Is Retail Doomed by Its Own Greed?
Running a retail store is dynamic and challenging. You may already know this. Many subscribers here run stores.
We often don’t get one minute in the day to think. We’re so busy running from one task to the other that our brains feel mushy by the time the day is over. Decision fatigue is real; after making about one thousand choices a day, we’re cooked.
But there was one thing I could never get past.
Even during the busy days.
Even during overnight shifts.
Even during holiday planning and meetings.
Why is my company slashing resources to make money in the short term? What about the long-term health of the business?
Okay, I asked two questions, but they’re related.
Let’s say we cut payroll this quarter. Could you make more money because you’re spending less on associates? Maybe. But what about next quarter? What about the health of the people who interact with your customers daily? Will that negatively impact them? Maybe. How much?
Do retail executives talk through this stuff? I’m sincerely curious.
Because the decisions I saw handed down year after year after year, showed me that the people in the glass offices were hustling to make money now. That was the only goal. Be more profitable this year versus last. Make more money this quarter than last.
That is all.
But that’s not realistic.
Every year I ran a retail store, my comp goal was about +3%. My bosses wanted me to increase my business by 3% every year steadily. That’s a nice goal. But is it really the way?
What if the buys are bad? This bad buy scenario actually happened to me, and I was yelling about it for months. For six months, I was sent nothing but jumpsuits and striped sweaters. Need a skirt or a dress? Too bad. Here’s a jumpsuit.
What if the economy tanks? I was a store leader in 2008. My company overhauled the management structure, leaving me as the only full-time employee in my building.
Good luck making that comp, Kit! It will be on your review, by the way.
Why does the industry operate like this?
Yes, shareholders and investors, of course.
Retail companies are beholden to them, so they make knee-jerk reactions to drive stock prices even if that means the business will be worse off next year.
But what about the next five years? Or ten years?
Or they use billions for stock buybacks.
Hourly employees? What? Who? Oh, they got a $0.25 raise this year. They’re all set.
The goal of business is to make money, sure. But isn’t it also about staying in business as long as possible? Shouldn’t we think long-term about some stuff? If you lead a company, don’t you want to leave it better than you found it? Set it up for future success?
Jobs in retail will become more challenging to fill.
Positions will remain open.
The industry is changing faster than you think.
Why would we work our guts out for greedy billionaires who give us $20 an hour to lead a team of sixty through blood, sweat, and tears if we can grab our cell phones, post a video on TikTok, and make thousands?
I love retail. I miss running stores often. I miss the people, the collaboration, and the teamwork. I wouldn’t change my retail journey for anything, but I’m also Gen X. I don’t know that younger generations will put up with the mistreatment and the mistrust.
We need to start thinking about brick-and-mortar retail in the long term. Support the people, and they will stay invested. Have a vision that matters, other than making money. Hire a visionary leader who thinks beyond the next three months.
Because making money and giving it to the top 1% is not inspiring for us little guys.
I cannot wait to see retail stores - and their associates - thriving again. If you want to survive, it’s where you need to head.
Kit Campoy is an author and retail expert with two decades of experience leading retail teams. Today, she writes for world-class SaaS Retail Tech companies.
Great examples in this article of why the folks at the top NEED to understand what is going on that actually supports their dang profits! They will lose as well in the end if they don't make some changes.