If you can imagine the shape of an hourglass, it may help you understand the reality of our current economy as well as the economic trends experienced by most of today’s brick and mortar businesses.
At the top of the hourglass is the widest part of the shape, and that certainly correlates with today’s wealth reality. There is also a mirror image at the bottom of the hourglass; this would represent the growth in social services and programs needed to help provide for many who otherwise may not have the opportunities to provide for themselves.
The trickle of sand in the small middle section of the hourglass is our everyday business reality and money flow. In this analogy the middle of the hourglass represents the squeeze most small businesses are experiencing today.
Another trend we witness that squeezes the smaller brick and mortar businesses is the “smart phone” reality. In today’s marketplace there are simply many more choices available to the consumer at the touch of a button.
With a double squeeze on the middle, it’s easy to see why I use the hourglass analogy. So here are a few strategies to help you tolerate and understand the truth of the hourglass economy. I suggest we stop the denial about the local retail economy being or getting better and grasp the “why” it is the way it is.
1. Be aware of the hourglass economy because customers have changed their buying habits.
Even in an hourglass economy the customer is still out there; but it’s fair to say that phones and screens of every type, as well as tight money flow, have changed everything about the customer’s behavior, buying habits, and participation habits .
Now the customer is king, and the retailer is playing defense. The customer today is armed with scads of information (granted that some is erroneous), and there is also a squeeze on disposable income. With more online information being available, today’s expertise is now much more opaque. Let’s not lose sight of intentionally misguiding terms like “shell pack” and because of less interaction with a sales force, the customer is often duped into thinking the product has a lower price when, in truth, it’s not even the same product.
Recall the 1996 movie That Thing You Do directed by Tom Hanks. It’s about a young band’s rise to fame in the early 1960s. The drummer’s father owned a local home electronics and appliance store called Patterson’s. In the sixties stereophonic equipment and fancy televisions were coming into prominence as the latest “new thing” and that fact forced Patterson’s to embrace and deal with the truth that everything comfortable in retail was changing, and therefore, there was a new learning curve for their business. I think it’s fair to say the current experience in today’s hourglass economy is very similar to the movie. So the retailer is now, once again, in the middle of the hourglass.
2. When in Rome, do as the Romans do!
To survive, as business owners, we have to take protective steps until the money flow returns to a somewhat more normal model. We must operate in accordance with the “hourglass truth,” and just like the consumer, we must cut unnecessary spending.
We must also strive to be pledged to invest in a more unique thinking with our store’s product selection. As hard as it is, we must let go of our allegiance to yesterday’s ways, and we must create new opportunities with fresh products and improved customer relationships. We are actually well served to harken back a bit and incorporate some good ol’ “old school” customer service, and engaged interactions through conversations. Those customers who have an established relationship with your business will truly be more inclined to remain loyal.
3. Make your business model more compelling to the customer.
There is a reason why flypaper and glue work. In business, if your model isn’t really enticing or compelling – now more than ever – the customers tire. The current economy is exhausting for families. I hear that every day. So be the coffee break your customers get to take. Create an environment in your business that gives your customers a chance to escape their daily stress and perhaps ponder that music in their lives is a great way to center and rekindle family around a wonderful participation.
Last thoughts
Denial that we remain in a very soft economy is not your friend, and it does not serve you well. We can’t predict when, or even if, the economy will return to a “normal” behavior, and for all we know, this is the “new normal.” You could also say some business models are thriving in this economy; but I hear more frustration from business owners than confidence. What does serve us best is to stay focused on ideas like quality, customer interactions, fiscally sound economic decisions, and last but never least, a healthy dose of creative thinking.
