Ok folks, if this isn't proof of why it's time for Plan B, then I'll be darned if I know what is. Americans are shopping down. What does that mean? Well, profile your customer. Who do you think your customer is? Now...sit back and ask yourself, did you make an assumption when you answered that question that your customer is the same customer from January 2008?
Let me tell you, you still may have customers...but they are different. People are shopping differently and many of your profiled customers have had to adjust their spending and are shopping elsewhere. Someone elses customers may be shopping you... but somewhere at some levels some businesses are seeing no customers. None from before and none from other categories or competitors. And trust me, no one is immune - businesses big and small have watched the thinning out of customer loyalty as the recession grips us all.
It's not so much that the relationships weren't there. In our heyday, hell, we all had the best strategies to grow our CRM and increase our ROI by investing through customer service and product guarantee tactics. But now, it's just a matter of consumers having much less in their wallets. Many of them are out of work.
The shuttering of brick and mortar biggies such as Circuit City doesn't pump more volume into Best Buy, in fact, it puts Best Buy in an even worse position to compete with the category busters like Walmart.
It's no different if you are a small to medium size business owner or working for a Fortune 500 Company. If you don't shift gears immediately and assess your customer profile and match your products/services to meet THEIR needs, not your old customer's needs or even worse, your needs, you will soon find yourself with no customers.
Shortly before Christmas I was in TJ Maxx and noted how crowded it was. I actually had to stalk the parking lot for a spot. They had just received a huge shipment of very high-end Italian handbags and the place was jammin'! The bags were flying out of the store but were priced way out of my price range at an whopping $400. I wondered, who is shopping in TJ Maxx that a $400.00 handbag would be flying out the door?My A-HA moment was when I realized that the Neiman Marcus shopper was here scoping out the bags that had originally retailed there for no less than $1,200.00.
So, the Neiman Marcus shopper is shopping TJ's, the TJ shopper is shopping Kohls and Walmart, the Kohls and Walmart shopper is shopping the Dollar Tree and the Dollar Tree profiled customer is either the same or not shopping at all.
The interesting thing to note is that the list of retailers below aren't just the high- end sort of businesses like Neiman Marcus. They are the businesses that didn't have their ducks in a row. They are the businesses that didn't see change in their customer profile.
You want to tell me that with all the news on housing start decreases and layoffs, that Home Depot couldn't see that they were going to get walloped if they didn't restructure their high-end Expo stores to serve more reasonable remodeling projects? The Great Indoors was the first to go...why would Home Depot be any different. And why are biggies like Lowes and Menards safe? Perhaps product or market diversification? I think, a better finger on the pulse of the core, yet wildly changing customer profile.
If I can leave you with any thoughts to muse, it's these: Have you really taken the time to look at who your current customer is? Have you taken the time to assess what your current customer profile's needs are? Does this customer have different needs that you can serve by changing your products or services with a tweak here or a tweak there or perhaps even full-scale changes that will affect your infrastructure but offer strategic insurance for your business?
Total January 2009 layoffs 151,352
This is a list of the total announced layoffs at America's 500 largest public companies as measured by a composite ranking of sales, profits, assets and market value during January 2009.
Cigna: reduces workforce by 4% (1,100 jobs).
United States Steel: cuts 50 jobs as it closes production lines in Texas.
Alcoa: starts global salary and hiring freeze, plans sale of four non-core businesses and cuts workforce by 13% (13,500 jobs).
Aqua Glass (Masco): pink-slips 30 employees.
EMC: fires 2,400 as it reduces 2009 expenses by $350 million.
Union Pacific: pink-slips 230 as company struggles; stock down 22% year-to-date.
Bath Iron Works (General Dynamics): dismisses 179 employees.
Eaton: 78 laid off in Iowa.
Walgreen: cuts 1,000 (roughly 9%) from corporate and field manager ranks.
Oracle: cuts 500 from U.S. sales and consulting businesses.
Boeing: cuts 4,500 and returns workforce size to what it was in early 2008.
