Supply Chain The Rules Still Apply
• Retailers have to continue to watch their operating expenses. If they had plans to open other stores in locations, I don't think they should postpone that. If they have good locations and they have signed leases, they should go forward with their plans.
• I don't think retailers should cut back in advertising. If anything, they need it more now to drive the customer into the stores. When advertising, loss leaders are not as important as they used to be. It's not exciting any more—consumers are numb to it. A better strategy would be to merchandise the product to make it easier for the customer to buy, add financing programs, or tie up a free product with a purchase. Those types of promotions will have more effect than a low-end, $69 VCR. Let's face it, on those loss leaders, the dealer is not going to make any money.
• Of course the morale of the people is important. Both retailers as well as manufacturers have to make sure the morale of the people is strong and not negative. At JVC, we're continuing scheduled meetings that we have planned—the marketing meetings, the product meetings and so forth. Retailers are going to come in and review the new products the same time as we do every year. We're not changing our daily responsibilities. We're going to continually strive to hit our sales targets. I believe this situation is not permanent. We'll get through it, like we have other tough times. Usually our products do well under tough situations, where the consumers spend time at home—in the audio business as well as the video business.