The data makes a pretty grim reading. According to the Australian Bureau of Statistics, unemployment in Australia stands at 7.5%, its highest since November 1998. In April alone, almost 600,000 Australians lost their jobs.
Such figures are a cruel but inevitable result of the Covid-19 pandemic, but what if I told you your business could emerge from the downturn stronger than ever?
I understand the current economic climate and its numerous challenges because I have been through a comparable situation. I know it is particularly tough in the retail industry, with many retailers posting disappointing results and looking desperately for ways to improve. But I truly believe hard times such as these can be an opportunity: an opportunity to strengthen customer loyalty, an opportunity to improve productivity and an opportunity to bolster the market position.
How? With economic downturn comes opportunity.
I would love to share a personal experience, as well as some of the valuable lessons I learned about growth during a downturn.
In my role as State Leader at Flight Centre, the largest retailer of travel in Australia. I had just come off two outstanding years of strong profit growth, and then… the Global Financial Crisis (GFC) hit. This, of course, had a huge impact on leisure travel, just as the Covid-19 pandemic is having right now.
The year of the GFC saw profit fall by 10% on the previous year. Yet my approach during the crisis was a little different from the industry norm. I knew things would improve, and I wanted to be ready to capitalise when they did. I saw this time as a huge opportunity to increase my staff numbers and make sure everyone was well trained and motivated.
While the rest of the industry reduced their marketing spend, closing stores and not replacing staff, I did the opposite.
- I invested in my people and, in particular, leadership development.
- Increased my marketing spend.
- Opened more stores, negotiating some great leases in the process.
I am convinced this investment paid off in spades. The fact that the year after the GFC saw results grow by 48% offers pretty strong proof. There are differences between the GFC and the current recession, to be sure. The travel industry, in particular, is tackling unprecedented challenges. Yet, regardless of your specific circumstances, there is an opportunity to narrow your focus and lay a solid foundation in readiness for the upturn.
In difficult times, we can focus on shrinking our business and reducing costs or we can see this climate as an opportunity to take stock and reset.
During a downturn, the greatest investment you can make is in your people. Take the time to encourage them, inspire them and challenge them. Your competitors will be doing the opposite.
Want to revitalise your retail operation? Learn about my results-driven program here.