Tough Times or Opportunities Knocking?

Sep 30, 2008 7:50 PM  By

As I write this, it’s been another week of doom and gloom. Financial markets are in turmoil. On some days, local gas prices gyrate up and down 10 to 20 cents a gallon. And several large national organizations released their annual forecast of Christmas sales.

The predictions are not good. Deloitte & Touche, the New York accounting giant, forecasts a 2.5% to 3% increase for the 2008 shopping season. TNS Retail Forward of Columbus, OH, projects a fourth quarter retail sales increase of only 1.5%. The National Retail Federation forecast is that sales will rise 2.2%. The Wall Street Journal summed all this up by saying, “In a spate of morose predictions for the retail industry this week, economists say the 2008 holiday season will have the weakest sales gains in 17 years.”

The WSJ piece was accompanied by a chart that I found interesting, from a number of perspectives. I have always considered myself a student of the retail world, but somehow I lost track of the long-term perspective from 1990 through this year.

While each year’s percent change from a year earlier rises and falls, I didn’t recognize the overall downward trend over the years that the chart clearly shows. This tells me that our all-or-nothing dependence on fourth quarter sales—and our expectation of perennial increases—may be misguided.

One thing I know for sure is that all our clients would love to rely less on the fourth-quarter Christmas business that has become such a make-or-break factor. Maybe the only answer is to force our selves to acquire, start up or develop nonpeak fourth quarter businesses.

Things aren’t rosy out there, so you may find my talking about acquisitions and start-ups strange. But I am encouraged by the opportunities that I see our clients taking advantage of. Here are some of the projects we are currently involved with:

–The management of a $17 million business made a decision to outsource to a third-party fulfillment provider after 30 years of operations. They did this because our study showed how they could cut significant fulfillment costs. We have seen more successful outsourcing in the past two years than in many years.

–Another client is taking advantage of losing its warehouse lease by opening an additional facility in a more strategic location closer to its East Coast customers, thereby saving on outbound freight costs.

–A business-to-business company has seen large sales increases from increasing its outbound sales staff and program to proactively solicit customer orders and establish a single point of contact to nurture the relationship. The company also has made significant strides in reactivating customers with these sales people.

–For a retail client that acquired another merchant, we are helping to consolidate down distribution and squeeze out the savings that are possible.

–And finally, every month we find where more savings are possible for clients through renegotiation of inbound and outbound freight costs.

It is my hope that your companies and employees use this time to actively search for and find all the opportunities that are out there.

Curt Barry is president of F. Curtis Barry & Co. (www.fcbco.com), a multichannel operations and fulfillment consulting firm with expertise in systems, warehouse, call center, inventory and benchmarking.