The Walmart, Target Missing Message is Included in Main Street Inventory Items

For the past few decades, the narrative of the retail battle has been based on one of these wars. Amazon E-commerce and major brick-and-mortar retailers are at odds with each other. And everyone is against everything small. Main Street contractors. But in today’s confusing economic environment – ​​marked by inflation, supply chain bottlenecks and a volatility in consumer consumption patterns due to post-Covid high prices – small business experts Main Street say you should be more positive about the many benefits of being small.

Inventory buildups and subsequent markdowns at top retailers such as Walmart TargetThisThis illustrate that even the best consumer economists are susceptible to mistakes in this economic environment. In small businesses, owners may be better able to manage an ever-changing environment because they are closer to customers and suppliers.

This is Get Get the Best Advice Nada Sanders, Northeastern University A Distinguished Professor of Supply Chain Management She CNBC. Small Business Playbook Virtual Summit On Wednesday, she was “magnificent and abysmal” in It’s possible to look to the future, despite the negative aspects of the past. There are still plenty of opportunities in the current economic climate.

“Actually, I see this as a tremendous opportunity. I really do. Especially for small businesses,” Sanders said.

She There Three areas entrepreneurs should focus on are forecasting and business development.

“Big companies are really struggling with this,” said expert and academic SandersHe Forecasting. “We see it, obviously, with retailers. Walmart, target.

Talk Directly Customers can help understand changing consumer demands

His opinion is that large companies are too dependent on their inventory algorithms to forecast data. However, the current economy has broken many historic patterns. “The historical data in this space right now is not really good data. It is not clean data, it does not indicate the future which is very volatile,” she said.

This Small business owners have the opportunity to build relationships with customers and learn about their needs. An algorithm An cannot calculate a benefit that is not easily quantifiable.

While a small business can be B2B (or both) Sanders It On thinks direct communication is a good idea. “real response” They We are currently tackling changing consumer behavior.

“What I see with big companies, they’re trying to hire futurists and trying to find ways to actually predict demand. But every time we look at the numbers, the consumer price index, all of that, we’re looking back,” Sanders said. “The fact is we’re in a very rapidly changing landscape and I think we have to look to the future. Small business owners really need to connect and use their judgment to predict and understand what their customers need. »

“As a small business owner on a tight budget… you don’t even need the really heavy AI, which I think is a bit nervous for a lot of small business owners. … You can actually make a lot of gains with very simple solutions,” Sanders said, “When you’re a small business, you have end-to-end control that a big business doesn’t. I see this as a very big opportunity,” she added.

Main Street It already believes it’s in a recession

This will be a challenge for entrepreneurs to see as a positive. Data This This shows that the mood is current Main Street I’m pessimistic. The |SurveyMonkey Small Business Survey for Q3 2022 The results showed that small businesses were at an all-time high in confidence. Many small businesses have identified inflation as the biggest danger.

According to the Q3 survey, a growing number of small businesses are anticipating a decline in sales over the next 12 months as they believe the economy has entered a recession. The Poor’s sales outlook was the main factor behind historically low confidence levels. And according to The survey found that only 13% think now is the time for small businesses to pass price increases on to their customers as they face rising costs of inputs, labor or transportation.

How to Fix Prices During Inflation

But small businesses can also communicate directly and effectively with customers to find solutions.

Jeffrey Robinson, Rutgers Business School ProvostCo-founder of the Center for Urban Entrepreneurship Economic DevelopmentAt the Small Business Playbook Virtual Summit. The biggest mistake business owners make when pricing products correctly is virtual summiting. In entrepreneurs, they must ensure that they thoroughly analyze all the costs associated with producing new products in times of high inflation. The traditional way companies set prices – decide on the product, then once it’s available, look at what competitors are charging – is not the way to operate in this economy. It is important for small business owners to know their costs before setting prices.

“All of those prices along the supply chain have gone up,” Robinson said. “Shipping costs…anything that has a transportation element involved, those costs have gone up. So evaluating and valuing your product or service that you provide with those costs, before setting the price, allows you to set the price at the right level,” he said.

And the hardest part is explaining it to customers. Robinson Le A direct relationship between small businesses and their customers is also an advantage.

“We have relationships. Talk,” he said. “Explore. You have to explain to them that the costs have gone up for those components. “In order for me to do that, I have to change some prices,” he said.

Helping Him To ensure they are able to price fairly, customers need to understand the inflation situation of a company’s supply chain. At the end. Robinson It This is similar to a restaurant listing the price of fish on its menu. “market price.” That This This may be a simple example, but it still resonates today.

Some need to be open and transparent with your customers about price changes. Restaurants must post signs during times of inflation. While I did not comment on the specifics of this method, I did state that businesses should have some sort of conversation with customers and potential customers about price differences between the current year and the previous two years. . While survey data shows small business owners are hesitant to have this conversation. Robinson But they shouldn’t.

“I think a lot of consumers understand that, especially if you’re a business-to-consumer type of business,” he said. “It’s about being transparent…helping people understand that prices are changing.”

Map supply chain analysis with key suppliers

It is important that you have a conversation about suppliers. Sanders The Data suggests that 88% of companies spend on their suppliers. What is best to focus on business partners and know where to go to establish a partnership. “As a small business, that’s really what it’s going to be about,” Sanders said. “What I think you need to do as a small business is really be able to map your supply chain for your key items, talk to your suppliers, really partner,” he said. she declared.

Large companies have less visibility into their suppliers than their Tier 1 counterparts, study finds. SandersMany It’s harder to track items further down supply chains. “level four, level five,” she spoke.

Small businesses can map their supply chain and work with partners to identify risks and see the entire chain. Currently, retail inventory issues could make small business owners more reluctant to stock up, even though it’s the start of peak shopping season, with back to school and then the holidays. Sanders She She said she believes in the benefits of running for office. Operation “lean”, but in the current economic context, “we have to implement certain caveats as to the meaning of lean”.

Small businesses will need to stock more items, items that are critical and require a longer lead time, and items that are likely to increase in price. All businesses Additionally, you should examine your production process to determine if there are any alternatives that could be used to reduce costs. Keeping additional inventories “goes against lean,” she added, “the benefit for a small business is really being able to manage at the same time, upstream and downstream, and coordinate them “.

The mismatch between supply and demand is today’s biggest problem. Sanders It’s Back to the Walmart Target Problem What can small business owners do to improve the situation? It is important to have open and honest conversations with suppliers and end customers.

“Big companies are dinosaurs. … They are very heavy, bureaucratic. As a small business you are very flexible,” she said.

Small business owners need to look up and down. “But watch them at the same time, really marry them, watch them and connect with customers, connect with all the vendors,” Sanders said. “Big companies can’t do that. They are stuck because they have huge silos. As a small business, you don’t have that, so take advantage of it now.