Our current retail environment is very uncertain. Working out forecasts, budgets and cash flows is a bit of a guessing game. It is reassuring knowing that many of our biggest customers feel exactly the same way as we do at Koh Living.
Based on experience one can make projections for the future, but we have never experienced a war or a virus where our businesses are arbitrarily shut down and the future is out of our control.
How can businesses survive and even thrive throughout a recession? One immediate strategy is to maintain your margins (your need) while offering discounts and promotions (consumer needs), which will increase your sales (your need). This is a win win situation.
Consumers will always want to purchase gifts, but now, more than ever, they will want their money to go further. This means they need to buy great gifts at affordable prices. They will want to feel like their money is going a long way. Therefore, retailers would be best to offer promotions that make customers feel that they are getting a real value.
This is why our Koh Living gifts packs are the number one best-selling item on our website. The gift packs are a promotion where customers feel that they are getting value for money. Importantly, we are minimising the image of always being ‘on sale', while still giving the consumer the feeling/perception that they are getting 'value for money'. Due to Covid we have an overstock issue, so we are mixing fast moving with slow moving items to keep stock moving out of the warehouse (our need) while the consumer is making their money stretch by getting more gifts at great value (their need).
There are many companies that are capable of surviving and thriving through a recession. It is nothing to be concerned about as long as you have a good understanding of what people need and a clear path to success. There are lot of people who have lost their jobs and there will be more to come in 2021.
Therefore, they will be more reluctant to spend their money. This means for retailers like us, we need to consider how we can best serve consumers and enable them to survive these challenging times. Our success in achieving that goal will guarantee our own survival. It has to be a win win for both parties.
By Tui Cordemans, Koh Living