But his words – and those of his co-panelists N Brown chief executive Alan White and Verdict lead retail analyst Maureen Hinton – should provide food for thought to retailers.
Mulcahy was referring to retailers that, in the battle to fend off the gloom cast on the fight to stay afloat in 2008, try to make the seemingly easiest cut to rising costs by slashing their workforce.
The knee-jerk reaction may in fact prolong the agony of retailers that need to assure, now more than ever, that their customer service is a number one priority. Without feet on the shopfloor, who will tell customers why they should part with their closely guarded cash at one retailer over another?
Hinton pointed out that offering this service should be as basic a housekeeping rule as making sure you have products on the shelves.
“If you are cutting back on your human capital, then you are making a bad decision. You have got to decide where you are going to cut your costs so you can invest where you can make value for your proposition,” she said. “The fact that the economy is difficult is really background.”
Retailers have always needed to justify to customers why they should purchase higher margin products at higher prices, as well as focusing on the inherent value that they can create – and value doesn’t just mean low prices.
What often gets forgotten in the mire of doom and gloom churned out by newspapers is that retail has never been able to afford to rest on its laurels.
With rising costs and a saturated market, weaker players are bound to fall out of the market – whatever the state of the economy – so the more resilient counterparts need to sharpen up their offer to customers even more than usual. As Mulcahy said: “What is for sure, is that what is good enough for today is not good enough for tomorrow.”
The panel agreed that if retailers are able to inspire customers and present something to them that they never even knew they wanted before they entered the store, then opportunities remain to shine in 2008 and beyond.
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