Are retailers ready for war?
What effect would a major confrontation between major powers have on Australian retail. The short answer is ‘profound’.
Is there one retailer in Australia who has prepared any scenarios or strategies in case the unthinkable happens? Or are we relying on being down under which immunises us from what is happening in the rest of the world?
It doesn’t really matter who throws bombs at who. Confrontation causes uncertainty and uncertainty creates low risk behaviour. Which means that people’s spending habits change. Overall there is a contraction with some product categories unable to sell much at all while other categories are sold out and shortages are created.
So what kind of products do people buy under these circumstances and do they hoard?
The first things that people buy are aimed at self preservation. Food, water, medical supplies, pharmaceuticals and maybe practical clothing. Then there are items such as generators, chain saws, fuel, barbecues, radios, walkie talkies and the like. Maybe even boats.
Forget fancy jewellery, designer clothes, and anything extravagant. Consider investment commodities such as gold, diamonds and other precious metals, which saved many a person from starvation when fleeing conflict during World War 2.
And so there is an abundance of some stock that can’t be sold at any price and at the opposite end of the spectrum the supermarket shelves for canned food are empty.
All overly dramatic stuff you say but war is like an insidious disease. It creeps up on you. And when you realise what is happening so does everyone else.
So what can we as retailers do about it?
Be extremely agile. Have a game plan. If you have a hardware chain, have a list of what you believe people will want and if and when the time comes, hit the ‘buy big’ button. If you are a couturier, consider your options. Liquidate stock quickly or simply close your doors for a while. And a whole raft of strategies in between.
But what will you do?
Probably what everyone else is doing.
Stuart Bennie is a retail consultant at Impact Retailing and can be contacted at email@example.com or 0414 631 702.
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