Retail takes it in the face first 😁

I’ve been thinking a lot these past few months about how retail really exists on the front lines of American culture and society. I’m no economist, but I think it has to do with the fact that how we choose to spend (or not spend) money is a real-time reflection of our priorities and preferences. Put all of us together making many small financial decisions (and transactions) on a daily and weekly basis, and the impact is hard to ignore.

Retail takes it in the face first.

Let’s think of some of the recent cultural “events,” and let’s exclude COVID. We’re all painfully aware of how the retail industry was first in line to be decimated by COVID, but that’s a circumstance that is above and beyond what I’m talking about here.

So here are some less terrible events that hit retail in short order:

The Barbie Movie

Barbiecore took over and tried to make everything we consumed Pantone 219C pink. While this was truly the trendiest of quick-cycling trends, all that pink was sold and consumed via retail businesses.

Dry January

The wellness industry (retail adjacent) tells us that we need to cut back on booze, and so we shift our spending from wine and cocktails to…I’m not sure, really. No and low-ABV drinks? Retail. The cannabis industry? Retail? Juice bars? Retail.

Ozempic and her GLP-1 sisters

I followed a thread in a retail message board about how all these women’s boutique owners are having to shift their inventory purchases because so many of their customers have changed sizes dramatically and rapidly.

And then later that week, The Wall Street Journal reported that food marketers are shying away from “craveable” marketing now that it doesn’t really work among people who just aren’t craving anymore. So if clothing stores are affected, and so are grocery stores and restaurants, retail weathers the storm once again.

I remember back in 2012, seemingly overnight, customers at my restaurant started asking if we had gluten free options or if this or that dish contained gluten. Along with much of America, we had only learned the word “gluten” about a month before. But at that moment, we were expected not only to know what it was, but to have adapted our menu, our training, and our systems to meet a new demand.

So if it’s a given that retail – the industry that feels our spending choices immediately – is always going to feel the effects of our cultural shifts first, as retailers we have to secure what we can and be prepared to pivot with the rest.

And yet… regular readers of this newsletter know that leases and pivots don’t exactly go together — your lease is a behemoth battleship whose path was predetermined long ago. It was not designed to bob and weave… or to pivot, ever.

I’ll be honest - it's a bit unfair, and one more example on a very long list of how the job of retailing is so challenging. So here are a couple ideas on how you can maneuver within the framework of your existing lease:

• Flex within your Permitted Use clause – Adjust to trends, but don’t scrap your business plan everytime something new comes along. Your business concept (and Permitted Use clause) should be somewhat evergreen - something that can withstand the test of a five- or ten-year lease term - but that allows you to adapt and adjust to relevant trends.
• Take advantage of Permitted Closures – Need to close up shop for a week to redecorate the space? Or to “count inventory” while you hold a strategy session or retrain on customer service or operations with your team?
 Take advantage of your right to close for a few days when it serves you.

A space that works for your business, allows you the flexibility to grow and maneuver, and locks in a predictable (and affordable) rent rate is about as good as it gets in terms of long term stability.

Tell us about a time when YOU had to pivot your business. (I know some of you could write a book on the topic.)