One is constantly impressed with the long-term approach of the leaders of the Emirates. In 2010, Vision 2021 was released and now we are looking at the UAE Centennial 2071 Vision. The country always looks far ahead... and strives to achieve these objectives.
Contrast this with the way business is generally done here. One of its defining characteristics has always been short-termism. Whether retail or other businesses, the approach has always been to focus on what is happening now, this month, or the next.
A plan for one year ahead was perhaps the limit to which people would look.
This was a surprise to me when as a newbie here in the late 80’s, the boss’s would say, "I want a campaign and plan tomorrow for such and such a product...". Or "We have thousand pieces in the warehouse and they must be cleared in this month..."
Still stuck on knee-jerk
One wondered why we did not work to sell these items over the six months when they were sitting in the stores? Even though many retailers have got organized, short-term - and knee-jerk - business practices seem to be par for the course for many.
In the last 12 months of the pandemic, business perspectives have been compressed to the extreme. As one astute businessman analyzed, profit as an indicator of success went out of the window. And businesses were consumed with ensuring organizational survival.
Suddenly, cash was critical and conserving it, or maintaining its inflow became the real task for managements.
But now with a year of the downturn, most businesses have more or less faced the worst times. Many who could not manage it have already closed down... or are close to it. The agile and innovative, or those who had the financial muscle, seem to have navigated through the storm and are still afloat.
Continuing with the ocean analogy, this does not mean that the tide has changed. However, it does seem the survivors have learnt how to swim and are able to see some land on the horizon.
So what are some tips to consider?
Speed will be key
Maintain an agile posture. Be flexible and ready to change. Find opportunities which use your organizations strengths. For example, consider the wedding dress specialist who made a quick shift when the wedding market crashed to create a highly successful business in understated luxury clothes for middle-aged women.
Plan your stocks carefully. This is a tricky one. Today, many companies err on the side of caution and ending up understocked for the little business that they have.
At the same time, with the on-again, off-again markets due to the virus appearing and disappearing, many customers are still not comfortable visiting stores or restaurants. Or are being very sparing in their spending.
So stocks have to be controlled and yet be available. No goods, no sale.
Go careful on promotions
Do not depend on promotions. For many retailers, big promotional periods like the DSF and Chinese New Year came and went without much of a ripple.
With over 160 official promotion days in the annual retail calendar, there is a high level of sale fatigue. Even big red windows do not have much pull for now. Planning your business, especially buying, based on promotions is extremely dangerous.
If the promotion does not fly, unsold merchandise quickly accumulate in warehouses and creating its own set of pressures on the team and the cashflow.
Increase your digital profile. Since many customers are not frequenting stores with the earlier intensity it is very easy for retailers to be out of sight and mind. For stores or brands that are joining the ecommerce bandwagon, the primary challenge is getting people to visit their online store or indeed, to even know of its existence.
A consistent, well-thought out online marketing strategy reminds customers of your presence and products. And reassures loyal customers of your attention and care.
So, your digital marketing needs to be innovative, clutter cutting, and the media spend carefully planned. On the face of it, digital marketing does not look expensive. However, if the ads are boring or me-too, and the media plan not well-crafted, the money disappears without a trace.
You can also relook at traditional above the line tools, such as outdoor and radio. Many deals may be available for takers.
Keep an eye on the long game. In the pressure to manage immediate challenges, do not forget the longer perspective. In current times, long-term could be as little as six months, or it could be more.
As the situation develops be ready to pivot quickly, gearing up or down as the situation demands. Remember that long-term survival and success will greatly depend on your ability to hold on to your loyal customers. Find ways to appeal to them and their needs, keep them close to you and show them that you care.
When the market begins to turn, you would want to build on the customer base that you have had all this time, rather than rebuild your numbers from a much lower level.
- Ajai Kumar Dayal is a columnist on retail, ecommerce and marketing. He can be contacted on twitter @ajaitwit.