Key Trends Affecting Retailers

Our experienced team at Total Wholesale, LLC is comprised of retail, distribution and finance experts that have been operating in their respective fields for over 35 years.  To stay ahead in the ever-evolving wholesale industry, we closely monitor market trends that influence the consumer behaviors of retail customers across all demographic groups.

Recent headlines over the last 24 months have highlighted the significant challenges faced by businesses.  Store closures – whether retail stores, drug stores, convenience stores, or supermarkets – have left consumers in the lurch in their local markets.  

Key Trends Affecting Retailers

Understanding the key trends affecting various market segments is crucial for staying profitable and competitive. Whether you’re a retailer in the luxury, middle, discount, or budget market, these trends are shaping the future of retail:

1. Inflation
2. Shrinkage (shoplifting)
3. Security

Inflation is an insidious tax on workers, eroding the value of their paychecks while driving up the cost of consumer goods. As a result, consumers have less disposable income for necessities and they shift their spending from their typical retail outlets and focus on discount and budget stores.  This shift also sees higher-income earners moving down from the luxury and middle market retailers to the discount and budget retailers.  Despite this trend, many budget and discount retailers are shuttering their stores due to unprofitable operations and the need to cut overhead costs.  When this occurs, both rural and urban consumers have fewer convenient shopping options, sometimes leaving them with no local choices at all in their own neighborhoods and communities.

Shrinkage is a tax on consumers.  Corporations do not lose money for long periods of time without going out of business.  Shrinkage once was defined as small losses that a retailer would incur due to the return of damaged goods, goods that were not saleable, outdated inventory, and discounting to move slow moving inventory below their cost.  

Shrinkage is now more commonly a result of flash mobs coming to a retailer and clearing out entire sections of the store, or literally walking out of the store with goods under a certain value threshold set by local government that is not deemed a crime any longer – a tolerance for shoplifting if you will. 

In the past, shrinkage accounted for a fraction of a retailer’s sales and had no discernable impact on their profitability.  Now, it is calculated as a percentage of sales.  If a given retailer has shrinkage of five percent, that retailer has to raise prices in order to recover the cost of those goods and the anticipated profit when those goods were sold to a typical consumer.  This means the cost of products are increasing to cover the shrinkage.

Security concerns are now an issue whenever leaving your home and venturing into public spaces.  Many consumers are avoiding major retail stores due to fears of flash mob thefts, slow police response times during altercations, and the brazen nature of criminal activities since there are few consequences for criminals these days.  Retailers, too, are advising employees against confronting shoplifters and flash mobs to avoid liability claims from potential injuries. As a result, more consumers are turning to online shopping, given the limited options of local retail outlets.   

Staying Ahead with Pop-Up Stores

While these trends are concerning, they also present opportunities for entrepreneurs to offer quality goods to their communities at discounted prices. One effective strategy is to launch a pop-up shop. We encourage our clients to set up pop-up retail stores, which enables them to provide quality branded merchandise to their neighbors at attractive prices.  This approach helps communities manage inflation and the rising cost of goods due to shrinkage, all within a secure and convenient environment close to home.

Some additional benefits of pop-up shops include:

1. Reduced Overhead Costs: Pop-up shops typically have lower operation costs compared to permanent stores.  This allows business owners to pass on saving to customers.
2. Flexibility and Adaptability: Pop-up shops can quickly adapt to changing market conditions and consumer demands.  This flexibility is helps in providing timely solutions to the community’s needs.
3. Enhanced Security Measures: Pop-up shops implement targeted security measures to reduce the risk of shrinkage.  By being smaller and more manageable, they can create a safer shopping environment, which is crucial in areas affected by high rates of retail theft. 

By leveraging these benefits, pop-up shops can play a vital role in helping communities combat inflation and rising costs, while also providing a unique shopping experience. Many well-known discount and budget retailers source their products from Total Wholesale LLC.  Inquire now and discover the power of bulk inventory. At Total Wholesale LLC, we’re dedicated to supporting the success of our clients every step of the way.  All of our merchandise is owned by Total Wholesale LLC and available for immediate delivery. Order a truckload today and receive a 5% discount on your order.