked away in our homes is a desire to update and upgrade our homes. That is an opportunity you should not overlook. Depending on your competitive situation, this may be a good time to partner with other local retailers for advertising opportunities, for referrals, for ideas and for support.
Those great relationships that have defined your business may be the lifeline you need right now. You may recall that some suppliers bent over backwards to support their retail customers during the Great Recession. Maybe it was special sales opportunities, or better terms or extended lines of credit. They can be a powerful source of support during these trying times.
These are just some of the steps you can make. Look ahead and try to anticipate the changes that are coming, like Shop from Home. Look back to find the strategies that worked for you in the past – dust off some of the lessons you learned from the Great Recession. And don’t forget to look forward to the time when this is behind us and we are in the strong recovery that is sure to follow.