Freeport-McMoRan: cuts workforce in half at Arizona mine; 1,550 workers let go.
Smitfield Foods (Butterball): Fires 75 at Missouri plant.
Mosaic: 1,000 employees in Saskatchewan.
Aircraft maker and Textron (Cessna): 2,000 employees fired.
Best Buy: 12.5% of its headquarters staff with 500-employee layoff.
Precision Castparts: dismisses 40 as airline industry continues to struggle.
Cummins: freezes salaries for the rest of the year and lets 800 go.
Pfizer: cuts 800 researchers as it lowers cost in the face of poor performance and coming patent losses.
Ecolab: restructures and reduces workforce by 4% (1,000 jobs).
Delta Air Lines: gives 2,000 early retirements as part of 8% capacity reduction.
Motorola: lays off 4,000 following a 3,000-worker layoff last year; savings of $700 million a year.
Google: fires 100 hirers cutting back on contract workers and temporary employees.
Xerox: cuts 275 jobs in New York region.
MeadWestvaco: fires 2,000 and plans closings or restructurings at up to 14 plants.
Autodesk: expects loss from 2008 fourth quarter; pink-slips 750 (10% of workforce).
Marshall & Ilsley: cuts 8% of staff (830) in ongoing cost-cutting.
General Electric: jet-engine group cuts 1,000 white-collar jobs.
ConocoPhillips: trims capital spending by 18%, writes off $34 billion and reduces workforce by 4% (1,300 jobs).
Hertz Global Holdings: sets out for worldwide restructuring in first quarter of 2009; cuts 4,000 jobs.
WellPoint: reduces workforce by 600 and removes 900 open positions.
Advanced Micro Devices: reduces global workforce by 9% (1,100 jobs).
Clear Channel Communications: reduces workforce by 9% accounting for 1,850 job losses.
Deere & Company: dismisses 120 at Iowa plant.
Burlington Santa Fe: cuts 2,500 workers (5% of workforce).
UAL: fires 1,000 to cut overhead costs.
SPX: attempts to sell a business unit and cuts 400 employees to help endure the downturn.
Intel: closes five manufacturing plants and pink slips 5,000.
Walt Disney: offers voluntary buyouts to 600 theme park executives on poor attendance.
Wynn Resorts: wraps up construction on Las Vegas Strip casino with 53-worker layoff in design and construction affiliate.
Eaton: total workforce reduction since the beginning of last year to 10% with 5,200-worker cut.
Warner Bros. Entertainment (Time Warner): cuts 10% (800) of its jobs.
Microsoft: has first mass layoff in 34-year history; pink slips 5,000.
Huntsman: reduces workforce by 9%; cutting 1,175 regular workers and 490 full-time contractors.
Deere & Company: subsidiary lays off 502 employees.
Abercrombie & Fitch: cuts 50 from headquarters as company leans expenses.
Harley-Davidson: sees 60% drop in profits in fourth quarter of 2008; fires 1,100 (10% of workforce).
Lincoln National: posts five quarterly declines in profit; cuts 540 (5% of workforce).
Caterpillar: announces quarterly profit plunge of 32%; fires 20,000.
Pfizer: closes five factories and cuts 15% of total workforce (19,000 workers).
Sprint Nextel: pink-slips 8,000 workers--recording more than $300 million in severance charges but saving $1.2 billion a year in labor costs.
Home Depot: closes high-end home design shops and slims ranks at headquarters; dismisses 7,000.
General Motors: cuts production at several plants and fires 2,000 in Michigan and Ohio.
Texas Instruments: pink-slips 3,400 (12% of workforce).
IBM: selects 2,800 to participate in its “current resource reduction action.”
AOL (Time Warner): reduces workforce by 10% (700 workers) as it fights declining ad revenue.
Merillat (Masco): cuts 20% of workforce (70 workers).
Starbucks: organizes closings at 900 stores worldwide and fires 6,700 in the process.
Target: cuts 400 open positions and 600 employees on sagging sales. Source: Recession.org