3 Lessons Retailers Learned During the Great Recession to Think About Now
Many regions of the country are reopening for business and taking steps that allow for a gradual return to something vaguely resembling normal. It will be a relief for many brick-and-mortar businesses that have been suffering the effects of stay-at-home-orders, social distancing rules and some aspects of their businesses being deemed non-essential.
Still, while it would be great to sit back and bask in the optimism this reopening makes many of us feel, we need to face the possibility that the impact of this pandemic will continue to plague the U.S. economy and our way of doing things—from shopping to socializing—for longer than any of us would have hoped.
That’s not to say we should despair—but rather, prepare.
The Great Recession of 2007-2009 revealed a great deal about the nature of the pet industry. It’s become almost a cliché to say it’s recession resistant. In truth, there were many struggles, with some product categories such as aquatics and other pet supplies being particularly hard hit. Some retailers and manufacturers didn’t make it through to the other side of the tunnel. But many others did, and the decade that followed proved abundant for the pet products market.
Admittedly, the situation we find ourselves in now as it relates to the COVID-19 pandemic and its wide-reaching effects is unprecedented. Some industry commentators and economists have forecasted a more dire economic fallout from the pandemic than what we experienced as a result of the recession that hit more than a decade ago. Still, given how the pet industry has emerged and thrived since, we thought it relevant to dig into our archives to cull wisdom from the retailers who were going through it, as well as review the advice financial advisors were offering at the time.
Back in 2008, Martinique Lemke, owner of Redbones Dog Bakery and Boutique in Fernandina Beach, Fla., said that overall sales were sluggish, PPN reported in a September 2008 article. She also said that while sales of food and treats were holding steady, boutique items were hit hard. To offset the slow sales, she teamed up with the local Nassau County Humane Society and focused on pet adoption events and fundraising efforts—for example, on designated days she’d offer 10 percent-off discounts and give a portion of sales to the humane society. These days, events that draw large gatherings may not be appropriate, but two things remain true: Customers enjoy taking advantage of discounts, and they also often want to give their business to stores that support charitable efforts they care about. A strategy that leverages these concepts might be something to work on today if traffic on the sales floor is slow.
Personalize Your Service
Also back in 2008, Teca Tu—A Pawsworthy Pet Emporium & Deli in Santa Fe, N.M., which won PPN’s 2019-2020 Retailer of the Year Award for Independent Spirit and will be featured in PPN’s June issue, had been in business for more than 13 years and was navigating the recession with a strategy focused on customers. Store manager Joanne Buchannan told PPN that personalized customer service was one of the main drivers of the store’s success.
“We do a lot of special service and personal service, and bend over backward to special order for people and fit their dogs properly with our clothing,” Buchannan said at the time.
Now, 12 years later and a quarter of a century into the store’s existence, owner Laurie Wilson continues that customer-centric tradition, from offering special food orders for customers to providing free nutrition expertise. When asked what Teca Tu is most known for today, she replied, “Our customer service, familiarity and welcoming atmosphere, plus our fabulous, loyal customers.”
The store’s laser focus on providing top-notch customer service proved essential to getting it through the recession of yesteryear, and it is very likely to be the thing that keeps it humming through this latest crisis.
Communication Is Key
Discounts, charitable efforts and personalized service aside, some stores may be brought to the brink by the challenges we face today and in the months ahead, and they may need a deeper well of strategies from which to draw upon.
In May 2009, AmericanExpress.com posted an article called How Your Small Business Can Survive the Recession. It included a list of 15 tips that fell into one of several categories of actions: reduce and slow down cash outflows; increase and speed up cash inflows; position your business for a recessionary environment; and get your team to be more productive than they’ve ever been.
Not all the tips are necessarily relevant for brick-and-mortar operations in the pet industry, but a couple stood out.
Under the heading of “increase and speed up cash inflows,” the article advised readers to focus on keeping existing customers. Finding new ones in a struggling economy would be welcome, of course, but making sure to retain customer loyalty among existing shoppers can be paramount to staying afloat.
“Now is the time to remind your customers why they chose you in the first place,” wrote author Gregory Go of financial advice website Wise Bread. “If it’s because you’re the most cost-effective, remind your customers that your low prices are even more important during the recession. If you’re not the cheapest, but you offer a premier product or superior customer service, remind your customers of the exceptional value you offer—and that price may not be the most important factor when determining total cost of ownership.”
It’s easy to see how the latter might apply to, for example, a small but high-end antique store. However, arguably, the advice is equally applicable to a pet specialty store and the goods it offers. High-quality pet food, for instance, might not be the cheapest, but cost may not be the most important factor when considering a pet’s health and longevity is at stake—not to mention, the correlation between quality food and the potential for fewer vet visits in the future.
The article takes this focus on customer retention and communication a step further with the next tip, which recommended that businesses “double-down” on their best customers.
“Call, email or send a card to your best customers,” Go wrote. “Tell them you appreciate their loyalty and continued patronage. Ask them to come to you if they have any concerns and are looking to jump ship. Let them know you’re willing to work with them to keep their business.”
For today’s brick-and-mortar stores, working with customers might mean offering new services, such as online ordering and curbside pickup. It might mean revamping the product assortment to ensure it meets the needs of cash-strapped customers. Go’s tips also suggest that retailers need to communicate often, honestly and effectively with customers through whatever means they can. These days, social media, e-mail and other online routes seem to be what work for many.
As the saying goes, history is a great teacher. The pet industry has been through a lot, with many pet specialty retailers and product manufacturers having weathered previous storms. Hopefully, retailers can draw from that hard-earned knowledge while uncovering new ways to thrive in tough time