Recently I sat down with my financial advisor to discuss how they were performing in their stewardship of my retirement funds. I’m not sure why I bother because when your 85 year old father is still working, it would be very hard for me to even think about retiring—- – but that is another story.
As part of the review we had discussions about the current concerns in the media about an upcoming recession. One of the red flags was the yield curve got inverted, which evidently is a signal of upcoming troubles. But as they explained to me, this happen for about one hour of one trading day and even if it were true, it generally is 18-24 months before any actual recession occurs. The good news is that in all their models, they still believe the economy has momentum with people working and spending. Of course things like politics, tariffs, and Fed activity cause short term stock market movement, but overall the economy is plugging along just fine.
But what if a recession is just over the horizon? How do I shop October market? Money will still be moving around, but it will not be moving as freely and loosely. It will be your job to make sure the money that is moving, moves towards your offerings. I remember some of the best years I had with Hughes Furniture was in 2008-2010 . They offer a value in upholstery that is domestically made (ie. NO TARIFFS). When consumers started trading down in their spending, a natural solution was the quality American made product Hughes produces.
Recessions mean more time and effort needs to be placed on Customer Acquisition and Customer Retention. There are not as many customers in the marketplace, so valuing each one is very important. The more personalization you can put into the acquisition effort, the more successful you will be. People want to feel like more than a number. It’s the “Cheers” effect—we want to go somewhere we fell like we belong. Offer product your customers want, Provide an atmosphere where they feel comfortable. Improve your communication, and help customers overcome problems go a long way in retaining the relationship in good times and bad.
But don’t forget to treat your suppliers with respect. There is a major supply channel disruption going on due to the China tariffs. Some factories that have not treated their overseas partners properly over the years are going to lose out on getting goods from factories that now have full production schedules. If I’m a factory and you treated me poorly in the past, always beating me up on price, service chargebacks, and unreasonable demands, and now all of a sudden, I have lots of people knocking on my door for my production without all the headaches, don’t you think I might shift my loyalties.
Keep an eye on trends. People will spend on bold statement pieces when times are good. Will they go back to neutrals if money gets tight? Karavaan from India has inexpensive, but bright stylish offering s you should check out at market. One of the biggest trends due to aging baby boomers is health and wellness. I have had discussions with two major retailers who are developing health and wellness galleries. The Cozzia massage chairs and related health and wellness offerings show this trend has great consumer reception and astute retailers are broadening the category.
So as a buyer at the upcoming market I would be looking at the following items:
1. Value products to advertise. Not necessarily the cheapest, but certainly products that will show off well in ads.
2. Watch suppliers and see if they will be able to ship with the supply chain upheaval.
3. Look for new exciting products because customers love change. Several of our vendors offer this.
4. Watch the trends like health and wellness. Whether it be in bedding or other products what can you be doing to expand the category and give customers what they want?
