The following is a lightly edited transcription from the May 14, 2020 live interview with Flora Delaney and Third Haus founders, Chris Walton and Anne Mezzenga. The full video interview is available here.
Companies are going back to see what they learned in 2008-2009 to find winning retail Covid strategies. What happened then can help us predict changes in shopping habits. What do people do when their income is restricted? When they’re worried about what they can spend money on? What comes back first? What comes back second? You know, apparel is going to have a long, hard slog unless you’re –you know –yoga pants and tank tops. I think those will do well as long as you can deliver them.
CHRIS & ANNE:
Those are going to do great. But you don’t want to be Ann Taylor right now. You don’t want to be selling Brooks Brothers. Or any of those companies.
You don’t want to be selling anything from the waist down basically.
One of the things we know when we start thing about what should I thinking about when I select SKU’s for holiday and for later this fall and for back to school. What does that look like? You know, people still have birthdays. People have celebrations.
But what we learned in 2008 -2009 was that people would give themselves small indulgences. That was a really big deal: the small indulgence, right? That was when we saw things like chunky monkey caramel corn with chocolate. Like this amazingly little thing of candy for 12 bucks. I might splurge for only $12 right? I didn’t go by myself shoes or a necklace or a vacation. But I was going to treat myself with candy or I was going to get myself some nice make up. We saw interesting things about what popped and what people are comfortable with. And it always came back to a small, affordable indulgence.
What does that mean when people are in a really tough bind in the economy? People are unemployed and worried about meals and mortgages and bills. So as a retailer who is meant to try to entice you to let go of that money, what can they put in front of their customers?
And it’s going to be more price promotions that hit those great price points. $.99, $9.99, $19.99
Don’t tell me I can “get 4 for the price of 3” because I really just want one. Those multiple promotions are not gonna be as enticing.
The “buy this now and get $20 off later” is not going to be as enticing because I don’t want that future savings. I need savings right now.
Then layer in something that’s gonna be a small indulgence? Something nice that I can find affordable. It is treating myself well but that’s about as far as I can go.
Those are the things that retailers need to adjust now because if they had this plan that they could get a $2400 TV at a really hot price and they can get it down to $1200 it’s still probably only going to appeal to a very limited amount of people.
We have quite a and diverse audience today and so as you’re thinking about your advice that you might impart on them from people who work in store design as they’re thinking about how to help their retail clients specially coming into Holiday, about vendors, and thinking about the retailers …what piece of advice can you give them as they take on the next few months here?
Well, it isn’t my original thought but I will tell you what I heard somebody say and I was like that is so on target. It was “if you want to talk to me about your consumer research and it was done before February I don’t wanna hear it.” I think that’s really true.
I think that if you or any part of your organization or your company goals or whatever are still built around when we get back to whatever January looked like.. whatever those plans were …if you’re still holding onto those, you need to let that shit go. That is not going to happen.
It Is not it’s not your fault and it’s not the company’s fault and nobody has to go down with the ship on that. But you need to reevaluate all those initiatives: your capital spend, what you thought you were going to get accomplished this year. And say this year staying open, serving my customers and keeping my employees engaged– that’s the best I can help for. Whatever market share gain you thought you were going to have or new item introduction you planned, whatever that was that you thought you were going to do –you probably need to pull back on that and re-look at everything again.
Pull out those lessons learned form 2008-2009. Hopefully your company did a lessons learned and there’s some good things from that you’re going to pick out of there.Go back to it to find your winning Covid retail strategies. Get back to the Timeless Fundamentals. Go find the things that were true. That we said the next time there’s a big economic downturn: “remember that.” Go back and find that. Resurrect that document. Figure it out and start putting that stuff in place NOW.