People spend less during recessions when the economy is weaker and their disposable income is lower. Hence, companies must come up with innovative techniques to boost their sales during a recession if they want to remain competitive. The economy can change directions at any time and always being ready is essential. If you do not have a plan, a recession may have an impact on your company’s sales.
The idea that companies will experience lower sales during a recession is widely held. The market really is still as competitive as it was previously. Depending on the products or services, during a recession, sales might increase as well. However, if you are unable to keep up with the competition, you risk shutting your doors to rival businesses.
Companies are both recession and depression-proof, depending on how an entrepreneur looks at them. Therefore, it is time for Sri Lanka’s retail merchants to follow the recession-proof theory and choose what to provide and how to present it to a literally depressed and cash-strapped majority of customers. Regardless of a nation’s socioeconomic standing, the general global tendency shows that consumers prefer less expensive goods and services right away when going through a national financial disaster.
Without a doubt, Sri Lanka is in a crisis. Effective crisis management will determine whether merchants succeed or fail, regardless of how big or small their business is. They stand a decent chance if they put enough effort into the future and see the crisis as an opportunity.
An opportunity
They have a decent possibility of recovery and even development if they put enough effort into the future and view the crisis as an opportunity. With limited foot traffic, slow sales, and restricted cash flow, it will not be a simple task. However, retailers must make an effort to capitalise on the idea that customers always prefer to shop independently because doing so gives them a sense of control, especially when buying consumables.
The retailer must first prepare and come up with a plan to resume operations after the general negative impressions diminish. The current crisis will inevitably end sooner or later, just as it has happened in the past. Therefore, the retailers must not panic, but in order to offset fixed costs incurred during the troubled period, they will need to make up for lost sales.
Therefore, it is necessary to investigate how the product or service might be modified to suit the novel circumstance, or whether such a move is necessary. Hence, business owners must devise strategies to reach out to both current and potential customers with a compelling message through the most appropriate relevant channels.
In this sense, retailers can efficiently use street promotion drives close to the store, handouts, point-of-sale advertisements, and social media. In my opinion, a small or medium-sized business’s Facebook account can be an essential method for communicating with clients if it is strong, innovative, and regularly updated.
Smart move
Moving outside is a smart move when a trader wants to increase foot traffic, which is the main goal of retail. It may be quite successful to enter a neighbouring sidewalk with a catchy statement that is perhaps relevant to the current situation. People may become intrigued and desire to check it out when things are moved out with a well-made outlook. This might even draw in clients who are often uninterested.
Amazing effects will come from organising an event in the shop. Invite your clients while asking for their assistance. The Sri Lankan culture is such that they certainly will not abandon or disregard your efforts to recover. Instead of visiting the same unenthusiastic daily store, customers who were depressed for a considerable period due to various incidents that took place recently may even enjoy a stimulating and lively new setting. Many retail establishments use this strategy to draw clients during slow seasons or even normal times.
To enhance the appeal of the event and attracting more attendees, the vendor may also provide a suitable promotional item that is perfectly suited or necessarily essential to the current circumstances.
Remodelling the store is a good idea at this time of distress. Customers who have already visited the store will value and admire a new setup and a more positive view. If you want to add unique decorations or arrangements to your business, you do not need to be a talented designer.
Simple changes like moving furniture, painting the walls a different colour, adding flower pots, and similar things can make a difference. After a challenging period, the general public seeks originality. As a wise retailer, you can therefore fully benefit from this to boost customer traffic.
Another positive step to take is to devise a straightforward short-term financial plan to address the pressing issues since you have already suffered as a result of the widespread unrest. Check out any new and useful financial concessions through banks and other financial institutions that can support the plan. It’s important to keep an eye on all potential governmental aid initiatives that will be implemented to address the ongoing economic issues.
It makes sense to revisit the rate with your product providers in light of the current circumstances. Retailers need to keep in mind that they are equally impacted and eager to rebuild. Treat this as an opportunity to lower buying rates so that, if you are successful, you may pass some of the extra benefits on to your own customers. In a similar vein, the retailer may negotiate lower prices with service providers for things like equipment rentals, transport, store rent, insurance premiums, and janitorial services.
Streamlining operations
Reducing the cost of running your business is a good strategy. Finding methods to conserve money is more crucial than ever during a recession. By lowering operating expenses, organisations can achieve this, among other things. Outsourcing or contracting individual freelancers can be an effective strategy in this context. This can streamline some of the operational costs while raising profit margins.
Because consumers are constantly looking for inexpensive and accessible solutions at this time, reducing the cost of purchases is an efficient strategy for surviving a downturn. However, when subsidising, be careful to avoid degrading or lowering the product quality because it may count more than the price disparity. When purchasing a product, your consumers and prospects always want the highest quality, even when they purchase at lower prices.
The challenge is to maintain quality while remaining competitive and cost-effective in your sector. With this approach, you can increase your clients and prospects because, during a recession, people desire to acquire things that are inexpensive and accessible.
Finally, during a slump, it is even tough for the most efficient retailers to perform in retail due to many restrictions. Slashing discretionary expenses and increasing marketing and selling efforts will lead to survival during the crisis and potential growth after the dark clouds pass away.
However, as retail trade is completely consumer-oriented, beyond and above the ingenuity of the entrepreneurs, small business entities need support from others. Large companies can immensely help them by means such as longer credit, temporary price reductions, and more importantly, street promotions, and even technology.
Similarly, the government also has an important role to play in the survival of retailers who make a substantial contribution to the national economy. They can provide financial assistance through special schemes with the help of banks and other financial institutions. They can perhaps promote policy changes to protect the retail trade industry.