We are living in uncertain and unsettling times, but today’s circumstances require bold and decisive action. As we hope for the best and prepare for the worst, here are my thoughts on what sports and outdoor industry players must act upon right now.
The first concern for every brand and retailer is cash generation and preservation. Liquidity is the lifeblood of business and there must be laser focus on this issue. Every case is unique, but this must be the primary concentration.
However, right behind liquidity is brand equity. Sometimes brand equity might conflict with liquidity efforts, but we must not let this pandemic ruin the good names of our brands. When making any decision during this crisis, the first question must always be, “Is it right for the brand?” If the answer is “no,” then move on.
I’ve talked a lot about brand purpose. This is the time when brands and retailers can put their purpose into action, and walk the walk.
It’s critical for brands and retailers to show empathy, both for their employees and customers. Every effort must be made to keep your staff safe and healthy, and help out if they fall ill. On the other hand, this pandemic also presents a time to build a stronger relationship with your customers. Empathetic marketing including donations to those in need and enhanced loyalty programs are a couple ways to go about this. Your customers will remember what you did for them during the crisis.
From a channel perspective, e-commerce has been a lifeline for many brands and retailers. More and more customers are shopping online, and for products they likely would have never bought pre-pandemic. I believe we can expect consumers to continue moving online as we ease our way out of the crisis. Now is the time for brands and retailers to double down on their online business. “Digital first” must be the mantra of retail now. Don’t rest on your laurels, as there is always room for improvement. Make your website the best it can be.
We had far too many stores, selling the same stuff, before the pandemic. Now is the time to ruthlessly address our overstored landscape. Bankruptcies and mall closures will partially address this severe problem, but brands and retailers must confront their obsolete retail fleet as well.
Amidst all of this, embrace change. Someone said to me recently that we will see five to 10 years of change in five to 10 months (though recently this has felt more like five to 10 WEEKS)! Change is coming, and coming fast. Those who try and fight it will get rolled over, but nimble brands and retailers can succeed. Curiosity is another way of showing empathy.
Remember that the customer remains in charge. Politicians or anyone else ordering stores to open will not get the nation shopping again. Retailers can open their doors, but no amount of proclamations can force people to buy. Thus far, early reads on reopening retail have been disappointing. The bottom line is, the customer will decide when and how we get back to business.
I expect there will be a push for markdown-adverse products. We are already hearing talk of season-less goods. I totally understand the desire to improve margins and avoid more markdowns, but the truth is, “markdown proof” or “season-less” is another way of saying “boring,” and boring retail can never succeed.
Finally, let’s think of this as a time to transform for the better. Ask yourself, “When this is over, what kind of company do I want to be? How do I want to do business? Who is my new customer? What kind of retail experience do they want? Which partners will I have and how do I elevate the winners?” As Winston Churchill once said, "Never let a good crisis go to waste." Seize this opportunity to reinvent your business.
No one knows how this crisis will end, but the brands and retailers that grasp the opportunity for transformation will be best-positioned for the road ahead.