5 minute read
Barking Mad
Pramland’s John Barker is taking a view on customer spending habits, how this has altered amongst the ‘Cost of Living’ crisis and action that Pramland has taken to assist.
Hi everyone, I hope you are all well. Finally, the kids are heading back to school and the summer holidays are coming to an end. All good news for us retailers that are having to fight for every penny in our customers pockets. Fingers crossed, you, like us have continued to be busy despite the continuing economic downturn.
Whilst I was sipping a cup of coffee this morning, I thought it would be wise to have a look at some figures. I have been saying to the team for a few weeks now that customers haven’t changed what they are buying, instead they’ve just changed the way they buy it. We, like so many of you offer a lay-away scheme (our industry was built on it after all) and it still accounts for the vast majority of the orders we receive. If we look back over the past couple of years (even taking into account Covid) it was very easy to see a pattern to how our customers shopped with us. Historically we have got used to customers ordering with a 20% deposit and without fail calling at the end of each month thereafter in order to pay some money on to their account. On an average pram of £1000 you’d be talking £200 upfront and more than likely another £200 each month until baby arrived, when any balance would be cleared. It didn’t take long to build up a steady, and regular payment pattern especially once you start filling your order book with 100 prams or more.
The first thing that has changed is a 20% deposit is no longer acceptable to many people. Trying to get 20% is tough as many of you know. I’ve had more success trying to get Mrs B to stop buying shoes than getting 20% out of a parent to be. So, what’s the option? Well, there’s only one really – reduce this to an amount people are happier with, we’ve dropped to 10%. As a result of this reduction, we have seen an immediate increase in people’s willingness to order. The downside to this is the impact on the till ring. Halving your initial deposit is one thing but what came as little surprise to me was what happened next. A casual flick through my orders revealed that almost every order only had a deposit attached to it. No additional monthly payments. Order after order – deposit
john@pramland.co.uk
Image source Pexels.com
and balance on collection at the VERY END – nothing in between. It’s a startling difference – no longer are we seeing a lovely regular trickle of money hitting the till.
Don’t get me wrong, it’s hardly a major issue. The fact remains that new orders are being placed (albeit with a 50% reduction in the deposit and little or no chance of any additional money being paid until collection). If new orders weren’t being added, we would have something to worry and moan about. Furthermore, these balances will have to be paid eventually. A business like ours (and in turn yours too) is only as good as it’s order book after all. What it does mean is that we must adjust the way we are operating to account for this shift in customers spending habits. I estimated a 12 / 16 week lag period before we can class this as the new norm. At that point balances will be due on orders placed and once that starts it’s a steady stream once again of balances. We’ll soon adjust and fit in to this new 2 hit spending and just as we start to get comfy Mr and Mrs Parents To Be will move the goal posts again no doubt.
So, on this basis I would say that as we head to the last third of the year things are looking good – if not a little bit inconsistent. Inconsistent is definitely better than bad and that’s a little win in my book.
One trend that is very obvious at the end of the week is the swing away from weekends. Some of you will open 7 days like us, some of you will close a day or two during the week in order to open on a weekend. We all operate in a way that suits us and our business, we however have found that weekends can really stand out – for all the wrong reasons. Historically, we would find that the weekend was the one certainty, the cherry on the cake. In reality the past few months we’ve found weekends to be for window shopping, browsing or to coin a phrase, full of tyre kickers. We are seeing lots of footfall and spending lots of time demonstrating and assisting everyone that visits only for a staggering number of them to leave in order to “think it over” (this is customer code for either – check the price online or we don’t have the money right now). The encouraging thing is that they do return and order, invariably during the week.
As a result of this we’ve seen a swing between weekdays and weekends. It’s funny how after 5 very good weekdays trading your week can be spoilt by a less than stellar Saturday or Sunday. Even if after the 7 days you’ve hit what you want to hit. There’s just something about weekends that we seem to think must be the best days of the week. Who knows why we are seeing this shift? Maybe it’s because the kids have been off school and parents are wanting to spend less of their free time shopping? Quick whizz around, pick a pram and get mum to be to order during the week. It’s a mystery, and one I’m sure we will never fully understand. Until then I guess we’ll just have to look at the 7 days figures and worry less about individual days.
Anyway, that’s enough of that. I need to head off and continue organising my calendar for the Harrogate show! I can’t believe it’s next month! Where have the last 12 months gone? Next month I’ll be having a little look at what I’m expecting, hoping for and generally getting excited about spending a few days trawling around the hallowed halls of the Harrogate Exhibition Centre. Until then, stay safe and good luck.
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