My last post was about the ethical and moral obligations of retailers during natural disasters. My view is that it is wrong to take advantage of the unfortunate situation of others to raise prices or gouge. We have a responsibility to our customers to treat them fairly and with respect.
This doesn’t mean that difficult times are not good business opportunities, however. In fact, a good retailer should do whatever they can to become the first point of contact for their customers. This means anticipating events and needs. Doing so creates a stronger bond with the customer, an opportunity for sales and profits, and the chance to become top of mind for the customer when they need things – whether it is an emergency or not.
A store that does well during difficult times does so not because of luck but because of thinking ahead and being prepared. Most people, including retailers, don’t do anything until the last minute and then it is usually too late. To borrow the Boy Scout motto: “Be prepared”.
Is there a winter storm coming? Stock up on ice scrapers, salt, bottle water, and batteries. Hurricane around the corner? Canned foods, bottle water, and batteries. Summer brown outs expected? Flashlights, bottle water, and batteries. (It seems like you should always have a healthy supply of bottle water and batteries for every occasion.) Use your imagination- what are the items that you and your family want during difficult times? What would you want to have available at your local store if something happened? If you would want it, it is probably pretty certain that others would want it as well.
You probably already do something similar with planned events by stocking more drinks and chips before the Super Bowl, having sun tan lotion and drink coolers for the summer, and umbrellas for when it rains. Your customers want these items and, in most cases, expect you to have them.
But having the products in the right place at the right time also means having them at the right price. Just as you competitively price your products for planned events such as the Super Bowl you should do the same for unexpected events. A normal every day price should include a reasonable profit margin and you should sell your products during an emergency situation for every day prices.
Take a look around the corner. What is coming next? Decide what you need to have on hand, get it in the store, and put a fair price on it with a normal markup. Better yet – if things get really bad, give away your products for free to those who need them most. Play the retail game with a long term strategy. What you give up in extra margin from not raising prices during an emergency you more than make back from loyal customers who will not only be foul weather friends but fair weather ones as well.