Retail Crisis Solutions

The drop in sales due to dying demand is causing a panic in the heads of retailers. What to do in the current situation, which, one must think, will only worsen in the short term?

Operational sales management. "Currently, it's necessary to focus on several areas of work together," says Dmitry Politov, a marketing analyst at TMHF Group, which manages the Soho and Clarks chains. "First and foremost, we need to introduce operational sales management within the company. Within a chain of stores, the profitability of each individual store must be monitored, and data on each store's performance must be collected and thoroughly analyzed. This will allow the retailer to quickly assess the decline in traffic at each location and the state of each store's inventory. Such data is essential for rent reduction negotiations with landlords, so that we can rely not only on general statements about the crisis but also on specific traffic and conversion metrics in shopping malls. At the same time, the data will be essential for monitoring store conversion rates, operationally managing staff at the store, and ensuring their objective and healthy motivation."

Following this strategy, Fashion Galaxy recently closed 3 from 17 of its stores - in the Shchuka mall, the Atrium mall and the Kaluga mall.

Flexible assortment policy. It is also necessary to analyze the assortment policy and pricing, says Dmitry Politov. “In a crisis, when solvent demand decreases, it is important to keep loyal customers attracted earlier. It is necessary to clearly understand that the assortment is what attracts customers and it is important to keep the concept, the atmosphere of the outlet. Assortment control can help get rid of the ballast of brands that were previously sold shaky and not valky, and at the same time occupied a place on the shelf. At the same time, constant monitoring of sales will allow the use of flexible pricing, allowing you to minimize balances without freezing expensive working capital in a product whose sales rate is too low. Analysis of sales separately at each outlet and comparison of store performance with each other can help to implement various ideas to increase product turnover. For example, as a result of changes in the market, the target audience of one of the stores may change, and the assortment that sells well in another store of this network will be slowly sold in this particular outlet. Here it is necessary to return to the first point and analyze how much this point is potentially profitable - what are the rents, traffic, conversion. Adding sales analysis to this data, it will be possible to make a decision on transforming it into an outlet, or vice versa, organizing a premium sales point on the site of a former multi-brand of “medium +” level.

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An illustration here is the recent news that Adidas has recognized the Rockport brand, which specializes in the production of model women's and men's shoes, as non-core. Having decided to sell it, Adidas intends to concentrate on the main direction - sports goods.

Analyzing Company Resources. Given the current financial market situation, it's also necessary to analyze the company's resources. "In fashion retail, a company's significant resource is its inventory," says Dmitry Politov. "If properly managed, it can become a relatively inexpensive source of working capital. Leftovers can be sold in pop-up stores or by reorganizing retail locations into outlets/discount centers. It's important to calculate the economics of each location, taking into account factors such as the presence of leftovers, stock, and suppliers' warehouses, with whom it's necessary to negotiate in advance for additional, sufficient stock.

Now that constant changes are occurring, it’s also important not to get lost and not to start making changes for the sake of changes or narrowly targeted actions, for example, aimed only at lowering costs, ”Dmitry Politov warns. - It is important to remember that in marketing, each element of mix marketing should correspond to all the others, all 5P should correspond to each other. An expensive product cannot and will not be sold at a point of sale, during the organization of which they saved everything - from equipment to personnel. No marketing moves will save the sale of a product that was initially lost to competitors in terms of price / quality ratio, as the consumer will become more and more discriminating in a crisis. It is necessary to conduct tough negotiations and close the outlet if there is a discrepancy between the stated store concept and the current audience of the shopping center. If earlier everyone worked due to cross-country ability and impulsive purchases and the average was + on the network, then now it's time to focus on the concept, analyzing the work of each outlet ”.