Volatility Is the Only Constant
As I write this, there is no good economic news: consumer confidence has hit rock bottom, stock markets have sunk to a yearly low, new orders to global manufacturers have contracted and the chance of another recession inches closer each day. Volatility rules the day. But, then again, volatility has been the one constant in the market since the "recovery" began.
We have grown used to the onslaught of bad economic news one day, have it tempered by a slight glimmer of hope the next, only to be thrown into darkness the following day.
The best retailers, though, have spent the last four years weathering the worst of the storm, toughening up as they strengthen their business models and preparing to take advantage of any and all opportunities, no matter how infrequently they arise.
CE retailers that survived the last four years are more than capable of lasting another 40. No matter how bad things get (most segments of the economy will hit a few more troughs before jobs and the housing market begin to improve by mid 2013) retailers today are constantly operating for the worst of times, and they have become better because of it.
At CEDIA Expo we came across several dealers who said their revenue has increased by 20 percent and more over last year, with profits not far behind. General CE dealers at the recent buying group shows have also reported improved sales. We know they're not alone.
While none of those dealers said things are getting easier, all of them continue to benefit from the measures they've taken during the last four years to strengthen their businesses: cutting payrolls, shrinking inventory, greasing supply chains, tightening end-to-end forecasting, improving efficiencies, taking advantage of cheap real estate and low interest rates, building e-commerce initiatives etc... That leaner, smarter operational model is the new normal and will be for many years to come.