“Recession is opportunity in wolf’s clothing”~ Robin Sharma
This saying challenges you to see things differently.
When the economy is in a downturn, retailing opportunities may not be obvious, but they are there.
By adopting a different vantage point and digging a little deeper into areas of your business that may not appear fruitful, you’re sure to create new opportunities.
Let’s look at five major retailers who did just that and what we can learn from them.
Top retailers inventing their own opportunities despite a recession
Be the first to deliver something new
Who says nothing is funny in a recession?–Not Disney.
At the height of The Great Depression in 1929, Walt and Roy Disney, founded Walt Disney Productions in their garage-based cartoon studio.
In addition to serving up whimsy and entertainment, Disney always brought something new to the table and was the first to do it.
For example, they were the first to feature synchronized sound in a big-screen cartoon movie, “Steamboat Willie”, starring the beloved Mickey Mouse.
They were also the first to launch and secure sales of the company’s merchandising business. Roy Disney licensed the rights to create Mickey Mouse toys and novelties, books, and music in 1930.
Today, the retail sales of Disney-branded merchandise have exceeded $100 billion annually.
Disney was also the first to create the first-ever full-length animated feature film, Snow White and The Seven Dwarves, in 1937.
They were trying times for sure, but this dynamic duo looked at how they could apply innovation to creativity to offer consumers something new.
2. The Bay and Zellers
Mix in discount brands
Consumers who typically shop at more expensive stores and were willing to indulge in higher price points, now want to spend less and save more in a recession.
They may switch to less expensive brands, and even shop at less expensive stores.
Retail and food industry experts say that as inflation increases expenses, Canadian shoppers are expected to flock to discount stores for bargains on packaged food and household goods.
However, omnichannel retailer, Hudson’s Bay Co. (The Bay), is enticing customers to stay and even attracting new customers.
The Bay had the foresight to address the problem of departing customers for less expensive brands by reviving an old faithful – Zellers – a Canadian, discount department retail chain, founded in the 1920s, with its famous tagline “Where the lowest price is the law.”
In 2022 The Bay announced it would offer customers lower prices, with excellent quality by re-introducing Zellers as a store-in-store concept.
This wise retailer has now introduced lower-priced items to its inventory mix while playing to consumers’ desire for more affordable products, national pride, brand familiarity, and nostalgia.
3. American Eagle Outfitters
Take advantage of new partnerships
Supply chains remain rather chaotic from logjams at major ports to material shortages to a lack of truck drivers; it’s a situation that has impacted nearly all business sectors.
The situation was exacerbated by the 2020 recession brought on by COVID-19 and continues to cost retailers money and competitive advantages by either having to over-order to ensure they have inventory or by losing sales because they can’t get the inventory they need.
In response, some retailers began looking at the possibility of new partnerships as a way to alleviate the situation.
Leading apparel retailer American Eagle Outfitters (AEO) decided to acquire Quiet Logistics, a fulfillment technology company, in 2021 to boost its supply-chain capabilities and resiliency.
The partnership gave AEO access to Quiet Logistics’ network of local distribution centers throughout the US, streamlined inventory management, and sped up customer delivery times.
Reach new levels of success with technology
“If you become the leader that can figure out how to use technology to fulfill needs and add value, you become the disrupter not the disrupted.” ~ Tony Robins
Born out of a need to expand Amazon beyond books, AWS (Amazon Web Services) has created a multibillion-dollar industry.
Just prior to the 2007-2009 recession, Jeff Bezos, founder of Amazon, invested in technology by taking the private cloud infrastructure Amazon was using for its data-based business and turning it into Amazon’s own product and so became an analytics-first company.
He launched Amazon Web Services (AWS) and used it to increase Amazon’s profitability by sorting through one billion GB of customer data and generating 10-30 percent of revenue through predictive analytics.
In the second quarter of 2021, AWS brought in a record $14.8 billion in net sales, accounting for just over 13% of Amazon’s total net sales.
Amazon Web Services is a cash cow for Amazon. Its web services are shaking the digital world in the same way that Amazon is changing the retail space.
Create a desirable customer experience
Early computers were massive, and mainly only used in offices by certain people.
Post the 1975 recession, Steve Jobs and Steve Wozniak wanted to make computers small enough for people to have in their homes, take with them wherever they were, and create a more personal experience for users.
Today Apple has a legion of personal technology products, and Jobs’ and Wozniak’s vision has been realized–every day people can afford and adopt technology into their personal lives and their personal space.
Statistics show that more than 1 billion consumers currently use iPhones and iPhones have a 65% share of smartphone sales in the US.
Apple even carried that personal experience right into the way it sells its product and its store layouts.
Its store layouts are unlike any other competitor. They’re minimalist, emphasize natural materials, like wood and stone, and are easy to move through with a clean and open feel.
The bottom line is that Apple understands the difference between selling products and creating an experience that consumers want; as proven by the huge lineups outside their stores when they launch a new product as well as their booming sales.
Inventing your opportunities
Was there risk involved for these retailers when they invented their opportunities? Always.
They asked hard questions to get the answers they needed before they could progress in a recession-stricken economy.
You’ll need to do the same. To invent your opportunities, find answers to questions like,
“How will the global financial downturn change the way you do business today?”, “How can technology help my retailing business and what is available?” and “What areas of the business can you look at in new ways?”
Once you get the answers to these questions, you may find you can:
- Hit the market with a new offering
- Partner up to secure and grow market share
- Pad your bottom line with discount brands
- Invest in technology
- Give your customers an experience that keeps them coming back.
You’ll turn today’s ambiguity into tomorrow’s opportunity.