16 JAN-FEB 09
In some ways I think we can come to accept the current retail climate by first understanding Kubler-Ross’s “Five Stages of Grief.” In her book entitled On Death and Dying originally published in 1969 Dr. Elisabeth Kubler-Ross pioneered methods of support and counseling during personal trauma and the grieving process associated with death. Her ideas known as the Five Stages of Grief model are easily adaptable to personal change and emotional upset and don’t have to be relegated to dying. The five stages are denial anger bargaining depression and acceptance. I have observed retailers dealing with the economic state of flux that we are currently living with—and many are going through a process very similar to what Kubler-Ross outlined. See if you have ever experienced any of the emotions described below.
Denial
When a retailer first notices slow business in general or items not selling as they should denial is often the first emotion felt. “This can’t be right” “the POS information is wrong” “I have all the right vendors and styles” and so on are immediate reactions. “There is nothing wrong with my merchandise.” In this stage the retailer keeps plodding along anticipating things will soon change.
Anger
Denial usually morphs into anger. I would lump “blame” into this stage because the outlet for retailer anger can be blaming someone or something: The vendors shipped late the fit is bad the customers don’t understand our store the weather is too good or too bad the landlord hasn’t done anything to promote the center and advertising isn’t effective. The list of what to blame is endless. In this stage the retailer can’t deny what is happening any longer has admitted such is mad and is looking for someone at whom he can point the finger.
Bargaining
The bargaining phase can take many forms. Initially re-merchandising the selling floor may prove fruitful. Changing displays gives the customer the appearance of new shipments of merchandise often a stimulus to sales.
Spiffs and Push Money
Sometimes spiffs or PMs (push money) are the next course of action. The idea here is to provide the salespeople with an added incentive while maintaining full price and preserving gross margin. This method can be very effective if it is not overused. Let’s say you decide to give a $5 spiff on a my keyword00 model that is slow. In effect that is equal to a 5% markdown—which most retailers today would agree is wasted effort. Yet an extra $5 per pair in a salesperson’s pocket might just work.
Vendor Returns
Vendor returns are another form of retail bargaining. This is an effective technique used to return poorly fitting styles for credit or slow-selling merchandise for newer inventory that will hopefully sell faster. This privilege should not be abused but is a good way to maintain margin and/or reduce stock level.
Markdowns
The final bargaining tool available to the retailer is of course the markdown: Reduce the price in the hope of a quick sale. You can tell that this is the last straw for the retailer—they don’t want to see the merchandise again which means a stricter return policy.
Depression
Retailer depression can itself have several levels and can be of indefinite duration. Sometimes the depression sets in after the initial response to a markdown is not up to expectation. Other times the markdown is taken too late in the season or not deep enough to rectify the problem leading to poor results. With all of the store doom and gloom heaped upon us by the media lately coupled with more store closings than we have ever seen at one time it is easy to understand how depression could set in.
Acceptance
Once a retailer accepts the current sit-
Moving Forward
Whatever the situation may be he or she is now ready to move forward. That will involve resolving not to let themselves get into the same situation again—by planning better buying smarter being more aggressive with vendor returns canceling late shipments or being quicker with markdowns. Now the retailer is truly at a point where he or she can move forward rationally and positively hopefully having learned from the experience.
Recognizing the Cycle
Perhaps you have recognized this cycle or portions of it in yourself. If you are experiencing or have experienced some of these stages you are normal. The problems arise when we get stuck in any one phase for an extended period and can’t find a way to quickly move into the final stage of acceptance. In reaching acceptance most retailers find it helpful to speak with someone outside of immediate family or coworkers. Accountants bankers trade associations and retail consultants are oftentimes helpful in identifying the real cause of the problem and mentoring the store in finding satisfactory solutions.
Leadership in Hard Times
Many business leaders think that in hard times they need to put the company on their own shoulders call the shots create a survival strategy and personally execute it. But recent research suggests that instead of “hogging the ball” during tight economic times great leaders get help from others. They listen to employees and customers they seek out fellow business leaders they talk to people who understand their company.
Networking for Success
This option is typically more cost-effective by far than continually going it alone—which often nets less than favorable results. When you network with colleagues you almost always get a new perspective which can lead to new ideas and solutions. In this economic climate we need to talk–and listen–carefully to each other. As we network we strengthen our ability to adapt—which in tough times is essential.
Ritchie Sayner is vice president of business development at RMSA Retail Solutions which works with retailers to improve performance. He can be reached at rsayner@rmsa.com.
Summary
The article explores how retailers can navigate the current economic challenges by understanding and applying Kubler-Ross’s “Five Stages of Grief” model which includes denial anger bargaining depression and acceptance. By recognizing these stages retailers can better manage their emotional responses to business downturns and adopt strategies such as networking and seeking external advice to move forward positively.
“The problems arise when we get stuck in any one phase for an extended period and can’t find a way to quickly move into the final stage of acceptance.”
Real-World Examples of the Five Stages of Grief in Retail
The Five Stages of Grief model can be applied to various real-world scenarios including the retail industry. Here are some examples of how retailers might experience these stages in response to economic challenges.
- A small clothing boutique experiences denial when they notice a decline in foot traffic and sales attributing it to temporary factors like bad weather rather than acknowledging broader market trends.
- An electronics store owner feels anger and blames poor sales on external factors such as delayed shipments from suppliers or ineffective advertising campaigns rather than analyzing internal business practices.
- A furniture retailer enters the bargaining stage by offering special promotions and incentives to sales staff to boost sales of slow-moving inventory hoping to avoid markdowns and maintain profit margins.
